PUBLIC LAW 99-498—OCT. 17, 1986
100 STAT. 1445
"(D) charges collected pursuant to regulations under section 464(c)(l)(H); and "(E) any other earnings of the funds; "(3) provide that such student loan fund shall be used only for— "(A) loans to students, in accordance with the provisions of this part; I "(B) administrative expenses, as provided in subsection (b);
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"(C) capital distributions, as provided in section 466; and "(D) costs of litigation, and other collection costs agreed i^j; to by the Secretary in connection with the collection of a loan from the fund (and interest thereon) or a charge assessed pursuant to regulations under section 464(c)(l)(H); "(4) provide that where a note or written agreement evidenc- Reporcs. ing a note has been in default for (A) 120 days, in the case of a loan which is repayable in monthly installments, or (B) 180 f days, in the case of a loan which is repayable in less frequent installments, notice of such default shall be given to the Secretary in a report describing the total number of loans from J such fund which are in such default, and made to the Secretary at least semiannually; "(5) provide that where a note or written agreement evidencing a loan has been in default despite due diligence on the part of the institution in attempting collection thereon— "(A) if the institution has knowingly failed to maintain c, an acceptable collection record with respect to such loan, as g determined by the Secretary in accordance with criteria established by regulation, the Secretary may— "(i) require the institution to assign such note or (P f
agreement to the Secretary, without recompense; and / "(ii) apportion any sums collected on such a loan, less I an amount not to exceed 30 percent of any sums collected to cover the Secretary's collection costs, among other institutions in accordance with section 462; or , ji;» "(B) if the institution is not one described in subparagraph (A), the Secretary may— "(i) allow such institution to transfer its interest in fr^jiis: such loan to the Secretary, for collection, and the Secretary may use any collections thereon (less an amount j0 ijr.; not to exceed 30 percent of any such sums collected to cover the Secretary's collection costs) to make allocations to institutions of additional capital contributions ^; in accordance with section 462; or y "(ii) allow such institution to refer such note or £ agreement to the Secretary, without recompense, except that any sums collected on such a loan (less an rr;;^. amount not to exceed 30 percent of any such sums collected to cover the Secretary's collection costs) shall 0.-' be repaid to such institution no later than 180 days after collection by the Secretary and treated as an additional capital contribution; "(6) provide that, if an institution of higher education determines not to service and collect student loans made available from funds under this part, the institution will assign, at the -- beginning of the repayment period, notes or evidence of obliga• -;? i m tions of student loans made from such funds to the Secretary
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