 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER IV--STUDENT ASSISTANCE
 
   Part F--General Provisions Relating to Student Assistance Programs
 
Sec. 1092a. Combined payment plan


(a) Eligibility for plan

    Upon the request of the borrower, a lender described in subparagraph 
(A), (B), or (C) of section 1078-3(a)(1) of this title, or defined in 
subpart I \1\ of part C of title VII of the Public Health Service Act 
may, with respect to a consolidation loan made under section 1078-3 of 
this title (and section 1087-2(o) of this title as in effect prior to 
the enactment of section 1078-3 of this title) and loans guaranteed 
under subpart I \1\ of part C of title VII of the Public Health Service 
Act (known as Health Education Assistance Loans), offer a combined 
payment plan under which the lender shall submit one bill to the 
borrower for the repayment of all such loans for the monthly or other 
similar period of repayment.
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    \1\ See References in Text note below.
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(b) Applicability of other requirements

    A lender offering a combined payment plan shall comply with all 
provisions of section 1078-3 of this title applicable to loans 
consolidated or to be consolidated and shall comply with all provisions 
of subpart I \1\ of part C of title VII of the Public Health Service Act 
applicable to loans under that subpart which are made part of the 
combined payment plan, except that a lender offering a combined payment 
plan under this section may offer consolidation loans pursuant to 
section 1078-3(b)(1)(A) of this title if such lender holds any 
outstanding loan of a borrower which is selected for inclusion in a 
combined payment plan.

(c) Lender eligibility

    Such lender may offer a combined payment plan only if--
        (1) the lender holds an outstanding loan of that borrower which 
    is selected by the borrower for incorporation into a combined 
    payment plan pursuant to this section (including loans which are 
    selected by the borrower for consolidation under this section); or
        (2) the borrower certifies that the borrower has sought and has 
    been unable to obtain a combined payment plan from the holders of 
    the outstanding loans of that borrower.

(d) Borrower selection of competing offers

    In the case of multiple offers by lenders to administer a combined 
payment plan for a borrower, the borrower shall select from among them 
the lender to administer the combined payment plan including its loan 
consolidation component.

(e) Effect of plan

    Upon selection of a lender to administer the combined payment plan, 
the lender may reissue any Health Education Assistance Loan selected by 
the borrower for incorporation in the combined payment plan which is not 
held by such lender and the proceeds of such reissued loan shall be paid 
by the lender to the holder or holders of the loans so selected to 
discharge the liability on such loans, if--
        (1) the lender selected to administer the combined payment plan 
    has determined to its satisfaction, in accordance with reasonable 
    and prudent business practices, for each loan being reissued (A) 
    that the loan is a legal, valid, and binding obligation of the 
    borrower; (B) that each such loan was made and serviced in 
    compliance with applicable laws and regulations; and (C) the 
    insurance on such loan is in full force and effect; and
        (2) the loan being reissued was not in default (as defined in 
    section 733(e)(3) \2\ of the Public Health Service Act) at the time 
    the request for a combined payment plan is made.
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    \2\ See References in Text note below.
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(f) Notes and insurance certificates

    (1) Each loan reissued under subsection (e) of this section shall be 
evidenced by a note executed by the borrower. The Secretary of Health 
and Human Services shall insure such loan under a certificate of 
comprehensive insurance with no insurance limit, but any such 
certificate shall only be issued to an authorized holder of loans 
insured under subpart I \2\ of part C of title VII of the Public Health 
Service Act (including the Student Loan Marketing Association). Such 
certificates shall provide that all loans reissued under this section 
shall be fully insured against loss of principal and interest. Any 
insurance issued with respect to loans reissued under this section shall 
be excluded from the limitation on maximum insurance authority set forth 
in section 728(a) \2\ of the Public Health Service Act. Notwithstanding 
the provisions of section 729(a) \2\ of the Public Health Service Act, 
the reissued loan shall be made in an amount, including outstanding 
principal, capitalized interest, accrued unpaid interest not yet 
capitalized, and authorized late charges. The proceeds of each such loan 
will be paid by the lender to the holder of the original loan being 
reissued and the borrower's obligation to that holder on that loan shall 
be discharged.
    (2) Except as otherwise specifically provided for under the 
provisions of this section, the terms of any reissued loan shall be the 
same as the terms of the original loan. The maximum repayment period for 
a loan reissued under this section shall not exceed the remainder of the 
period which would have been permitted on the original loan. If the 
lender holds more than one loan insured under subpart I \2\ of part C of 
title VII of the Public Health Service Act, the maximum repayment period 
for all such loans may extend to the latest date permitted for any 
individual loan. Any reissued loan may be consolidated with any other 
Health Education Assistance Loan as provided in the Public Health 
Service Act [42 U.S.C. 201 et seq.], and, with the concurrence of the 
borrower, repayment of any such loans during any period may be made in 
amounts that are less than the interest that accrues on such loans 
during that period.

(g) Termination of borrower eligibility

    The status of an individual as an eligible combined payment plan 
borrower terminates upon receipt of a combined payment plan.

(h) Fees and premiums

    No origination fee or insurance premium shall be charged to the 
borrower on any combined payment plan, and no origination fee or 
insurance premium shall be payable by the lender to the Secretary of 
Health and Human Services.

(i) Commencement of repayment

    Repayment of a combined payment plan shall commence within 60 days 
after the later of the date of acceptance of the lender's offer to 
administer a combined payment plan, the making of the consolidation loan 
or the reissuance of any Health Education Assistance Loans pursuant to 
subsection (e) of this section.

(Pub. L. 89-329, title IV, Sec. 485A, as added Pub. L. 99-498, title IV, 
Sec. 407(a), Oct. 17, 1986, 100 Stat. 1484; amended Pub. L. 100-50, 
Sec. 15(12), June 3, 1987, 101 Stat. 357.)

                       References in Text

    The Public Health Service Act, referred to in subsecs. (a), (b), and 
(f), is act July 1, 1944, ch. 373, 58 Stat. 682, as amended, which is 
classified generally to chapter 6A (Sec. 201 et seq.) of Title 42, The 
Public Health and Welfare. Subpart I of part C of title VII of the Act 
was classified generally to subpart I (Sec. 294 et seq.) of part C of 
subchapter V of chapter 6A of Title 42 and was omitted in the general 
revision of subchapter V of chapter 6A by Pub. L. 102-408, title I, 
Sec. 102, Oct. 13, 1992, 106 Stat. 1994. See subpart I (Sec. 292 et 
seq.) of part A of subchapter V of chapter 6A. Sections 728, 729, and 
733 of the Act were classified to sections 294a, 294b, and 294f, 
respectively, of Title 42 and were omitted in the general revision of 
subchapter V by Pub. L. 102-408. Pub. L. 102-408 enacted a new section 
728 of act July 1, 1944, relating to distribution of assets, a new 
section 762, relating to special projects, and a new section 763, 
relating to preventive medicine and dental public health which are 
classified to sections 292x, 294a, and 294b, respectively, of Title 42. 
See sections 292a, 292b, and 292f, respectively, of Title 42. For 
complete classification of this Act to the Code, see Short Title note 
set out under section 201 of Title 42 and Tables.


                               Amendments

    1987--Subsec. (a). Pub. L. 100-50 substituted ``subparagraph (A), 
(B), or (C)'' for ``clause (i), (ii), or (iii)''.


                    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.
