 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER IV--STUDENT ASSISTANCE
 
              Part B--Federal Family Education Loan Program
 
Sec. 1083. Student loan information by eligible lenders


(a) Required disclosure before disbursement

    Each eligible lender, at or prior to the time such lender disburses 
a loan that is insured or guaranteed under this part (other than a loan 
made under section 1078-3 of this title), shall provide thorough and 
accurate loan information on such loan to the borrower in simple and 
understandable terms. Any disclosure required by this subsection may be 
made by an eligible lender by written or electronic means, including as 
part of the application material provided to the borrower, as part of 
the promissory note evidencing the loan, or on a separate written form 
provided to the borrower. Each lender shall provide to each borrower a 
telephone number, and may provide an electronic address, through which 
additional loan information can be obtained. The disclosure shall 
include--
        (1) a statement prominently and clearly displayed and in bold 
    print that the borrower is receiving a loan that must be repaid;
        (2) the name of the eligible lender, and the address to which 
    communications and payments should be sent;
        (3) the principal amount of the loan;
        (4) the amount of any charges, such as the origination fee and 
    insurance premium, collected by the lender at or prior to the 
    disbursal of the loan and whether such charges are deducted from the 
    proceeds of the loan or paid separately by the borrower;
        (5) the stated interest rate on the loan;
        (6) the yearly and cumulative maximum amounts that may be 
    borrowed;
        (7) an explanation of when repayment of the loan will be 
    required and when the borrower will be obligated to pay interest 
    that accrues on the loan;
        (8) a statement as to the minimum and maximum repayment term 
    which the lender may impose, and the minimum annual payment required 
    by law;
        (9) a statement of the total cumulative balance, including the 
    loan applied for, owed by the student to that lender, and an 
    estimate of the projected monthly payment, given such cumulative 
    balance;
        (10) an explanation of any special options the borrower may have 
    for loan consolidation or other refinancing of the loan;
        (11) a statement that the borrower has the right to prepay all 
    or part of the loan, at any time, without penalty, a statement 
    summarizing circumstances in which repayment of the loan or interest 
    that accrues on the loan may be deferred, and a brief notice of the 
    program for repayment of loans, on the basis of military service, 
    pursuant to section 902 of the Department of Defense Authorization 
    Act, 1981 (10 U.S.C. 2141, note); \1\
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        (12) a definition of default and the consequences to the 
    borrower if the borrower defaults, including a statement that the 
    default will be reported to a credit bureau or credit reporting 
    agency;
        (13) to the extent practicable, the effect of accepting the loan 
    on the eligibility of the borrower for other forms of student 
    assistance; and
        (14) an explanation of any cost the borrower may incur in the 
    making or collection of the loan.

(b) Required disclosure before repayment

    Each eligible lender shall, at or prior to the start of the 
repayment period of the student borrower on loans made, insured, or 
guaranteed under this part, disclose to the borrower by written or 
electronic means the information required under this subsection in 
simple and understandable terms. Each eligible lender shall provide to 
each borrower a telephone number, and may provide an electronic address, 
through which additional loan information can be obtained. For any loan 
made, insured, or guaranteed under this part, other than a loan made 
under section 1078-2 or 1078-3 of this title, such disclosure required 
by this subsection shall be made not less than 30 days nor more than 240 
days before the first payment on the loan is due from the borrower. The 
disclosure shall include--
        (1) the name of the eligible lender, and the address to which 
    communications and payments should be sent;
        (2) the scheduled date upon which the repayment period is to 
    begin;
        (3) the estimated balance owed by the borrower on the loan or 
    loans covered by the disclosure as of the scheduled date on which 
    the repayment period is to begin (including, if applicable, the 
    estimated amount of interest to be capitalized);
        (4) the stated interest rate on the loan or loans, or the 
    combined interest rate of loans with different stated interest 
    rates;
        (5) the nature of any fees which may accrue or be charged to the 
    borrower during the repayment period;
        (6) the repayment schedule for all loans covered by the 
    disclosure including the date the first installment is due, and the 
    number, amount, and frequency of required payments;
        (7) an explanation of any special options the borrower may have 
    for loan consolidation or other refinancing of the loan and of the 
    availability and terms of such other options, except that such 
    explanation is not required when the loan being made is a 
    consolidation loan under section 1078-3 of this title;
        (8) except as provided in subsection (e) of this section, the 
    projected total of interest charges which the borrower will pay on 
    the loan or loans, assuming that the borrower makes payments exactly 
    in accordance with the repayment schedule; and
        (9) a statement that the borrower has the right to prepay all or 
    part of the loan or loans covered by the disclosure at any time 
    without penalty.

(c) Cost of disclosure and consequences of nondisclosure

    Such information shall be available without cost to the borrower. 
The failure of an eligible lender to provide information as required by 
this section shall not (1) relieve a borrower of the obligation to repay 
a loan in accordance with its terms, (2) provide a basis for a claim for 
civil damages, or (3) be deemed to abrogate the obligation of the 
Secretary under a contract of insurance or reinsurance, or the 
obligation of a guaranty agency under a contract of guaranty. Nothing in 
this section shall be construed as subjecting the lender to the Truth in 
Lending Act [15 U.S.C. 1601 et seq.] with regard to loans made under 
this part. The Secretary may limit, suspend, or terminate the continued 
participation of an eligible lender in making loans under this part for 
failure by that lender to comply with this section.

(d) Separate statement

    Each eligible lender shall, at the time such lender notifies a 
borrower of approval of a loan which is insured or guaranteed under this 
part, provide the borrower with a separate paper which summarizes (in 
plain English) the rights and responsibilities of the borrower with 
respect to the loan, including a statement of the consequences of 
defaulting on the loan and a statement that each borrower who defaults 
will be reported to a credit bureau. The requirement of this subsection 
shall be in addition to the information required by subsection (a) of 
this section.

(e) Special disclosure rules on SLS loans and PLUS loans and 
        unsubsidized loans

    Loans made under sections 1078-1,\2\ 1078-2, and 1078-8 of this 
title shall not be subject to the disclosure of projected monthly 
payment amounts required under subsection (b)(8) of this section if the 
lender, in lieu of such disclosure, provides the borrower with sample 
projections of monthly repayment amounts assuming different levels of 
borrowing and interest accruals resulting from capitalization of 
interest while the borrower is in school. Such sample projections shall 
disclose the cost to the student of capitalizing--
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        (1) principal and interest; and
        (2) interest only.

(Pub. L. 89-329, title IV, Sec. 433, as added Pub. L. 99-498, title IV, 
Sec. 402(a), Oct. 17, 1986, 100 Stat. 1406; amended Pub. L. 100-50, 
Sec. 10(z), June 3, 1987, 101 Stat. 346; Pub. L. 102-325, title IV, 
Sec. 426, July 23, 1992, 106 Stat. 548; Pub. L. 103-208, Sec. 2(c)(53), 
(54), (k)(4), Dec. 20, 1993, 107 Stat. 2468, 2485; Pub. L. 105-244, 
title IV, Sec. 428, Oct. 7, 1998, 112 Stat. 1704.)

                       References in Text

    Section 902 of the Department of Defense Authorization Act, 1981, 
referred to in subsec. (a)(11), is section 902 of Pub. L. 96-342, title 
IX, Sept. 8, 1980, 94 Stat. 1115, as amended, which was set out as a 
note under section 2141 of Title 10, Armed Forces, and was repealed by 
Pub. L. 99-145, title VI, Sec. 671(a)(3), Nov. 8, 1985, 99 Stat. 663. 
See section 16302 of Title 10.
    Truth in Lending Act, referred to in subsec. (c), is title I of Pub. 
L. 90-321, May 29, 1968, 82 Stat. 146, as amended, which is classified 
generally to subchapter I (Sec. 1601 et seq.) of chapter 41 of Title 15, 
Commerce and Trade. For complete classification of this Act to the Code, 
see Short Title note set out under section 1601 of Title 15 and Tables.
    Section 1078-1 of this title, referred to in subsec. (e), was 
repealed by Pub. L. 103-66, title IV, Sec. 4047(b)-(d), Aug. 10, 1993, 
107 Stat. 364, eff. July 1, 1994, except with respect to loans provided 
under that section as it existed prior to Aug. 10, 1993. Subsequently, a 
new section 1078-1, relating to voluntary flexible agreements with 
guaranty agencies, was enacted by Pub. L. 105-244, title IV, Sec. 418, 
Oct. 7, 1998, 112 Stat. 1691.


                            Prior Provisions

    A prior section 1083, Pub. L. 89-329, title IV, Sec. 433, Nov. 8, 
1965, 79 Stat. 1247; Pub. L. 90-575, title I, Sec. 116(d), Oct. 16, 
1968, 82 Stat. 1024; Pub. L. 92-318, title I, Sec. 132(c), June 23, 
1972, 86 Stat. 261; Pub. L. 94-482, title I, Sec. 127(a), Oct. 12, 1976, 
90 Stat. 2129; Pub. L. 95-43, Sec. 1(a)(34), June 15, 1977, 91 Stat. 
216; Pub. L. 96-374, title XIII, Sec. 1391(a)(1), Oct. 3, 1980, 94 Stat. 
1503, related to requirements for institutional lenders, prior to the 
general revision of this part by Pub. L. 99-498.
    A prior section 1083a, Pub. L. 89-329, title IV, Sec. 433A, as added 
Pub. L. 96-374, title IV, Sec. 418, Oct. 3, 1980, 94 Stat. 1423; amended 
Pub. L. 97-301, Sec. 13(a), Oct. 13, 1982, 96 Stat. 1404; Pub. L. 98-79, 
Sec. 3(a), Aug. 15, 1983, 97 Stat. 476; Pub. L. 99-272, title XVI, 
Sec. 16012(c), Apr. 7, 1986, 100 Stat. 340, related to student loan 
information to be provided by eligible lenders, prior to the general 
revision of this part by Pub. L. 99-498. See section 1083 of this title.


                               Amendments

    1998--Subsec. (a). Pub. L. 105-244, Sec. 428(a), amended heading and 
introductory provisions generally. Prior to amendment, introductory 
provisions read as follows: ``Each eligible lender shall, at or prior to 
the time such lender disburses a loan which is insured or guaranteed 
under this part (other than a loan made under section 1078-3 of this 
title), provide thorough and accurate loan information on such loan to 
the borrower. Any disclosure required by this subsection may be made by 
an eligible lender as part of the written application material provided 
to the borrower, or as part of the promissory note evidencing the loan, 
or on a separate written form provided to the borrower. The disclosure 
shall include--''.
    Subsec. (b). Pub. L. 105-244, Sec. 428(b), amended heading and 
introductory provisions generally. Prior to amendment, introductory 
provisions read as follows: ``Each eligible lender shall, at or prior to 
the start of the repayment period of the student borrower on loans made, 
insured, or guaranteed under this part, disclose to the borrower the 
information required under this subsection. For any loan made, insured, 
or guaranteed under this part, other than a loan made under section 
1078-2 or 1078-3 of this title, such disclosure required by this 
subsection shall be made not less than 30 days nor more than 240 days 
before the first payment on the loan is due from the borrower. The 
disclosure shall 
include--''.
    1993--Subsec. (b). Pub. L. 103-208, Sec. 2(c)(53), substituted ``30 
days'' for ``60 days'' in introductory provisions.
    Subsec. (e). Pub. L. 103-208, Sec. 2(k)(4), amended directory 
language of Pub. L. 102-325, Sec. 426(c). See 1992 Amendment note below.
    Pub. L. 103-208, Sec. 2(c)(54), substituted ``sections'' for 
``section'' before ``1078-1''.
    1992--Subsec. (a). Pub. L. 102-325, Sec. 426(a), added par. (1) and 
redesignated former pars. (1) to (13) as (2) to (14), respectively.
    Subsec. (b). Pub. L. 102-325, Sec. 426(b)(1), in introductory 
provisions, inserted second sentence and struck out former second 
sentence which read as follows: ``Any disclosure required by this 
subsection may be made by an eligible lender either in a promissory note 
evidencing the loan or loans or in a written statement provided to the 
borrower.''
    Subsec. (b)(8). Pub. L. 102-325, Sec. 426(b)(2), inserted ``except 
as provided in subsection (e) of this section,'' before ``the 
projected''.
    Subsec. (e). Pub. L. 102-325, Sec. 426(c), as amended by Pub. L. 
103-208, Sec. 2(k)(4), added subsec. (e).
    1987--Subsec. (a). Pub. L. 100-50, Sec. 10(z)(1), inserted ``(other 
than a loan made under section 1078-3 of this title)'' after ``this 
part'' in first sentence.
    Subsec. (a)(8). Pub. L. 100-50, Sec. 10(z)(2), added par. (8) and 
struck out former par. (8) which read as follows: ``a statement of the 
total cumulative balance, including the loan applied for, owed by the 
student to that lender, the projected level of indebtedness of the 
student based on a 4-year college career, and an estimate of the 
projected monthly repayment given the level of indebtedness over a 4- or 
5-year college career;''.
    Subsec. (b)(7). Pub. L. 100-50, Sec. 10(z)(3), inserted ``, except 
that such explanation is not required when the loan being made is a 
consolidation loan under section 1078-3 of this title'' before semicolon 
at end.
    Subsec. (d). Pub. L. 100-50, Sec. 10(z)(4), substituted ``notifies a 
borrower of approval of a loan'' for ``makes the first disbursement of a 
loan with respect to a borrower''.


                    Effective Date of 1998 Amendment

    Amendment by Pub. L. 105-244 effective Oct. 1, 1998, except as 
otherwise provided in Pub. L. 105-244, see section 3 of Pub. L. 105-244, 
set out as a note under section 1001 of this title.


                    Effective Date of 1993 Amendment

    Amendment by section 2(c)(53) of Pub. L. 103-208 effective on and 
after 60 days after Dec. 20, 1993 and amendments by section 2(c)(54), 
(k)(4) of Pub. L. 103-208 effective, except as otherwise provided, as if 
included in the Higher Education Amendments of 1992, Pub. L. 102-325, 
see section 5(a), (b)(4) of Pub. L. 103-208, set out as a note under 
section 1051 of this title.


                    Effective Date of 1987 Amendment

    Amendment by Pub. L. 100-50 effective as if enacted as part of the 
Higher Education Amendments of 1986, Pub. L. 99-498, see section 27 of 
Pub. L. 100-50, set out as a note under section 1001 of this title.


                             Effective Date

    Section effective Oct. 17, 1986, with subsecs. (a), (b), and (d) of 
this section applicable only with respect to loans disbursed on or after 
Jan. 1, 1987, or made to cover the costs of instruction for periods of 
enrollment beginning on or after Jan. 1, 1987, see section 402(b) of 
Pub. L. 99-498, set out as a note under section 1071 of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 1077a of this title.
