 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER IV--STUDENT ASSISTANCE
 
                      Part D--Federal Perkins Loans
 
Sec. 1087cc-1. Student loan information by eligible institutions


(a) Disclosure required prior to disbursement

    Each institution of higher education, in order to carry out the 
provisions of section 1087cc(a)(8) \1\ of this title, shall, at or prior 
to the time such institution makes a loan to a student borrower which is 
made under this part, provide thorough and adequate loan information on 
such loan to the student borrower. Any disclosure required by this 
subsection may be made by an institution of higher education 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 disclosures shall include--
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    \1\ See References in Text note below.
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        (1) the name of the institution of higher education, and the 
    address to which communications and payments should be sent;
        (2) the principal amount of the loan;
        (3) the amount of any charges collected by the institution 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;
        (4) the stated interest rate on the loan;
        (5) the yearly and cumulative maximum amounts that may be 
    borrowed;
        (6) 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;
        (7) a statement as to the minimum and maximum repayment term 
    which the institution may impose, and the minimum monthly payment 
    required by law and a description of any penalty imposed as a 
    consequence of default, such as liability for expenses reasonably 
    incurred in attempts by the Secretary or institutions to collect on 
    a loan;
        (8) 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;
        (9) an explanation of any special options the borrower may have 
    for loan consolidation or other refinancing of the loan;
        (10) 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 the Department of Defense educational loan repayment 
    program (10 U.S.C. 16302);
        (11) a definition of default and the consequences to the 
    borrower if the borrower defaults, together with a statement that 
    the disbursement of, and the default on, a loan under this part, 
    shall be reported to a credit bureau or credit reporting agency;
        (12) to the extent practicable, the effect of accepting the loan 
    on the eligibility of the borrower for other forms of student 
    assistance; and
        (13) an explanation of any cost the borrower may incur in the 
    making or collection of the loan.

(b) Disclosure required prior to repayment

    Each institution of higher education shall enter into an agreement 
with the Secretary under which the institution will, prior to the start 
of the repayment period of the student borrower on loans made under this 
part, disclose to the student borrower the information required under 
this subsection. Any disclosure required by this subsection may be made 
by an institution of higher education either in a promissory note 
evidencing the loan or loans or in a written statement provided to the 
borrower. The disclosures shall include--
        (1) the name of the institution of higher education, 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;
        (8) 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) Costs and effects of disclosures

    Such information shall be available without cost to the borrower. 
The failure of an eligible institution 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 to make payments with respect to such loan.

(Pub. L. 89-329, title IV, Sec. 463A, as added Pub. L. 99-498, title IV, 
Sec. 405(a), Oct. 17, 1986, 100 Stat. 1446; amended Pub. L. 100-50, 
Sec. 13(g), (h), June 3, 1987, 101 Stat. 349; Pub. L. 102-325, title IV, 
Sec. 463(c), July 23, 1992, 106 Stat. 579; Pub. L. 103-208, 
Sec. 2(f)(8), Dec. 20, 1993, 107 Stat. 2471; Pub. L. 104-106, div. A, 
title XV, Sec. 1501(e)(4), Feb. 10, 1996, 110 Stat. 501.)

                       References in Text

    Section 1087cc(a) of this title, referred to in subsec. (a), was 
amended by Pub. L. 105-244, title IV, Sec. 463(a)(3), Oct. 7, 1998, 112 
Stat. 1724, which redesignated pars. (8) and (9) as (7) and (8), 
respectively.


                            Prior Provisions

    A prior section 1087cc-1, Pub. L. 89-329, title IV, Sec. 463A, as 
added Pub. L. 96-374, title IV, Sec. 447(b), Oct. 3, 1980, 94 Stat. 
1443; amended Pub. L. 97-301, Sec. 13, Oct. 13, 1982, 96 Stat. 1405; 
Pub. L. 98-79, Sec. 3(b), Aug. 15, 1983, 97 Stat. 478; Pub. L. 99-272, 
title XVI, Sec. 16027, Apr. 7, 1986, 100 Stat. 353, related to student 
loan information to be provided by institutions, prior to the general 
revision of this part by Pub. L. 99-498.


                               Amendments

    1996--Subsec. (a)(10). Pub. L. 104-106 substituted ``(10 U.S.C. 
16302)'' for ``(10 U.S.C. 2172)''.
    1993--Subsecs. (d), (e). Pub. L. 103-208 struck out subsecs. (d) and 
(e), which read as follows:
    ``(d) Limitation on Use of Interest Bearing Accounts.--In carrying 
out the provisions of subsection (a)(10) 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) 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.''
    1992--Subsec. (a)(11). Pub. L. 102-325, Sec. 463(c)(1), substituted 
``together with a statement that the disbursement of, and the default 
on, a loan under this part, shall be'' for ``including a statement that 
the default may be''.
    Subsecs. (d), (e). Pub. L. 102-325, Sec. 463(c)(2), added subsecs. 
(d) and (e).
    1987--Subsec. (a)(8). Pub. L. 100-50, Sec. 13(g), added par. (8) and 
struck out former par. (8) which read as follows: ``a statement of the 
total cumulative balance owed by the student to that institution, the 
projected level of indebtedness of the student based on a 2- or 4-year 
college career, and an estimate of the projected monthly repayment given 
the level of indebtedness over a 2-, 4-, or 5-year college career;''.
    Subsec. (a)(10). Pub. L. 100-50, Sec. 13(h), substituted ``the 
Department of Defense educational loan repayment program (10 U.S.C. 
2172)'' for ``section 902 of the Department of Defense Authorization 
Act, 1981 (10 U.S.C. 2141, note)''.


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-106 effective as if included in the Reserve 
Officer Personnel Management Act, title XVI of Pub. L. 103-337, as 
enacted on Oct. 5, 1994, see section 1501(f)(3) of Pub. L. 104-106, set 
out as a note under section 113 of Title 10, Armed Forces.


                    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 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 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, as amended, set out as a note under section 1087dd of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 1087cc of this title.
