
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: 42USC292g]

 
                 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. 292g. Risk-based premiums


(a) Authority

    With respect to a loan made under this subpart on or after January 
1, 1993, the Secretary, in accordance with subsection (b) of this 
section, shall assess a risk-based premium on an eligible borrower and, 
if required under this section, an eligible institution that is based on 
the default rate of the eligible institution involved (as defined in 
section 292o of this title).

(b) Assessment of premium

    Except as provided in subsection (d)(2) of this section, the risk-
based premium to be assessed under subsection (a) of this section shall 
be as follows:

                          (1) Low-risk rate

        With respect to an eligible borrower seeking to obtain a loan 
    for attendance at an eligible institution that has a default rate of 
    not to exceed five percent, such borrower shall be assessed a risk-
    based premium in an amount equal to 6 percent of the principal 
    amount of the loan.

                        (2) Medium-risk rate

        (A) In general

            With respect to an eligible borrower seeking to obtain a 
        loan for attendance at an eligible institution that has a 
        default rate of in excess of five percent but not to exceed 10 
        percent--
                (i) such borrower shall be assessed a risk-based premium 
            in an amount equal to 8 percent of the principal amount of 
            the loan; and
                (ii) such institution shall be assessed a risk-based 
            premium in an amount equal to 5 percent of the principal 
            amount of the loan.

        (B) Default management plan

            An institution of the type described in subparagraph (A) 
        shall prepare and submit to the Secretary for approval, an 
        annual default management plan, that shall specify the detailed 
        short-term and long-term procedures that such institution will 
        have in place to minimize defaults on loans to borrowers under 
        this subpart. Under such plan the institution shall, among other 
        measures, provide an exit interview to all borrowers that 
        includes information concerning repayment schedules, loan 
        deferments, forbearance, and the consequences of default.

                         (3) High-risk rate

        (A) In general

            With respect to an eligible borrower seeking to obtain a 
        loan for attendance at an eligible institution that has a 
        default rate of in excess of 10 percent but not to exceed 20 
        percent--
                (i) such borrower shall be assessed a risk-based premium 
            in an amount equal to 8 percent of the principal amount of 
            the loan; and
                (ii) such institution shall be assessed a risk-based 
            premium in an amount equal to 10 percent of the principal 
            amount of the loan.

        (B) Default management plan

            An institution of the type described in subparagraph (A) 
        shall prepare and submit to the Secretary for approval a plan 
        that meets the requirements of paragraph (2)(B).

                          (4) Ineligibility

        An individual shall not be eligible to obtain a loan under this 
    subpart for attendance at an institution that has a default rate in 
    excess of 20 percent.

(c) Reduction of risk-based premium

    Lenders shall reduce by 50 percent the risk-based premium to 
eligible borrowers if a credit worthy parent or other responsible party 
co-signs the loan note.

(d) Administrative waivers

                             (1) Hearing

        The Secretary shall afford an institution not less than one 
    hearing, and may consider mitigating circumstances, prior to making 
    such institution ineligible for participation in the program under 
    this subpart.

                           (2) Exceptions

        In carrying out this section with respect to an institution, the 
    Secretary may grant an institution a waiver of requirements of 
    paragraphs (2) through (4) of subsection (b) of this section if the 
    Secretary determines that the default rate for such institution is 
    not an accurate indicator because the volume of the loans under this 
    subpart made by such institution has been insufficient.

               (3) Transition for certain institutions

        During the 3-year period beginning on October 13, 1992--
            (A) subsection (b)(4) of this section shall not apply with 
        respect to any eligible institution that is a Historically Black 
        College or University; and
            (B) any such institution that has a default rate in excess 
        of 20 percent, and any eligible borrower seeking a loan for 
        attendance at the institution, shall be subject to subsection 
        (b)(3) of this section to the same extent and in the same manner 
        as eligible institutions and borrowers described in such 
        subsection.

(e) Payoff to reduce risk category

    An institution may pay off the outstanding principal and interest 
owed by the borrowers of such institution who have defaulted on loans 
made under this subpart in order to reduce the risk category of the 
institution.

(July 1, 1944, ch. 373, title VII, Sec. 708, as added Pub. L. 102-408, 
title I, Sec. 102, Oct. 13, 1992, 106 Stat. 2004.)


                            Prior Provisions

    A prior section 292g, act July 1, 1944, ch. 373, title VII, 
Sec. 707, as added Oct. 12, 1976, Pub. L. 94-484, title II, Sec. 205, 90 
Stat. 2249; amended Aug. 1, 1977, Pub. L. 95-83, title III, Sec. 307(r), 
91 Stat. 395, related to delegation of authority by the Secretary, prior 
to the general revision of this subchapter by Pub. L. 102-408.
    Another prior section 292g, act July 1, 1944, ch. 373, title VII, 
Sec. 708, as added July 30, 1956, ch. 779, Sec. 2, 70 Stat. 720; amended 
Oct. 5, 1961, Pub. L. 87-395, Sec. 8(d), 75 Stat. 827; Sept. 24, 1963, 
Pub. L. 88-129, Sec. 2(a), 77 Stat. 164, prohibited Federal interference 
with administration of institutions where grants were made for 
construction of health research facilities, prior to repeal by Pub. L. 
94-484, title II, Sec. 201(a), Oct. 12, 1976, 90 Stat. 2246.
    A prior section 708 of act July 1, 1944, was classified to section 
292h of this title prior to the general revision of this subchapter by 
Pub. L. 102-408.


                             Effective Date

    Section effective Jan. 1, 1993, and until such date, former section 
294e(c) of this title, as in effect on the day before Oct. 13, 1992, to 
continue in effect in lieu of this section, see section 103 of Pub. L. 
102-408, set out as a note under section 292 of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 292e of this title.
