
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC292e]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 6A--PUBLIC HEALTH SERVICE
 
               SUBCHAPTER V--HEALTH PROFESSIONS EDUCATION
 
                          Part A--Student Loans
 
    subpart i--insured health education assistance loans to graduate 
                                students
 
Sec. 292e. Certificate of loan insurance; effective date of 
        insurance
        

(a) In general

              (1) Authority for issuance of certificate

        If, upon application by an eligible lender, made upon such form, 
    containing such information, and supported by such evidence as the 
    Secretary may require, and otherwise in conformity with this 
    section, the Secretary finds that the applicant has made a loan to 
    an eligible borrower which is insurable under the provisions of this 
    subpart, he may issue to the applicant a certificate of insurance 
    covering the loan and setting forth the amount and terms of the 
    insurance.

                   (2) Effective date of insurance

        Insurance evidenced by a certificate of insurance pursuant to 
    subsection (a)(1) of this section shall become effective upon the 
    date of issuance of the certificate, except that the Secretary is 
    authorized, in accordance with regulations, to issue commitments 
    with respect to proposed loans, or with respect to lines (or 
    proposed lines) of credit, submitted by eligible lenders, and in 
    that event, upon compliance with subsection (a)(1) of this section 
    by the lender, the certificate of insurance may be issued effective 
    as of the date when any loan, or any payment by the lender pursuant 
    to a line of credit, to be covered by such insurance is made to a 
    student described in section 292d(a)(1) of this title. Such 
    insurance shall cease to be effective upon 60 days' default by the 
    lender in the payment of any installment of the premiums payable 
    pursuant to section 292g of this title.

                 (3) Certain agreements for lenders

        An application submitted pursuant to subsection (a)(1) of this 
    section shall contain--
            (A) an agreement by the applicant to pay, in accordance with 
        regulations, the premiums fixed by the Secretary pursuant to 
        section 292g of this title; and
            (B) an agreement by the applicant that if the loan is 
        covered by insurance the applicant will submit such 
        supplementary reports and statements during the effective period 
        of the loan agreement, upon such forms, at such times, and 
        containing such information as the Secretary may prescribe by or 
        pursuant to regulation.

(b) Authority regarding comprehensive insurance coverage

                           (1) In general

        In lieu of requiring a separate insurance application and 
    issuing a separate certificate of insurance for each loan made by an 
    eligible lender as provided in subsection (a) of this section, the 
    Secretary may, in accordance with regulations consistent with 
    section 292a of this title, issue to any eligible lender applying 
    therefor a certificate of comprehensive insurance coverage which 
    shall, without further action by the Secretary, insure all insurable 
    loans made by that lender, on or after the date of the certificate 
    and before a specified cutoff date, within the limits of an 
    aggregate maximum amount stated in the certificate. Such regulations 
    may provide for conditioning such insurance, with respect to any 
    loan, upon compliance by the lender with such requirements (to be 
    stated or incorporated by reference in the certificate) as in the 
    Secretary's judgment will best achieve the purpose of this 
    subsection while protecting the financial interest of the United 
    States and promoting the objectives of this subpart, including (but 
    not limited to) provisions as to the reporting of such loans and 
    information relevant thereto to the Secretary and as to the payment 
    of initial and other premiums and the effect of default therein, and 
    including provision for confirmation by the Secretary from time to 
    time (through endorsement of the certificate) of the coverage of 
    specific new loans by such certificate, which confirmation shall be 
    incontestable by the Secretary in the absence of fraud or 
    misrepresentation of fact or patent error.

               (2) Lines of credit beyond cutoff date

        If the holder of a certificate of comprehensive insurance 
    coverage issued under this subsection grants to a borrower a line of 
    credit extending beyond the cutoff date specified in that 
    certificate, loans or payments thereon made by the holder after that 
    date pursuant to the line of credit shall not be deemed to be 
    included in the coverage of that certificate except as may be 
    specifically provided therein; but, subject to the limitations of 
    section 292a of this title, the Secretary may, in accordance with 
    regulations, make commitments to insure such future loans or 
    payments, and such commitments may be honored either as provided in 
    subsection (a) of this section or by inclusion of such insurance in 
    comprehensive coverage under this subsection for the period or 
    periods in which such future loans or payments are made.

(c) Assignment of insurance rights

    The rights of an eligible lender arising under insurance evidenced 
by a certificate of insurance issued to it under this section may be 
assigned by such lender, subject to regulation by the Secretary, only 
to--
        (1) another eligible lender (including a public entity in the 
    business of purchasing student loans); or
        (2) the Student Loan Marketing Association.

(d) Effect of refinancing or consolidation of obligations

    The consolidation of the obligations of two or more federally 
insured loans obtained by a borrower in any fiscal year into a single 
obligation evidenced by a single instrument of indebtedness or the 
refinancing of a single loan shall not affect the insurance by the 
United States. If the loans thus consolidated are covered by separate 
certificates of insurance issued under subsection (a) of this section, 
the Secretary may upon surrender of the original certificates issue a 
new certificate of insurance in accordance with that subsection upon the 
consolidated obligation. If the loans thus consolidated are covered by a 
single comprehensive certificate issued under subsection (b) of this 
section, the Secretary may amend that certificate accordingly.

(e) Rule of construction regarding consolidation of debts and 
        refinancing

    Nothing in this section shall be construed to preclude the lender 
and the borrower, by mutual agreement, from consolidating all of the 
borrower's loans insured under this subpart into a single instrument 
(or, if the borrower obtained only 1 loan insured under this subpart, 
refinancing the loan 1 time) under the terms applicable to an insured 
loan made at the same time as the consolidation. The lender or loan 
holder should provide full information to the borrower concerning the 
advantages and disadvantages of loan consolidation or refinancing. 
Nothing in this section shall be construed to preclude the consolidation 
of the borrower's loans insured under this subpart under section 1078-3 
of title 20. Any loans insured pursuant to this subpart that are 
consolidated under section 1078-3 of title 20 shall not be eligible for 
special allowance payments under section 1087-1 of title 20.

(July 1, 1944, ch. 373, title VII, Sec. 706, as added Pub. L. 102-408, 
title I, Sec. 102, Oct. 13, 1992, 106 Stat. 2000; amended Pub. L. 105-
392, title I, Sec. 145, Nov. 13, 1998, 112 Stat. 3581.)


                            Prior Provisions

    A prior section 292e, act July 1, 1944, ch. 373, title VII, 
Sec. 705, as added Oct. 12, 1976, Pub. L. 94-484, title II, Sec. 204, 90 
Stat. 2248; amended Nov. 9, 1978, Pub. L. 95-623, Sec. 11(f), 92 Stat. 
3456; Aug. 13, 1981, Pub. L. 97-35, title XXVII, Sec. 2718, 95 Stat. 
914, related to establishment and maintenance of records and annual 
financial reports and audits, prior to the general revision of this 
subchapter by Pub. L. 102-408.
    Another prior section 292e, act July 1, 1944, ch. 373, title VII, 
Sec. 706, as added July 30, 1956, 779, Sec. 2, 70 Stat. 719; amended 
Oct. 5, 1961, Pub. L. 87-395, Sec. 8(c), (d), 75 Stat. 827; Sept. 24, 
1963, Pub. L. 88-129, Sec. 2(a), 77 Stat. 164; Aug. 16, 1968, Pub. L. 
90-490, title IV, Sec. 402, 82 Stat. 789; Nov. 18, 1971, Pub. L. 92-157, 
title I, Sec. 102(k)(2)(A), (B), 85 Stat. 437, limited amount of grant 
available for construction of health research facilities, including 
provisions relating to its maximum, reservation of amount, manner of 
payment, and exclusion of amounts granted by certain other funds, prior 
to repeal by Pub. L. 94-484, title II, Sec. 201(a), Oct. 12, 1976, 90 
Stat. 2246.
    A prior section 706 of act July 1, 1944, was classified to section 
292f of this title prior to the general revision of this subchapter by 
Pub. L. 102-408.
    Another prior section 706 of act July 1, 1944, was classified to 
section 230 of this title prior to repeal by act Apr. 27, 1956, ch. 211, 
Sec. 5(e), 70 Stat. 117.


                               Amendments

    1998--Subsec. (d). Pub. L. 105-392, Sec. 145(1), in heading, 
substituted ``refinancing or consolidation'' for ``consolidation'' and, 
in first sentence, substituted ``indebtedness or the refinancing of a 
single loan'' for ``indebtedness''.
    Subsec. (e). Pub. L. 105-392, Sec. 145(2), in heading, substituted 
``debts and refinancing'' for ``debts'', in first sentence, substituted 
``all of the borrower's loans insured under this subpart into a single 
instrument (or, if the borrower obtained only 1 loan insured under this 
subpart, refinancing the loan 1 time)'' for ``all of the borrower's 
debts into a single instrument'', and in second sentence, substituted 
``consolidation or refinancing'' for ``consolidation''.

                  Section Referred to in Other Sections

    This section is referred to in sections 292a, 292f, 300t-12 of this 
title.
