Student Loan Consolidation and Technical Amendments Act of 1983

Summary

Student Loan Consolidation and Technical Amendments of 1983 - Amends part B (Federal, State, and Private Programs of Low-Interest Insured Loans to Students in Institutions of Higher Education) of title IV (Student Assistance) of the Higher Education Act of 1965 (HEA) to add new provisions for student loan consolidation. Directs the Secretary of Education to enter into agreements with eligible lenders to provide consolidation loans to eligible borrowers. Provides for such consolidation of student loans made, insured, or guaranteed under part B or under part E (Direct Loans to Students in Institutions of Higher Education). Defines the following as eligible lenders for purposes of such consolidation loan agreements: (1) the Student Loan Marketing Association (Sallie Mae); (2) State and nonprofit institutions and organizations with which the Secretary has agreements under specified student loan provisions of such Act; and (3) other eligible lenders described in specified provisions of such Act. Defines eligible borrowers as those who: (1) either owe $5,000 to two or more lenders or programs under title IV or owe $7,500 to a single lender under part B; and (2) are not delinquent with respect to any required payment on such indebtedness by more than 60 days. Sets forth requirements for such consolidation loan agreements. Prohibits the making, of any such consolidation loan from the proceeds of any tax-exempt bond or other obligation. Authorizes the Secretary to issue certificates of comprehensive insurance coverage to lenders which have entered into such consolidation loan agreements. Sets forth required provisions for such certificates. Provides that such consolidation loans shall be insurable by the Secretary only if the loan is made to an eligible borrower who has agreed to notify the holder of the loan promptly concerning any change of address and the loan is evidenced by a note or other written agreement which meets specified requirements. Sets the interest rate for such consolidation loans at nine percent per year (but at 12 percent in the case of consolidation of auxiliary loans made to an independent undergraduate or graduate student). Permits lending agencies to establish consolidated loan repayment terms, including graduated, income sensitive schedules, but limits repayment periods to required maximum periods depending on loan amount. Prohibits charging any origination fee or insurance premium to the borrower of such a consolidation loan. Provides that no insurance premium shall be payable by the lender to the Secretary for any such loan. Provides that no administrative cost allowance shall be payable by the Secretary for any such loan. Authorizes the Secretary, after a hearing and a determination of need, to enter into an agreement with specified eligible lenders from that State or another State to consolidate loans in any State where specified eligible lenders from that State have not entered into such an agreement. Provides that authority to make such consolidation loans shall expire at the close of FY 1986. Extends Sallie Mae's current authority to make consolidated student loans until six months after the date of enactment of this Act. Makes technical and conforming amendments. Directs the National Institute of Education to: (1) evaluate the cost, efficiency, and impact of the consolidation loan program established by this Act; and (2) report to the Congress by June 30, 1986, on its findings and recommendations. Revises provisions relating to the information required to be disclosed to student borrowers by eligible lenders under part B (guaranteed student loan program) and by eligible institutions under part E (direct student loan program). Provides that the failure to provide such information shall not: (1) relieve a borrower of the obligation to repay a loan; (2) provide a basis for a claim of civil damages; or (3) abrogate specified obligations of the Secretary or of a State or nonprofit private agency. Authorizes the Secretary to limit, suspend, or terminate the continued participation of an eligible lender in making loans under part B for failure by that lender to comply with such information disclosure requirements. Amends the Student Financial Assistance Technical Amendments of 1982 to revise provisions relating to the family contribution schedules for the Pell Grant and guaranteed student loan programs. Extends through academic year 1985-86 the 1982-83 cost of attendance criteria used for calculating eligibility for and the amount of Pell Grants. (Current law requires the use of the 1982-83 criteria through academic years 1983-84 and 1984-85). Permits, within specified limits, increased cost of attendance ("commuter") allowances for students not residing at home or in institutionally owned or operated housing for academic years 1984-85, for purposes of calculating eligibility for and the amount of Pell Grants. Continues through academic year 1985-86 the separation of the system of need analysis for the Pell Grant family contribution schedule from that for specified campus-based student assistance programs. Maintains the 1982-83 Pell Grant family contribution schedule (which current law requires to be used for the 1983-84 academic year) for academic years 1984-85 and 1985-86, with appropriate updating for family size offsets. Sets deadlines for the publication of such schedules. Requires that the criteria for determination of independent student status used for academic year 1982-83 be used for academic years 1983-84, 1984-85, and 1985-86. Maintains the 1982-83 guaranteed student loan program family contribution schedule (which current law requires to be used for academic year 1983-84) for academic years 1984-85 and 1985-86, with appropriate updating. Sets deadlines for the publication of such schedules. Revises HEA part B provisions relating to applicable interest rates on guaranteed student loans to eliminate provisions which provide for eight percent interest under specified conditions. Prohibits any part B lender from discriminating against any borrower or applicant for credit or insurance on the basis of race, national origin, religion, sex or marital status, age, or handicapped status. Revises part B provisions for special allowances to require State guarantee authorities, in order to be eligible for such allowances, to submit to the Secretary an operational plan containing specified restrictions. Repeals specified provisions of the Education Amendments of 1980 relating restrictions on special allowances. Extends through FY 1986 the waiver of Federal priority over the indebtedness of Sallie Mae. Makes specified provisions of the Education Amendments of 1980 providing for administrative cost allowances for lenders effective retroactively as if enacted as part of specified provisions of the Education Amendments of 1976.

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Documents

5 official files

• Public Law (PDF)

  Public Law · EN · 16 August 1983

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• Passed Senate amended

  summary · EN · 2 August 1983

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• Passed House amended

  summary · EN · 1 August 1983

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• Reported to House with amendment(s)

  summary · EN · 27 July 1983

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• Introduced in House

  summary · EN · 22 June 1983

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