106 STAT. 532 PUBLIC LAW 102-325—JULY 23, 1992 "(2) a check copayable to the eligible institution and the parent borrower.". (c) LIMITATION OF DEFERRAL. — Section 428B(d)(l) of the Act (as redesignated in paragraph (3)) is amended to read as follows: "(1) COMMENCEMENT OF REPAYMENT. —Repayment of principal on loans made under this section shall commence not later than 60 da^s after the date such loan is disbursed by title lender, subject to deferral during any period during which the parent meets the conditions required for a deferral under section 427(a)(2)(C) or 428(b)(l)(M). ". (d) CAPITALIZATION OF INTEREST. — Section 428B(d)(2) of the Act (as redesignated in paragraph (3)) is amended to read as follows: "(2) CAPITALIZATION OF INTEREST.— Interest on loans made under this section for which payments of principal are deferred pursuant to paragraph (1) of this subsection shall, if agreed upon by the borrower and the lender (A) be psiid monthly or quarterly, or (B) be added to the principal amount of the loan not more frequently than quarterly by the lender. Such capitalization of interest shall not be deemed to exceed the annual insurable limit on account of the borrower.". SEC. 419. CONSOLIDATION LOANS. (a) NAME OF THE PROGRAM. —Section 428C of the Act (20 U.S.C. 1078-3) is amended by striking the heading of such section and inserting the following: "FEDERAL CONSOLIDATION LOANS". (b) USE OF CONSOLIDATION TO AVOID DEFAULT. — (1) ELIGIBLE BORROWER. — (A) Section 428C(a)(3)(A)(i) is amended by striking "$5,000" and inserting "$7,500". (B) Section 428C(a)(3)(A)(ii) is amended to read as follows: "(ii) is in repayment status, or in a grace period preceding repa5anent, or is a delinquent or defaulted borrower who will reenter repayment through loan consolidation.". (2) ELIGIBLE LOANS. —Section 428C(a)(4)(A) of the Act is amended to read as follows: "(A) made, insured, or guaranteed under this part, including loans on which the borrower has defaulted (but has made arrcingements to repay the obKgation on the defaulted loans satisfactory to the Secretary or guaranty agency, whichever insured the loans), except for loans made to parent borrowers under section 428B as in effect prior to the enactment of the Higher Education Amendments of 1986;". (c) EXTENSION OF CONSOLIDATION ELIGIBILITY PERIOD.—Section 428C(a)(3)(B) of the Act is amended to read as follows: "(B)(i) An individual's status as an eligible borrower under this section terminates upon receipt of a consolidation login under this section, except— "(I) with respect to eligible student loans received after the date of receipt of the consolidation loan; and , "(II) that loans received prior to the date of the consolidation loan may be added to the consolidation loan during , the 180-day period following the making of the consoUdation loan. a.s "(ii) Loans made under this section shall, to the extent used to discharge loans made under this title, be counted against
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