20 U.S.C. § 1081 — Insurance fund

Page 482 TITLE 20—EDUCATION § 1081 rowers attend or previously attended. To further the purpose of this section, an eligible institu- tion may enter into an arrangement with any or all of the holders of delinquent loans made to borrowers who attend or previously attended such institution for the purpose of providing current information regarding the borrower’s lo- cation or employment or for the purpose of as- sisting the holder in contacting and influencing borrowers to avoid default. (f) Duration of authority Notwithstanding paragraphs (4) and (5) of sub- section (a) of section 605 of the Fair Credit Re- porting Act (15 U.S.C. 1681c(a)(4), (a)(5)), a con- sumer reporting agency may make a report con- taining information received from the Secretary or a guaranty agency, eligible lender, or subse- quent holder regarding the status of a bor- rower’s defaulted account on a loan guaranteed under this part until— (1) 7 years from the date on which the Sec- retary or the agency paid a claim to the hold- er on the guaranty; (2) 7 years from the date the Secretary, guar- anty agency, eligible lender, or subsequent holder first reported the account to the con- sumer reporting agency; or (3) in the case of a borrower who reenters re- payment after defaulting on a loan and subse- quently goes into default on such loan, 7 years from the date the loan entered default such subsequent time. (Pub. L. 89–329, title IV, § 430A, as added Pub. L. 99–498, title IV, § 402(a), Oct. 17, 1986, 100 Stat. 1398; amended Pub. L. 100–50, § 10(v), June 3, 1987, 101 Stat. 346; Pub. L. 102–325, title IV, § 424, July 23, 1992, 106 Stat. 543; Pub. L. 103–208, § 2(c)(52), Dec. 20, 1993, 107 Stat. 2467; Pub. L. 110–315, title IV, § 432(a), Aug. 14, 2008, 122 Stat. 3245; Pub. L. 111–39, title IV, § 402(f)(8), July 1, 2009, 123 Stat. 1944.) Editorial Notes REFERENCES IN TEXT The Fair Credit Reporting Act, referred to in subsec. (a), is title VI of Pub. L. 90–321, as added by Pub. L. 91–508, title VI, § 601, Oct. 26, 1970, 84 Stat. 1127, which is classified generally to subchapter III (§ 1681 et seq.) of chapter 41 of Title 15, Commerce and Trade. For com- plete classification of this Act to the Code, see Short Title note set out under section 1601 of Title 15 and Ta- bles. PRIOR PROVISIONS A prior section 1080a, Pub. L. 89–329, title IV, § 430A, as added Pub. L. 99–272, title XVI, § 16023, Apr. 7, 1986, 100 Stat. 349; amended Pub. L. 99–320, § 2(c), May 23, 1986, 100 Stat. 491, related to reports to credit bureaus and institutions of higher education, prior to the general revision of this part by Pub. L. 99–498. AMENDMENTS 2009—Subsec. (f). Pub. L. 111–39, in introductory pro- visions, substituted ‘‘and (5)’’ for ‘‘and (6)’’ and ‘‘(a)(5)’’ for ‘‘(a)(6)’’. 2008—Pub. L. 110–315, § 432(a)(1), substituted ‘‘con- sumer reporting agencies’’ for ‘‘credit bureaus’’ in sec- tion catchline. Subsec. (a). Pub. L. 110–315, § 432(a)(2)(B)–(D), added pars. (1) and (3) and redesignated former pars. (1), (2) and (3) as (2), (4) and (5), respectively. Pub. L. 110–315, § 432(a)(2)(A), in introductory provi- sions, substituted ‘‘the Secretary and’’ for ‘‘the Sec- retary,’’ and ‘‘an agreement with each consumer re- porting agency’’ for ‘‘agreements with credit bureau or- ganizations’’ in first sentence, ‘‘such consumer report- ing agencies’’ for ‘‘such organizations’’ in two places and ‘‘insurance) or by’’ for ‘‘insurance), by’’ in second sentence, and ‘‘Secretary or’’ for ‘‘Secretary,’’ and ‘‘consumer reporting agencies’’ for ‘‘organizations’’ in third sentence. Subsec. (b). Pub. L. 110–315, § 432(a)(3), substituted ‘‘consumer reporting agencies’’ for ‘‘organizations’’ and ‘‘subsection (a)(4)’’ for ‘‘subsection (a)(2)’’. Subsec. (c)(2). Pub. L. 110–315, § 432(a)(4)(A), sub- stituted ‘‘consumer reporting agencies’’ for ‘‘organiza- tions’’. Subsec. (c)(4). Pub. L. 110–315, § 432(a)(4)(B)(i), sub- stituted ‘‘subsection (a)(4)’’ for ‘‘subsection (a)(2)’’. Subsec. (c)(4)(A). Pub. L. 110–315, § 432(a)(4)(B)(ii), sub- stituted ‘‘consumer reporting agencies’’ for ‘‘credit bu- reau organizations’’. Subsec. (d). Pub. L. 110–315, § 432(a)(5), substituted ‘‘consumer reporting agency’’ for ‘‘credit bureau orga- nization’’. 1993—Subsec. (f)(1). Pub. L. 103–208 substituted a semicolon for the comma at end. 1992—Subsec. (f). Pub. L. 102–325 struck out ‘‘or’’ at end of par. (1), added pars. (2) and (3), and struck out former par. (2) which read as follows: ‘‘with regard to an account on a loan on which the Secretary or the guaranty agency has paid a claim but not reported the account to a consumer reporting agency on or before October 1, 1985, 7 years from that date.’’ 1987—Subsec. (e). Pub. L. 100–50 inserted sentence at end permitting an eligible institution to enter into ar- rangements with holders of delinquent loans made to borrowers for purpose of providing current information on borrower’s location or employment or to assist hold- er in contacting and influencing borrower to avoid de- fault. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2009 AMENDMENT Amendment by Pub. L. 111–39 effective as if enacted on the date of enactment of Pub. L. 110–315 (Aug. 14, 2008), see section 3 of Pub. L. 111–39, set out as a note under section 1001 of this title. EFFECTIVE DATE OF 1993 AMENDMENT Amendment by Pub. L. 103–208 effective as if included in the Higher Education Amendments of 1992, Pub. L. 102–325, except as otherwise provided, see section 5(a) of Pub. L. 103–208, set out as a note under section 1051 of this title. EFFECTIVE DATE OF 1987 AMENDMENT Amendment by Pub. L. 100–50 effective as if enacted as part of the Higher Education Amendments of 1986, Pub. L. 99–498, see section 27 of Pub. L. 100–50, set out as a note under section 1001 of this title. § 1081. Insurance fund (a) Establishment There is hereby established a student loan in- surance fund (hereinafter in this section called the ‘‘fund’’) which shall be available without fis- cal year limitation to the Secretary for making payments in connection with the default of loans insured by the Secretary under this part, or in connection with payments under a guar- anty agreement under section 1078(c) of this title. All amounts received by the Secretary as premium charges for insurance and as receipts, earnings, or proceeds derived from any claim or other assets acquired by the Secretary in con- Page 483 TITLE 20—EDUCATION § 1082 nection with operations under this part, any ex- cess advances under section 1072 of this title, and any other moneys, property, or assets de- rived by the Secretary from operations in con- nection with this section, shall be deposited in the fund. All payments in connection with the default of loans insured by the Secretary under this part, or in connection with such guaranty agreements shall be paid from the fund. Moneys in the fund not needed for current operations under this section may be invested in bonds or other obligations guaranteed as to principal and interest by the United States. (b) Borrowing authority If at any time the moneys in the fund are in- sufficient to make payments in connection with the default of any loan insured by the Secretary under this part, or in connection with any guar- anty agreement made under section 1078(c) of this title, the Secretary is authorized, to the ex- tent provided in advance by appropriations Acts, to issue to the Secretary of the Treasury notes or other obligations in such forms and denomi- nations, bearing such maturities, and subject to such terms and conditions as may be prescribed by the Secretary with the approval of the Sec- retary of the Treasury. Such notes or other obli- gations shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of the notes or other obligations. The Secretary of the Treasury is authorized and directed to purchase any notes and other obligations issued hereunder and for that purpose is authorized to use as a public debt transaction the proceeds from the sale of any securities issued under chapter 31 of title 31, and the purposes for which securities may be issued under that chapter, are extended to in- clude any purchase of such notes and obliga- tions. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired under this subsection. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or other obligations shall be treated as public debt transactions of the United States. Sums borrowed under the sub- section shall be deposited in the fund and re- demption of such notes and obligations shall be made by the Secretary from such fund. (Pub. L. 89–329, title IV, § 431, as added Pub. L. 99–498, title IV, § 402(a), Oct. 17, 1986, 100 Stat. 1400; amended Pub. L. 100–50, § 10(w), June 3, 1987, 101 Stat. 346.) Editorial Notes CODIFICATION In subsec. (b), ‘‘chapter 31 of title 31’’ and ‘‘that chap- ter’’ substituted for ‘‘the Second Liberty Bond Act, as amended’’ and ‘‘that Act, as amended’’, respectively, on authority of Pub. L. 97–258, § 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which enacted Title 31, Money and Finance. PRIOR PROVISIONS A prior section 1081, Pub. L. 89–329, title IV, § 431, Nov. 8, 1965, 79 Stat. 1245; Pub. L. 90–460, § 3(c), Aug. 3, 1968, 82 Stat. 638; Pub. L. 94–482, title I, § 127(a), Oct. 12, 1976, 90 Stat. 2126; Pub. L. 96–374, title XIII, § 1391(a)(1), Oct. 3, 1980, 94 Stat. 1503, related to a student loan insurance fund, prior to the general revision of this part by Pub. L. 99–498. AMENDMENTS 1987—Subsec. (a). Pub. L. 100–50 substituted ‘‘section 1072 of this title’’ for ‘‘section 1072(a)(4)(C) of this title’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1987 AMENDMENT Amendment by Pub. L. 100–50 effective as if enacted as part of the Higher Education Amendments of 1986, Pub. L. 99–498, see section 27 of Pub. L. 100–50, set out as a note under section 1001 of this title. FEDERAL FAMILY EDUCATION LOAN INSURANCE FUND Pub. L. 105–244, title IV, § 434, Oct. 7, 1998, 112 Stat. 1711, provided that: ‘‘Any funds in the insurance fund, as established under section 431 of the Higher Edu- cation Act of 1965 (20 U.S.C. 1081), on the date of enact- ment of this Act [Oct. 7, 1998] shall be transferred to and deposited in the Treasury. All funds received by the Secretary of Education under subsection (a) of such section after the date of enactment of this Act shall be deposited into the fund in accordance with such sub- section.’’ TRANSFER OF ASSETS AND LIABILITIES OF THE VOCATIONAL STUDENT LOAN INSURANCE FUND All assets and liabilities of the vocational student loan insurance fund transferred to the student loan in- surance fund, see section 116(c)(2) of Pub. L. 90–575, set out as a note under former section 981 et seq. of this title. § 1082. Legal powers and responsibilities (a) General powers In the performance of, and with respect to, the functions, powers, and duties, vested in him by this part, the Secretary may— (1) prescribe such regulations as may be nec- essary to carry out the purposes of this part, including regulations applicable to third party servicers (including regulations concerning fi- nancial responsibility standards for, and the assessment of liabilities for program viola- tions against, such servicers) to establish min- imum standards with respect to sound man- agement and accountability of programs under this part, except that in no case shall damages be assessed against the United States for the actions or inactions of such servicers; (2) sue and be sued in any court of record of a State having general jurisdiction or in any district court of the United States, and such district courts shall have jurisdiction of civil actions arising under this part without regard to the amount in controversy, and action in- stituted under this subsection by or against the Secretary shall survive notwithstanding any change in the person occupying the office of Secretary or any vacancy in that office; but no attachment, injunction, garnishment, or other similar process, mesne or final, shall be issued against the Secretary or property under the Secretary’s control and nothing herein shall be construed to except litigation arising out of activities under this part from the ap- plication of sections 509, 517, 547, and 2679 of title 28;