 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER IV--STUDENT ASSISTANCE
 
           Part C--William D. Ford Federal Direct Loan Program
 
Sec. 1087b. Funds for origination of direct student loans


(a) In general

    The Secretary shall provide, on the basis of the need and the 
eligibility of students at each participating institution, and parents 
of such students, for such loans, funds for student and parent loans 
under this part--
        (1) directly to an institution of higher education that has an 
    agreement with the Secretary under section 1087d(a) of this title to 
    participate in the direct student loan programs under this part and 
    that also has an agreement with the Secretary under section 1087d(b) 
    of this title to originate loans under this part; or
        (2) through an alternative originator designated by the 
    Secretary to students (and parents of students) attending 
    institutions of higher education that have an agreement with the 
    Secretary under section 1087d(a) of this title but that do not have 
    an agreement with the Secretary under section 1087d(b) of this 
    title.

(b) No entitlement to participate or originate

    No institution of higher education shall have a right to participate 
in the programs authorized by this part, to originate loans, or to 
perform any program function under this part. Nothing in this subsection 
shall be construed so as to limit the entitlement of an eligible student 
attending a participating institution (or the eligible parent of such 
student) to borrow under this part.

(c) Delivery of loan funds

    Loan funds shall be paid and delivered to an institution by the 
Secretary prior to the beginning of the payment period established by 
the Secretary in a manner that is consistent with payment and delivery 
of Federal Pell Grants under subpart 1 of part A of this subchapter.

(Pub. L. 89-329, title IV, Sec. 452, as added Pub. L. 99-498, title IV, 
Sec. 404, Oct. 17, 1986, 100 Stat. 1437; amended Pub. L. 102-325, title 
IV, Sec. 451, July 23, 1992, 106 Stat. 569; Pub. L. 103-66, title IV, 
Sec. 4021, Aug. 10, 1993, 107 Stat. 341; Pub. L. 105-33, title VI, 
Sec. 6102, Aug. 5, 1997, 111 Stat. 652; Pub. L. 105-244, title IV, 
Sec. 401(g)(5), Oct. 7, 1998, 112 Stat. 1652.)


                            Prior Provisions

    A prior section 1087b, Pub. L. 89-329, title IV, Sec. 452, as added 
Pub. L. 90-575, title I, Sec. 141, Oct. 16, 1968, 82 Stat. 1031, 
authorized grants for programs of cooperative education, prior to repeal 
by Pub. L. 94-482, title I, Sec. 129(a), Oct. 12, 1976, 90 Stat. 2144, 
eff. 30 days after Oct. 12, 1976.


                               Amendments

    1998--Subsec. (c). Pub. L. 105-244 substituted ``Federal Pell 
Grants'' for ``basic grants''.
    1997--Subsecs. (b) to (d). Pub. L. 105-33 redesignated subsecs. (c) 
and (d) as (b) and (c), respectively, and struck out former subsec. (b) 
which required the Secretary to pay fees to institutions of higher 
education and alternative loan originators to assist in meeting the cost 
of loan origination.
    1993--Pub. L. 103-66 amended section generally, substituting 
provisions relating to funds for origination of direct student loans for 
former provisions relating to payment rules.
    1992--Pub. L. 102-325 amended section generally, substituting 
provisions relating to payment rules for former provisions authorizing 
demonstration projects.


                    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 1992 Amendment

    Amendment by Pub. L. 102-325 effective Oct. 1, 1992, see section 2 
of Pub. L. 102-325, set out as a note under section 1001 of this title.
