 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER IV--STUDENT ASSISTANCE
 
                      Part D--Federal Perkins Loans
 
Sec. 1087cc. Agreements with institutions of higher education


(a) Contents of agreements

    An agreement with any institution of higher education for the 
payment of Federal capital contributions under this part shall--
        (1) provide for the establishment and maintenance of a student 
    loan fund for the purpose of this part;
        (2) provide for the deposit in such fund of--
            (A) Federal capital contributions from funds appropriated 
        under section 1087aa of this title;
            (B) a capital contribution by an institution in an amount 
        equal to one-third of the Federal capital contributions 
        described in subparagraph (A);
            (C) collections of principal and interest on student loans 
        made from deposited funds;
            (D) charges collected pursuant to regulations under section 
        1087dd(c)(1)(H) of this title; and
            (E) any other earnings of the funds;

        (3) provide that such student loan fund shall be used only for--
            (A) loans to students, in accordance with the provisions of 
        this part;
            (B) administrative expenses, as provided in subsection (b) 
        of this section;
            (C) capital distributions, as provided in section 1087ff of 
        this title; and
            (D) costs of litigation, and other collection costs agreed 
        to by the Secretary in connection with the collection of a loan 
        from the fund (and interest thereon) or a charge assessed 
        pursuant to regulations under section 1087dd(c)(1)(H) of this 
        title;

        (4) provide that where a note or written agreement evidencing a 
    loan has been in default despite due diligence on the part of the 
    institution in attempting collection thereon--
            (A) if the institution has knowingly failed to maintain an 
        acceptable collection record with respect to such loan, as 
        determined by the Secretary in accordance with criteria 
        established by regulation, the Secretary may--
                (i) require the institution to assign such note or 
            agreement to the Secretary, without recompense; and
                (ii) apportion any sums collected on such a loan, less 
            an amount not to exceed 30 percent of any sums collected to 
            cover the Secretary's collection costs, among other 
            institutions in accordance with section 1087bb of this 
            title; or

            (B) if the institution is not one described in subparagraph 
        (A), the Secretary may--
                (i) allow such institution to transfer its interest in 
            such loan to the Secretary, for collection, and the 
            Secretary may use any collections thereon (less an amount 
            not to exceed 30 percent of any such sums collected to cover 
            the Secretary's collection costs) to make allocations to 
            institutions of additional capital contributions in 
            accordance with section 1087bb of this title; or
                (ii) allow such institution to refer such note or 
            agreement to the Secretary, without recompense, except that 
            any sums collected on such a loan (less an amount not to 
            exceed 30 percent of any such sums collected to cover the 
            Secretary's collection costs) shall be repaid to such 
            institution no later than 180 days after collection by the 
            Secretary and treated as an additional capital contribution;

        (5) provide that, if an institution of higher education 
    determines not to service and collect student loans made available 
    from funds under this part, the institution will assign, at the 
    beginning of the repayment period, notes or evidence of obligations 
    of student loans made from such funds to the Secretary and the 
    Secretary shall apportion any sums collected on such notes or 
    obligations (less an amount not to exceed 30 percent of any such 
    sums collected to cover that Secretary's collection costs) among 
    other institutions in accordance with section 1087bb of this title;
        (6) provide that, notwithstanding any other provision of law, 
    the Secretary will provide to the institution any information with 
    respect to the names and addresses of borrowers or other relevant 
    information which is available to the Secretary, from whatever 
    source such information may be derived;
        (7) provide assurances that the institution will comply with the 
    provisions of section 1087cc-1 of this title;
        (8) provide that the institution of higher education will make 
    loans first to students with exceptional need; and
        (9) include such other reasonable provisions as may be necessary 
    to protect the United States from unreasonable risk of loss and as 
    are agreed to by the Secretary and the institution.

(b) Administrative expenses

    An institution which has entered into an agreement under subsection 
(a) of this section shall be entitled, for each fiscal year during which 
it makes student loans from a student loan fund established under such 
agreement, to a payment in lieu of reimbursement for its expenses in 
administering its student loan program under this part during such year. 
Such payment shall be made in accordance with section 1096 of this 
title.

(c) Cooperative agreements with credit bureau organizations

    (1) For the purpose of promoting responsible repayment of loans made 
pursuant to this part, the Secretary and each institution of higher 
education participating in the program under this part shall enter into 
cooperative agreements with credit bureau organizations to provide for 
the exchange of information concerning student borrowers concerning whom 
the Secretary has received a referral pursuant to section 1087gg of this 
title and regarding loans held by the Secretary or an institution.
    (2) Each cooperative agreement made pursuant to paragraph (1) shall 
be made in accordance with the requirements of section 1080a of this 
title except that such agreement shall provide for the disclosure by the 
Secretary or an institution, as the case may be, to such organizations, 
with respect to any loan held by the Secretary or the institution, 
respectively, of--
        (A) the date of disbursement and the amount of such loans made 
    to any borrower under this part at the time of disbursement of the 
    loan;
        (B) information concerning the repayment and collection of any 
    such loan, including information concerning the status of such loan; 
    and
        (C) the date of cancellation of the note upon completion of 
    repayment by the borrower of any such loan, or upon cancellation or 
    discharge of the borrower's obligation on the loan for any reason.

    (3) Notwithstanding paragraphs (4) and (6) \1\ of subsection (a) of 
section 1681c of title 15, a consumer reporting agency may make a report 
containing information received from the Secretary or an institution 
regarding the status of a borrower's account on a loan made under this 
part until the loan is paid in full.
---------------------------------------------------------------------------
    \1\ See References in Text note below.
---------------------------------------------------------------------------
    (4)(A) Except as provided in subparagraph (B), an institution of 
higher education, after consultation with the Secretary and pursuant to 
the agreements entered into under paragraph (1), shall disclose at least 
annually to any credit bureau organization with which the Secretary has 
such an agreement the information set forth in paragraph (2), and shall 
disclose promptly to such credit bureau organization any changes to the 
information previously disclosed.
    (B) The Secretary may promulgate regulations establishing criteria 
under which an institution of higher education may cease reporting the 
information described in paragraph (2) before a loan is paid in full.
    (5) Each institution of higher education shall notify the 
appropriate credit bureau organizations whenever a borrower of a loan 
that is made and held by the institution and that is in default makes 6 
consecutive monthly payments on such loan, for the purpose of 
encouraging such organizations to update the status of information 
maintained with respect to that borrower.

(d) Limitation on use of interest bearing accounts

    In carrying out the provisions of subsection (a)(9) of this section, 
the Secretary may not require that any collection agency, collection 
attorney, or loan servicer collecting loans made under this part deposit 
amounts collected on such loans in interest bearing accounts, unless 
such agency, attorney, or servicer holds such amounts for more than 45 
days.

(e) Special due diligence rule

    In carrying out the provisions of subsection (a)(5) \1\ of this 
section relating to due diligence, the Secretary shall make every effort 
to ensure that institutions of higher education may use Internal Revenue 
Service skip-tracing collection procedures on loans made under this 
part.

(Pub. L. 89-329, title IV, Sec. 463, as added Pub. L. 99-498, title IV, 
Sec. 405(a), Oct. 17, 1986, 100 Stat. 1444; amended Pub. L. 100-50, 
Sec. 13(e), (f), June 3, 1987, 101 Stat. 349; Pub. L. 102-325, title IV, 
Sec. 463(a), (b), July 23, 1992, 106 Stat. 579; Pub. L. 103-208, 
Sec. 2(f)(5)-(7), Dec. 20, 1993, 107 Stat. 2471; Pub. L. 105-244, title 
IV, Sec. 463, Oct. 7, 1998, 112 Stat. 1724.)

                       References in Text

    Paragraph (6) of subsection (a) of section 1681c of title 15, 
referred to in subsec. (c)(3), was redesignated paragraph (5) of 
subsection (a) of section 1681c of title 15 by Pub. L. 105-347, 
Sec. 5(4), Nov. 2, 1998, 112 Stat. 3211.
    Subsection (a)(5) of this section relating to due diligence, 
referred to in subsec. (e), was redesignated subsec. (a)(4), by Pub. L. 
105-244, title IV, Sec. 463(a)(3), Oct. 7, 1998, 112 Stat. 1724.


                            Prior Provisions

    A prior section 1087cc, Pub. L. 89-329, title IV, Sec. 463, as added 
Pub. L. 92-318, title I, Sec. 137(b), June 23, 1972, 86 Stat. 274; 
amended Pub. L. 94-482, title I, Sec. 130(c), Oct. 12, 1976, 90 Stat. 
2146; Pub. L. 96-374, title IV, Secs. 442(b)(1)-(4), 445(a), (b)(1), 
447(a), 448(b), title XIII, Sec. 1391(a)(1), Oct. 3, 1980, 94 Stat. 
1439, 1440, 1442, 1443, 1503; Pub. L. 99-272, title XVI, Secs. 16025, 
16026, Apr. 7, 1986, 100 Stat. 352, 353, related to agreements with 
institutions of higher education, prior to the general revision of this 
part by Pub. L. 99-498.


                               Amendments

    1998--Subsec. (a)(2)(B). Pub. L. 105-244, Sec. 463(a)(1), amended 
subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: 
``a capital contribution--
        ``(i) by an institution that--
            ``(I) is granted permission by the Secretary to participate 
        in an Expanded Lending Option under the program, and
            ``(II) has a default rate which does not exceed 7.5 percent 
        for award year 1993-1994 and has a cohort default rate which 
        does not exceed 15 percent for award year 1994-1995 or for any 
        succeeding award year,
    in an amount not less than the amount of the Federal capital 
    contributions described in subparagraph (A); or
        ``(ii) by any other institution, in an amount not less than 
    three-seventeenths of such Federal capital contribution in fiscal 
    year 1993, and one-third of such Federal capital contribution in 
    each of the succeeding fiscal years, of the amount of the Federal 
    capital contributions described in subparagraph (A);''.
    Subsec. (a)(4) to (10). Pub. L. 105-244, Sec. 463(a)(2), (3), 
redesignated pars. (5) to (10) as (4) to (9), respectively, and struck 
out former par. (4) which read as follows: ``provide that where a note 
or written agreement evidencing a note has been in default for (A) 120 
days, in the case of a loan which is repayable in monthly installments, 
or (B) 180 days, in the case of a loan which is repayable in less 
frequent installments, notice of such default shall be given to the 
Secretary in an annual report describing the total number of loans from 
such fund which are in such default;''.
    Subsec. (c)(1). Pub. L. 105-244, Sec. 463(b)(1), substituted ``the 
Secretary and each institution of higher education participating in the 
program under this part shall'' for ``the Secretary shall'' and inserted 
``and regarding loans held by the Secretary or an institution'' after 
``section 1087gg of this title''.
    Subsec. (c)(2). Pub. L. 105-244, Sec. 463(b)(2)(A), in introductory 
provisions, substituted ``by the Secretary or an institution, as the 
case may be, to such organizations, with respect to any loan held by the 
Secretary or the institution, respectively, of--'' for ``by the 
Secretary to such organizations, with respect to any loan for which the 
Secretary is responsible, of--''.
    Subsec. (c)(2)(A). Pub. L. 105-244, Sec. 463(b)(2)(B), amended 
subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: 
``the date of disbursement and the amount of any such loan;''.
    Subsec. (c)(2)(B). Pub. L. 105-244, Sec. 463(b)(2)(C), inserted 
``the repayment and'' after ``concerning'' and substituted ``status of 
such'' for ``status of any defaulted''.
    Subsec. (c)(2)(C). Pub. L. 105-244, Sec. 463(b)(2)(D), inserted ``, 
or upon cancellation or discharge of the borrower's obligation on the 
loan for any reason'' before period at end.
    Subsec. (c)(3). Pub. L. 105-244, Sec. 463(b)(3)(A), in introductory 
provisions, inserted ``or an institution'' after ``from the Secretary'' 
and substituted ``until the loan is paid in full.'' for ``until--''.
    Subsec. (c)(3)(A), (B). Pub. L. 105-244, Sec. 463(b)(3)(B), struck 
out subpars. (A) and (B) which read as follows:
    ``(A) 7 years from the date on which the Secretary accepted an 
assignment or referral of a loan, or
    ``(B) 7 years from the date the Secretary first reports the account 
to a consumer reporting agency.''
    Subsec. (c)(4). Pub. L. 105-244, Sec. 463(b)(4), amended par. (4) 
generally. Prior to amendment, par. (4) read as follows: ``Each 
institution of higher education, after consultation with the Secretary 
and pursuant to the agreements entered into under paragraph (1), shall 
disclose at least annually to any credit bureau organization with which 
the Secretary has such an agreement--
        ``(A) the amount of loans made to any borrower under this part 
    at the time of the disbursement of the loan; and
        ``(B) the information set forth in section 1080a(a) of this 
    title.''
    Subsec. (c)(5). Pub. L. 105-244, Sec. 463(b)(4), added par. (5).
    Subsec. (d). Pub. L. 105-244, Sec. 463(c), substituted ``subsection 
(a)(9)'' for ``subsection (a)(10)''.
    1993--Subsec. (a)(2)(B)(i)(II). Pub. L. 103-208, Sec. 2(f)(5), 
substituted ``7.5 percent for award year 1993-1994 and has a cohort 
default rate which does not exceed 15 percent for award year 1994-1995 
or for any succeeding award year'' for ``7.5 percent''.
    Subsec. (c)(4). Pub. L. 103-208, Sec. 2(f)(6), substituted ``shall 
disclose at least annually'' for ``shall disclose'' in introductory 
provisions.
    Subsecs. (d), (e). Pub. L. 103-208, Sec. 2(f)(7), added subsecs. (d) 
and (e).
    1992--Subsec. (a)(2)(B). Pub. L. 102-325, Sec. 463(a), amended 
subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: 
``a capital contribution by such institution in an amount equal to not 
less than one-ninth of the amount of the Federal capital contributions 
described in subparagraph (A);''.
    Subsec. (c)(3)(B). Pub. L. 102-325, Sec. 463(b)(1), struck out ``, 
if that account has not been previously reported by any other holder of 
the note'' after ``agency''.
    Subsec. (c)(4). Pub. L. 102-325, Sec. 463(b)(2), added par. (4).
    1987--Subsec. (a)(4). Pub. L. 100-50, Sec. 13(e), substituted ``in 
an annual report'' for ``in a report'' and struck out ``, and made to 
the Secretary at least semiannually'' after ``in such default''.
    Subsec. (b). Pub. L. 100-50, Sec. 13(f), substituted ``section 1096 
of this title'' for ``section 1092 of this title''.


                    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 Pub. L. 103-208 effective as if included in the Higher 
Education Amendments of 1992, Pub. L. 102-325, except as otherwise 
provided, see section 5(a) of Pub. L. 103-208, set out as a note under 
section 1051 of this title.


                    Effective Date of 1992 Amendment

    Amendment by Pub. L. 102-325 effective July 23, 1992, except that 
changes made in subsec. (a)(2)(B), relating to the matching of Federal 
capital contributions, applicable to funds provided for such program for 
award years beginning on or after July 1, 1993, see section 468 of Pub. 
L. 102-325, set out as a note under section 1087dd 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, except as otherwise provided, see 
section 2 of Pub. L. 99-498, set out as a note under section 1001 of 
this title.
    Subsection (a)(9) of this section applicable only to loans made for 
periods of enrollment beginning on or after July 1, 1987, see section 
405(b) of Pub. L. 99-498, set out as a note under section 1087dd of this 
title.

                  Section Referred to in Other Sections

    This section is referred to in sections 1087aa, 1087cc-1, 1087dd, 
1087gg, 1091a, 1096 of this title.
