12 2 STA T .743PUBLIC LA W 11 0– 227 —M A Y 7 , 200 8SEC.4 .S P EC IALRU LES FO R PLUS LOA N S. Section428B(a) ( 3 )o f t h e H i g he rEdu cation A ct of 1965 (2 0U. S. C .10 7 8 – 2(a)(3)) i s a m ended to read as fo l lo w s
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‘(3) S PECIALRU LE S . — ‘‘(A) P ARE NTBO RRO W ERS.— W hene v er necessar y to carry out the p rovisions of this section , the terms ‘student ’ and ‘ b orrower’ as used in this part shall include a parent borrower under this section. ‘‘(B)(i) E X TENUATIN G CIRCU M STANCES.—An eligible lender may determine that e x tenuating circumstances exist under the regulations promulgated pursuant to paragraph (1)(A) if, during the period beginning J anuary 1, 2007, and ending D ecember 31, 2009, an applicant for a loan under this section— ‘‘( I ) is or has been delin q uent for 180 days or fewer on mortgage loan payments or on medical bill payments during such period
and ‘‘(II) is not and has not been more than 89 days delinquent on the repayment of any other debt during such period. ‘‘(ii) DE F INITION OF MORTGAGE LOAN.—In this subpara - graph, the term ‘mortgage loan’ means an extension of credit to a borrower that is secured by the primary resi- dence of the borrower. ‘‘(iii) R ULE OF CONSTRUCTION.— N othing in this subparagraph shall be construed to limit an eligible lender’s authority under the regulations promulgated pursuant to paragraph (1)(A) to determine that extenuating cir- cumstances exist.’’. SEC. 5 . LEN D ER - OF-LAS T -RESORT. (a) IN G ENERAL.—Section 428( j ) of the Higher Education Act of 1965 (20 U.S.C. 1078(j)) is amended— (1) in the first sentence of paragraph (1), by stri k ing ‘‘stu- dents eligible to receive interest benefits paid on their behalf under subsection (a) of this section who are otherwise unable to obtain loans under this part’’ and inserting ‘‘eligible students and parents who are otherwise unable to obtain loans under this part (except for consolidation loans under section 428C) or who attend an institution of higher education in the State that is designated under paragraph (4)’’; (1) in paragraph (1), by inserting after the second sentence the following: ‘‘No loan under section 428, 428B, or 428H that is made pursuant to this subsection shall be made with interest rates, origination or default fees, or other terms and conditions that are more favorable to the borrower than the maximum interest rates, origination or default fees, or other terms and conditions applicable to that type of loan under this part.’’; (2) in paragraph (2)(B), by inserting ‘‘, in the case of stu- dents and parents applying for loans under this subsection because of an inability to otherwise obtain loans under this part (except for consolidation loans under section 428C),’’ after ‘‘lender, nor’’; (3) in paragraph (3)(C)— (A) in the first sentence, by inserting ‘‘or designates an institution of higher education for participation in the
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