20 U.S.C. § 1087aa — Appropriations authorized

Page 579 TITLE 20—EDUCATION § 1087aa 2008), see section 3 of Pub. L. 111–39, set out as a note under section 1001 of this title. EFFECTIVE DATE OF 2006 AMENDMENT Amendment by Pub. L. 109–171 effective July 1, 2006, except as otherwise provided, see section 8001(c) of Pub. L. 109–171, set out as a note under section 1002 of this title. EFFECTIVE DATE OF 2004 AMENDMENT; TRANSITION RULE Amendment by section 3(b)(2) of Pub. L. 108–409 appli- cable only with respect to eligible individuals who are new borrowers (as defined in section 1003 of this title) on or after Oct. 1, 1998, see section 3(b)(3) of Pub. L. 108–409, as amended, set out as a note under section 1078–10 of this title. For transition rules relating to amendments made by section 3(a)(1)(B) of Pub. L. 108–409, see section 3(a)(2) of Pub. L. 108–409, set out as a note under section 1078–10 of this title. EFFECTIVE DATE Section effective Oct. 1, 1998, except as otherwise pro- vided in Pub. L. 105–244, see section 3 of Pub. L. 105–244, set out as an Effective Date of 1998 Amendment note under section 1001 of this title. PART E—FEDERAL PERKINS LOANS Editorial Notes CODIFICATION This part was added as part E of title IV of Pub. L. 89–329 by Pub. L. 92–318, title I, § 137(b), June 23, 1972, 86 Stat. 273, and amended by Pub. L. 94–482, Oct. 12, 1976, 90 Stat. 2081; Pub. L. 95–43, June 15, 1977, 91 Stat. 213; Pub. L. 95–561, Nov. 1, 1978, 92 Stat. 2143; Pub. L. 96–49, Aug. 13, 1979, 93 Stat. 351; Pub. L. 96–374, Oct. 3, 1980, 94 Stat. 1367; Pub. L. 97–35, Aug. 13, 1981, 95 Stat. 357; Pub. L. 97–301, Oct. 13, 1982, 96 Stat. 1400; Pub. L. 98–79, Aug. 15, 1983, 97 Stat. 476; Pub. L. 99–272, Apr. 7, 1986, 100 Stat. 82. Such part is shown herein, however, as having been added by Pub. L. 99–498, title IV, § 405(a), Oct. 17, 1986, 100 Stat. 1439, without reference to such intervening amendments because of the extensive revision of this part by Pub. L. 99–498. Part E of title IV of the Higher Education Act of 1965, Pub. L. 89–329, which comprises this part, was formerly classified to part D of this subchapter. See Codification note preceding section 1087a of this title. PRIOR PROVISIONS A prior part E, consisting of part F of title IV of Pub. L. 89–329, was redesignated part F of this subchapter. § 1087aa. Appropriations authorized (a) Program authority The Secretary shall carry out a program as- sisting in the maintenance of funds at institu- tions of higher education for the making of loans to undergraduate students in need to pur- sue their courses of study in such institutions or while engaged in programs of study abroad ap- proved for credit by such institutions. Loans made under this part shall be known as ‘‘Federal Perkins Loans’’. (b) Authority to make loans (1) In general (A) Loans for new undergraduate Federal Perkins Loan borrowers Through September 30, 2017, an institution of higher education may make a loan under this part to an eligible undergraduate stu- dent who, on the date of disbursement of a loan made under this part, has no out- standing balance of principal or interest on a loan made under this part from the stu- dent loan fund established under this part by the institution, but only if the institution has awarded all Federal Direct Loans, as ref- erenced under subparagraphs (A) and (D) of section 1087e(a)(2) of this title, for which such undergraduate student is eligible. (B) Loans for current undergraduate Federal Perkins Loan borrowers Through September 30, 2017, an institution of higher education may make a loan under this part to an eligible undergraduate stu- dent who, on the date of disbursement of a loan made under this part, has an out- standing balance of principal or interest on a loan made under this part from the stu- dent loan fund established under this part by the institution, but only if the institution has awarded all Federal Direct Stafford Loans as referenced under section 1087e(a)(2)(A) of this title for which such un- dergraduate student is eligible. (C) Loans for certain graduate borrowers Through September 30, 2016, with respect to an eligible graduate student who has re- ceived a loan made under this part prior to October 1, 2015, an institution of higher edu- cation that has most recently made such a loan to the student for an academic program at such institution may continue making loans under this part from the student loan fund established under this part by the insti- tution to enable the student to continue or complete such academic program. (2) No additional loans An institution of higher education shall not make loans under this part after September 30, 2017. (3) Prohibition on additional appropriations No funds are authorized to be appropriated under this chapter or any other Act to carry out the functions described in paragraph (1) for any fiscal year following fiscal year 2015. (Pub. L. 89–329, title IV, § 461, as added Pub. L. 99–498, title IV, § 405(a), Oct. 17, 1986, 100 Stat. 1439; amended Pub. L. 102–325, title IV, § 461(a)(2)–(c), July 23, 1992, 106 Stat. 576; Pub. L. 105–244, title IV, § 461, Oct. 7, 1998, 112 Stat. 1720; Pub. L. 110–315, title IV, § 461, Aug. 14, 2008, 122 Stat. 3265; Pub. L. 114–105, § 2(a)(1), Dec. 18, 2015, 129 Stat. 2219.) Editorial Notes PRIOR PROVISIONS A prior section 1087aa, Pub. L. 89–329, title IV, § 461, as added Pub. L. 92–318, title I, § 137(b), June 23, 1972, 86 Stat. 273; amended Pub. L. 94–482, title I, § 130(a), (b), Oct. 12, 1976, 90 Stat. 2146; Pub. L. 96–49, § 5(d)(1), (2), Aug. 13, 1979, 93 Stat. 352; Pub. L. 96–374, title IV, § 441, title XIII, § 1391(a)(1), Oct. 3, 1980, 94 Stat. 1436, 1503, au- thorized a program to establish and maintain funds at institutions of higher education for making low-inter- est loans to students, prior to the general revision of this part by Pub. L. 99–498. Another prior section 461 of Pub. L. 89–329 amended former section 403 of this title. Page 580 TITLE 20—EDUCATION § 1087bb 1 See References in Text note below. AMENDMENTS 2015—Subsec. (a). Pub. L. 114–105, § 2(a)(1)(A), sub- stituted ‘‘assisting in the maintenance of funds at in- stitutions of higher education for the making of loans to undergraduate students in need’’ for ‘‘of stimulating and assisting in the establishment and maintenance of funds at institutions of higher education for the mak- ing of low-interest loans to students in need thereof’’. Subsec. (b). Pub. L. 114–105, § 2(a)(1)(B), added subsec. (b) and struck out former subsec. (b). Prior to amend- ment, text read as follows: ‘‘(1) For the purpose of enabling the Secretary to make contributions to student loan funds established under this part, there are authorized to be appropriated $300,000,000 for fiscal year 2009 and for each of the five succeeding fiscal years. ‘‘(2) In addition to the funds authorized under para- graph (1), there are hereby authorized to be appro- priated such sums for fiscal year 2015 and each of the 5 succeeding fiscal years as may be necessary to enable students who have received loans for academic years ending prior to October 1, 2015, to continue or complete courses of study.’’ Subsec. (c). Pub. L. 114–105, § 2(a)(1)(C), struck out subsec. (c). Text read as follows: ‘‘Any sums appro- priated pursuant to subsection (b) of this section for any fiscal year shall be available for apportionment pursuant to section 1087bb of this title and for pay- ments of Federal capital contributions therefrom to in- stitutions of higher education which have agreements with the Secretary under section 1087cc of this title. Such Federal capital contributions and all contribu- tions from such institutions shall be used for the estab- lishment, expansion, and maintenance of student loan funds.’’ 2008—Subsec. (b)(1). Pub. L. 110–315, § 461(1), sub- stituted ‘‘$300,000,000 for fiscal year 2009 and for each of the five succeeding fiscal years’’ for ‘‘$250,000,000 for fis- cal year 1999 and such sums as may be necessary for each of the 4 succeeding fiscal years’’. Subsec. (b)(2). Pub. L. 110–315, § 461(2), substituted ‘‘2015’’ for ‘‘2003’’ in two places. 1998—Subsec. (b)(1). Pub. L. 105–244, § 461(1), sub- stituted ‘‘1999’’ for ‘‘1993’’. Subsec. (b)(2). Pub. L. 105–244, § 461(2), substituted ‘‘2003’’ for ‘‘1997’’ in two places. 1992—Subsec. (a). Pub. L. 102–325, § 461(a)(2), (b), in- serted ‘‘or while engaged in programs of study abroad approved for credit by such institutions’’ after ‘‘in such institutions’’ and substituted ‘‘Federal Perkins Loans’’ for ‘‘Perkins Loans’’. Subsec. (b). Pub. L. 102–325, § 461(c), amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: ‘‘(1) For the purpose of enabling the Secretary to make contributions to student loan funds established under this part, there are authorized to be appropriated $268,000,000 for fiscal year 1987 and such sums as may be necessary for each of the 4 succeeding fiscal years. ‘‘(2) In addition there are hereby authorized to be ap- propriated such sums for fiscal year 1991 and each of the five succeeding fiscal years as may be necessary to enable students who have received loans for academic years ending prior to October 1, 1991, to continue or complete courses of study.’’ Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1998 AMENDMENT Amendment by Pub. L. 105–244 effective Oct. 1, 1998, except as otherwise provided in Pub. L. 105–244, see sec- tion 3 of Pub. L. 105–244, set out as a note under section 1001 of this title. CONSTRUCTION OF 2015 AMENDMENT Pub. L. 114–105, § 2(a)(2), Dec. 18, 2015, 129 Stat. 2220, provided that: ‘‘Notwithstanding the amendments made under paragraph (1) of this subsection [amending this section], an eligible graduate borrower who re- ceived a disbursement of a loan under part E of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087aa et seq.) after June 30, 2016 and before October 1, 2016, for the 2016–2017 award year, may receive a subsequent dis- bursement of such loan by June 30, 2017, for which the borrower received an initial disbursement after June 30, 2016 and before October 1, 2016.’’ § 1087bb. Allocation of funds (a) Allocation based on previous allocation (1) From the amount appropriated pursuant to section 1087aa(b) 1 of this title for each fiscal year, the Secretary shall first allocate to each eligible institution an amount equal to— (A) 100 percent of the amount received under subsections (a) and (b) of this section for fiscal year 1999 (as such subsections were in effect with respect to allocations for such fiscal year), multiplied by (B) the institution’s default penalty, as de- termined under subsection (e), except that if the institution has a cohort de- fault rate in excess of the applicable maximum cohort default rate under subsection (f), the in- stitution may not receive an allocation under this paragraph. (2)(A) From the amount so appropriated, the Secretary shall next allocate to each eligible in- stitution that began participation in the pro- gram under this part after fiscal year 1999 but is not a first or second time participant, an amount equal to the greater of— (i) $5,000; or (ii) 100 percent of the amount received and expended under this part for the first year it participated in the program. (B) From the amount so appropriated, the Sec- retary shall next allocate to each eligible insti- tution that began participation in the program under this part after fiscal year 1999 and is a first or second time participant, an amount equal to the greatest of— (i) $5,000; (ii) an amount equal to (I) 90 percent of the amount received and used under this part in the second preceding fiscal year by eligible in- stitutions offering comparable programs of in- struction, divided by (II) the number of stu- dents enrolled at such comparable institutions in such fiscal year, multiplied by (III) the number of students enrolled at the applicant institution in such fiscal year; or (iii) 90 percent of the institution’s allocation under this part for the preceding fiscal year. (C) Notwithstanding subparagraphs (A) and (B) of this paragraph, the Secretary shall allocate to each eligible institution which— (i) was a first-time participant in the pro- gram in fiscal year 2000 or any subsequent fis- cal year, and (ii) received a larger amount under this sub- section in the second year of participation, an amount equal to 90 percent of the amount it received under this subsection in its second year of participation. (D) For any fiscal year after a fiscal year in which an institution receives an allocation