Page:United States Statutes at Large Volume 100 Part 2.djvu/310
100 STAT. 1412
PUBLIC LAW 99-498—OCT. 17, 1986 tion and repayable in each such year, are in default, as defined in section 435(o). "(4) WAIVER OF DISQUALIFICATION.—Whenever the Secretary
determines that— "(A) there is reasonable possibility that an eligible institution may, within 1 year after a determination is made under paragraph (3), improve the collection of loans described in section 428(a)(1), so that the application of ij-v paragraph (3) would be a hardship to that institution, or .« "(B) the termination of the lender's status under paragraph (3) would be a hardship to the present or for prospective students of the eligible institution, after considering the management of that institution, the ability of that institution to improve the collection of loans, the opportunities that institution offers to economically disadvantaged students, and other related factors, the Secretary shall waive the provisions of paragraph (3) with respect to that institution. Any determination required under this paragraph shall be made by the Secretary prior to the termination of an eligible institution as a lender under the exception of paragraph (3). Whenever the Secretary grants a waiver pursuant to this paragraph, the Secretary shall provide technical assistance to the institution concerned in order to improve the collection rate of such loans. "(5) DISQUALIFICATION FOR USE OF CERTAIN INCENTIVES.—The
term 'eligible lender' does not include any lender that the Secretary determines, after notice and opportunity for a hearing, has after the date of enactment of this paragraph— "(A) offered, directly or indirectly, points, premiums, pay^ '"* ments, or other inducements, to any educational institution or individual in order to secure applicants for loans under this part; "(B) conducted unsolicited mailings to students of student loan application forms, except to students who have pre.»., viously received loans under this part from such lender; '^ "(C) offered, directly or indirectly, loans under this part as an inducement to a prospective borrower to purchase a policy of insurance or other product; or "(D) engaged in fraudulent or misleading advertising. "(e) LINE OF CREDIT.—The term 'line of credit' means an arrangement or agreement between the lender and the borrower whereby a loan is paid out by the lender to the borrower in annual installments, or whereby the lender agrees to make, in addition to the initial loan, additional loans in subsequent years. "(f) DUE DIUGENCE.—The term 'due diligence' requires the utilization by a lender, in the servicing and collection of loans insured under this part, of collection practices at least as extensive and forceful as those generally practiced by financial institutions for the collection of consumer loans. "(g) TEMPORARILY TOTALLY DISABLED.—
"(1) IN GENERAL.—The term 'temporarily totally disabled' when used with respect to a borrower means a borrower who, by reason of injury or illness, cannot be expected to be able to attend an eligible institution or to be gainfully employed during a reasonable period of recovery from such injury or illness not to exceed 3 years.