PUBLIC LAW 99-498—OCT. 17, 1986
100 STAT. 1485
which are made part of the combined payment plan, except that a lender offering a combined payment plan under this section may offer consolidation loans pursuant to section 428C(b)(l)(A) if such lender holds any outstanding loan of a borrower which is selected for inclusion in a combined payment plan. "(c) LENDER ELIGIBILITY.—Such lender may offer a combined payment plan only if— . H:."(1) the lender holds an outstanding loan of that borrower which is selected by the borrower for incorporation into a
combined payment plan pursuant to this section (including loans which are selected by the borrower for consolidation ' " - -t ^ under this section); or r "(2) the borrower certifies that the borrower has sought and has been unable to obtain a combined payment plan from the holders of the outstanding loans of that borrower. "(d) BORROWER SELECTION OF COMPETING OFFERS.—In the case of multiple offers by lenders to administer a combined payment plan for a borrower, the borrower shall select from among them the lender to administer the combined payment plan including its loan consolidation component. "(e) EFFECT OF PLAN.—Upon selection of a lender to administer the combined payment plan, the lender may reissue any Health Education Assistance Loan selected by the borrower for incorporation in the combined payment plan which is not held by such lender and the proceeds of such reissued loan shall be paid by the lender to the holder or holders of the loans so selected to discharge the liability on such loans, if— "(1) the lender selected to administer the combined payment plan has determined to its satisfaction, in accordance with reasonable and prudent business practices, for each loan being .^^ ^' reissued (A) that the loan is a legal, valid, and binding obliga^ tion of the borrower; (B) that each such loan was made and serviced in compliance with applicable laws and regulations;
- ,t and (C) the insurance on such loan is in full force and effect; and
"(2) the loan being reissued was not in default (as defined in section 733(e)(3) of the Public Health Service Act) at the time 42 USC 294f. the request for a combined payment plan is made. "(f) NOTES AND INSURANCE CERTIFICATES.—(1) Each loan reissued under subsection (e) shall be evidenced by a note executed by the borrower. The Secretary of Health and Human Services shall insure such loan under a certificate of comprehensive insurance with no insurance limit, but any such certificate shall only be issued to an authorized holder of loans insured under subpart I of part C of title VII of the Public Health Service Act (including the Student Loan 42 USC 294. Marketing Association). Such certificates shall provide that all loans reissued under this section shall be fully insured against loss of principal and interest. Any insurance issued with respect to loans reissued under this section shall be excluded from the limitation on maximum insurance authority set forth in section 728(a) of the Public Health Service Act. Notwithstanding the provisions of sec- 42 USC 294a. tion 729(a) of the Public Health Service Act, the reissued loan shall 42 USC 294b. be made in an amount, including outstanding principal, capitalized interest, accrued unpaid interest not yet capitalized, and authorized late charges. The proceeds of each such loan will be paid by the lender to the holder of the original loan being reissued and the borrower's obligation to that holder on that loan shall be discharged.
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