 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER IV--STUDENT ASSISTANCE
 
           Part C--William D. Ford Federal Direct Loan Program
 
Sec. 1087h. Funds for administrative expenses


(a) Administrative expenses

                           (1) In general

        Each fiscal year there shall be available to the Secretary, from 
    funds not otherwise appropriated, funds to be obligated for--
            (A) administrative costs under this part and part B of this 
        subchapter, including the costs of the direct student loan 
        programs under this part; and
            (B) account maintenance fees payable to guaranty agencies 
        under part B of this subchapter and calculated in accordance 
        with subsections (b) and (c) of this section,

    not to exceed (from such funds not otherwise appropriated) 
    $617,000,000 in fiscal year 1999, $735,000,000 in fiscal year 2000, 
    $770,000,000 in fiscal year 2001, $780,000,000 in fiscal year 2002, 
    and $795,000,000 in fiscal year 2003.

                    (2) Account maintenance fees

        Account maintenance fees under paragraph (1)(B) shall be paid 
    quarterly and deposited in the Agency Operating Fund established 
    under section 1072b of this title.

                            (3) Carryover

        The Secretary may carry over funds made available under this 
    section to a subsequent fiscal year.

(b) Calculation basis

    Except as provided in subsection (c) of this section, account 
maintenance fees payable to guaranty agencies under paragraph (1)(B) 
shall be calculated--
        (1) for fiscal years 1999 and 2000, on the basis of 0.12 percent 
    of the original principal amount of outstanding loans on which 
    insurance was issued under part B of this subchapter; and
        (2) for fiscal years 2001, 2002, and 2003, on the basis of 0.10 
    percent of the original principal amount of outstanding loans on 
    which insurance was issued under part B of this subchapter.

(c) Special rules

                             (1) Fee cap

        The total amount of account maintenance fees payable under this 
    section--
            (A) for fiscal year 1999, shall not exceed $177,000,000;
            (B) for fiscal year 2000, shall not exceed $180,000,000;
            (C) for fiscal year 2001, shall not exceed $170,000,000;
            (D) for fiscal year 2002, shall not exceed $180,000,000; and
            (E) for fiscal year 2003, shall not exceed $195,000,000.

                      (2) Insufficient funding

        (A) In general

            If the amounts set forth in paragraph (1) are insufficient 
        to pay the account maintenance fees payable to guaranty agencies 
        pursuant to subsection (b) of this section for a fiscal year, 
        the Secretary shall pay the insufficiency by requiring guaranty 
        agencies to transfer funds from the Federal Student Loan Reserve 
        Funds under section 1072a of this title to the Agency Operating 
        Funds under section 1072b of this title.

        (B) Entitlement

            A guaranty agency shall be deemed to have a contractual 
        right against the United States to receive payments according to 
        the provisions of subparagraph (A).

(d) Budget justification

    No funds may be expended under this section unless the Secretary 
includes in the Department of Education's annual budget justification to 
Congress a detailed description of the specific activities for which the 
funds made available by this section have been used in the prior and 
current years (if applicable), the activities and costs planned for the 
budget year, and the projection of activities and costs for each 
remaining year for which administrative expenses under this section are 
made available.

(Pub. L. 89-329, title IV, Sec. 458, as added Pub. L. 102-325, title IV, 
Sec. 451, July 23, 1992, 106 Stat. 573; amended Pub. L. 103-66, title 
IV, Sec. 4021, Aug. 10, 1993, 107 Stat. 353; Pub. L. 104-19, title I, 
Sec. 601, July 27, 1995, 109 Stat. 219; Pub. L. 105-33, title VI, 
Sec. 6103, Aug. 5, 1997, 111 Stat. 652; Pub. L. 105-78, title VI, 
Sec. 609(l), Nov. 13, 1997, 111 Stat. 1524; Pub. L. 105-244, title IV, 
Sec. 454, Oct. 7, 1998, 112 Stat. 1717.)


                            Prior Provisions

    Prior sections 1087i and 1087j were omitted in the general revision 
of this part by Pub. L. 103-66.
    Section 1087i, Pub. L. 89-329, title IV, Sec. 459, as added Pub. L. 
102-325, title IV, Sec. 451, July 23, 1992, 106 Stat. 575, related to 
schedule of regulatory activities by Secretary under Federal direct loan 
demonstration program.
    Section 1087j, Pub. L. 89-329, title IV, Sec. 459A, as added Pub. L. 
102-325, title IV, Sec. 451, July 23, 1992, 106 Stat. 575, related to 
funds for administrative expenses under Federal direct loan 
demonstration program.


                               Amendments

    1998--Subsec. (a). Pub. L. 105-244, Sec. 454(1), amended heading and 
text of subsec. (a) generally. Prior to amendment, subsec. (a) related 
to availability of funds for administrative costs and cost allowances.
    Subsec. (b). Pub. L. 105-244, Sec. 454(2), amended heading and text 
of subsec. (b) generally. Prior to amendment, text read as follows: 
``Funds made available under subsection (a) of this section shall remain 
available until expended.''
    Subsec. (c). Pub. L. 105-244, Sec. 454(5), added subsec. (c). Former 
subsec. (c) redesignated (d).
    Subsec. (d). Pub. L. 105-244, Sec. 454(4), redesignated subsec. (c) 
as (d).
    Pub. L. 105-244, Sec. 454(3), struck out heading and text of subsec. 
(d). Text read as follows: ``In the event the Secretary finds it 
necessary to use the authority provided to the Secretary under 
subsection (a) of this section to draw funds for administrative expenses 
from a future year's funds, no funds may be expended under this section 
unless the Secretary immediately notifies the Committees on 
Appropriations of the Senate and of the House of Representatives, and 
the Labor and Human Resources Committee of the Senate and the Education 
and Labor Committee of the House of Representatives, of such action and 
explain the reasons for such action.''
    1997--Subsec. (a). Pub. L. 105-33 amended heading and text of 
subsec. (a) generally. Prior to amendment, text read as follows: ``Each 
fiscal year, there shall be available to the Secretary of Education from 
funds available pursuant to section 1072(g) of this title and from funds 
not otherwise appropriated, funds to be obligated for administrative 
costs under this part, including the costs of the transition from the 
loan programs under part B of this subchapter to the direct student loan 
programs under this part (including the costs of annually assessing the 
program under this part and the progress of the transition) and 
transition support (including administrative costs) for the expenses of 
guaranty agencies in servicing outstanding loans in their portfolios and 
in guaranteeing new loans, not to exceed (from such funds not otherwise 
appropriated) $260,000,000 in fiscal year 1994, $284,000,000 in fiscal 
year 1995, $550,000,000 in fiscal year 1996, $595,000,000 in fiscal year 
1997, and $750,000,000 in fiscal year 1998. If in any fiscal year the 
Secretary determines that additional funds for administrative expenses 
are needed as a result of such transition or the expansion of the direct 
student loan programs under this part, the Secretary is authorized to 
use funds available under this section for a subsequent fiscal year for 
such expenses, except that the total expenditures by the Secretary (from 
such funds not otherwise appropriated) shall not exceed $2,439,000,000 
in fiscal years 1994 through 1998. The Secretary is also authorized to 
carry over funds available under this section to a subsequent fiscal 
year.''
    Subsec. (a)(1). Pub. L. 105-78 substituted ``$507,000,000'' for 
``$532,000,000'' in closing provisions.
    1995--Subsec. (a). Pub. L. 104-19 substituted ``$284,000,000 in 
fiscal year 1995'' for ``$345,000,000 in fiscal year 1995'' and 
``$2,439,000,000 in fiscal years 1994 through 1998'' for 
``$2,500,000,000 in fiscal years 1994 through 1998''.
    1993--Pub. L. 103-66 amended section generally, substituting 
provisions relating to funds for administrative expenses for former 
provisions relating to reports.


                    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

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


                              Construction

    Section 609(m) of Pub. L. 105-78 provided that: ``Nothing in this 
Act [see Tables for classification] or an amendment made by this Act 
shall be construed to prohibit the Secretary of Education from using 
funds that are returned or otherwise recovered by the Secretary under 
section 422(g) of the Higher Education Act of 1965 (20 U.S.C. 1072(g)) 
including the balances of returned reserve funds, formerly held by the 
Higher Education Assistance Foundation, that are currently held in 
Higher Education Assistance Foundation Claims Reserves, Treasury account 
number 91X6192, for expenditure for expenses pursuant to section 458 of 
such Act (20 U.S.C. 1087h).''


Use of Funds for Administrative Expenses of William D. Ford Direct Loan 
                           Program Prohibited

    Pub. L. 104-208, div. A, title I, Sec. 101(e) [title III, Sec. 304], 
Sept. 30, 1996, 110 Stat. 3009-233, 3009-261, provided in part that: 
``Notwithstanding section 458 of the Higher Education Act [of 1965] [20 
U.S.C. 1087h], the Secretary may not use funds available under that 
section or any other section for subsequent fiscal years for 
administrative expenses of the William D. Ford Direct Loan Program.''
    Similar provisions were contained in the following prior 
appropriation act:
    Pub. L. 104-134, title I, Sec. 101(d) [title III, Sec. 305], Apr. 
26, 1996, 110 Stat. 1321-211, 1321-236; renumbered title I, Pub. L. 104-
140, Sec. 1(a), May 2, 1996, 110 Stat. 1327.

                  Section Referred to in Other Sections

    This section is referred to in sections 1018, 1072, 1072b, 1087e of 
this title.
