 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER IV--STUDENT ASSISTANCE
 
           Part C--William D. Ford Federal Direct Loan Program
 
Sec. 1087d. Agreements with institutions


(a) Participation agreements

    An agreement with any institution of higher education for 
participation in the direct student loan program under this part shall--
        (1) provide for the establishment and maintenance of a direct 
    student loan program at the institution under which the institution 
    will--
            (A) identify eligible students who seek student financial 
        assistance at such institution in accordance with section 1091 
        of this title;
            (B) estimate the need of each such student as required by 
        part E of this subchapter for an academic year, except that, any 
        loan obtained by a student under this part with the same terms 
        as loans made under section 1078-8 of this title (except as 
        otherwise provided in this part), or a loan obtained by a parent 
        under this part with the same terms as loans made under section 
        1078-2 of this title (except as otherwise provided in this 
        part), or obtained under any State-sponsored or private loan 
        program, may be used to offset the expected family contribution 
        of the student for that year;
            (C) provide a statement that certifies the eligibility of 
        any student to receive a loan under this part that is not in 
        excess of the annual or aggregate limit applicable to such loan, 
        except that the institution may, in exceptional circumstances 
        identified by the Secretary, refuse to certify a statement that 
        permits a student to receive a loan under this part, or certify 
        a loan amount that is less than the student's determination of 
        need (as determined under part E of this subchapter), if the 
        reason for such action is documented and provided in written 
        form to such student;
            (D) set forth a schedule for disbursement of the proceeds of 
        the loan in installments, consistent with the requirements of 
        section 1078-7 of this title; and
            (E) provide timely and accurate information--
                (i) concerning the status of student borrowers (and 
            students on whose behalf parents borrow under this part) 
            while such students are in attendance at the institution and 
            concerning any new information of which the institution 
            becomes aware for such students (or their parents) after 
            such borrowers leave the institution, to the Secretary for 
            the servicing and collecting of loans made under this part; 
            and
                (ii) if the institution does not have an agreement with 
            the Secretary under subsection (b) of this section, 
            concerning student eligibility and need, as determined under 
            subparagraphs (A) and (B), to the Secretary as needed for 
            the alternative origination of loans to eligible students 
            and parents in accordance with this part;

        (2) provide assurances that the institution will comply with 
    requirements established by the Secretary relating to student loan 
    information with respect to loans made under this part;
        (3) provide that the institution accepts responsibility and 
    financial liability stemming from its failure to perform its 
    functions pursuant to the agreement;
        (4) provide that students at the institution and their parents 
    (with respect to such students) will be eligible to participate in 
    the programs under part B of this subchapter at the discretion of 
    the Secretary for the period during which such institution 
    participates in the direct student loan program under this part, 
    except that a student or parent may not receive loans under both 
    this part and part B of this subchapter for the same period of 
    enrollment;
        (5) provide for the implementation of a quality assurance 
    system, as established by the Secretary and developed in 
    consultation with institutions of higher education, to ensure that 
    the institution is complying with program requirements and meeting 
    program objectives;
        (6) provide that the institution will not charge any fees of any 
    kind, however described, to student or parent borrowers for 
    origination activities or the provision of any information necessary 
    for a student or parent to receive a loan under this part, or any 
    benefits associated with such loan; and
        (7) include such other provisions as the Secretary determines 
    are necessary to protect the interests of the United States and to 
    promote the purposes of this part.

(b) Origination

    An agreement with any institution of higher education, or consortia 
thereof, for the origination of loans under this part shall--
        (1) supplement the agreement entered into in accordance with 
    subsection (a) of this section;
        (2) include provisions established by the Secretary that are 
    similar to the participation agreement provisions described in 
    paragraphs (1)(E)(ii), (2), (3), (4), (5), (6), and (7) of 
    subsection (a) of this section, as modified to relate to the 
    origination of loans by the institution or consortium;
        (3) provide that the institution or consortium will originate 
    loans to eligible students and parents in accordance with this part; 
    and
        (4) provide that the note or evidence of obligation on the loan 
    shall be the property of the Secretary.

(c) Withdrawal and termination procedures

    The Secretary shall establish procedures by which institutions or 
consortia may withdraw or be terminated from the program under this 
part.

(Pub. L. 89-329, title IV, Sec. 454, as added Pub. L. 99-498, title IV, 
Sec. 404, Oct. 17, 1986, 100 Stat. 1438; amended Pub. L. 100-50, 
Sec. 12, June 3, 1987, 101 Stat. 348; Pub. L. 102-325, title IV, 
Sec. 451, July 23, 1992, 106 Stat. 571; Pub. L. 103-66, title IV, 
Sec. 4021, Aug. 10, 1993, 107 Stat. 345.)


                               Amendments

    1993--Pub. L. 103-66 amended section generally, substituting 
provisions relating to agreements with institutions, consisting of 
subsecs. (a) to (c), for former provisions relating to requirements of 
agreements, consisting of pars. (1) to (7).
    1992--Pub. L. 102-325 amended section generally, substituting 
provisions relating to requirements of agreements for former provisions 
relating to terms of loans under pilot program.
    1987--Subsec. (a)(4). Pub. L. 100-50 amended par. (4) generally. 
Prior to amendment, par. (4) read as follows: ``The interest rate on all 
such loans shall be the rate equal to the rate obtained for each 
calendar year (A) by computing the average of the bond equivalent rates 
of 91-day Treasury bills auctioned for such 3-month period preceding 
such year, and (B) by adding 3 percent to the resulting percent.''


                    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.


                    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.

                  Section Referred to in Other Sections

    This section is referred to in sections 1087b, 1087c, 1087g of this 
title.
