PUBLIC LAW 102-325—JULY 23, 1992 106 STAT. 525 an extension of time for making pa3nnents, or smaller pay- ments than were previously scheduled."; and (D) by striking the last sentence and inserting the following: "Guaranty agencies shall not be precluded from permitting the parties to such a loan from entering into a forbearance agreement solely because the loan is in default. The Secretary shall permit lenders to exercise administrative forbearances that do not require the agreement of the borrower, under conditions authorized by the Secretary. Such forbearances shall include (i) forbearances for borrowers who are delinquent at the time of the granting of an authorized period of deferment under section 428(b)(l)(M) or 427(a)(2)(C), and (ii) if the borrower is less than 60 days delinquent on such loans at the time of sale or transfer, forbearances for borrowers on loans which are sold or transferred.". (5) NEW PROGRAMS' INSURANCE PERCENTAGE. —Section 428(c)(7) of the Act is amended— 20 USC 1078. (A) in subparagraph (A)— (i) in the matter preceding clause (i), by striking " (1)(B)" and inserting "(1)(C)"; and (ii) in clause (i), by inserting "and ends before October 1, 1991" before the semicolon; (B) in subparagraph (B), by inserting "or (B)" after "(A)"; (C) by redesignating subparagraph (B) (as amended) as subparagraph (C); and (D) by inserting after subparagraph (A) the following new subparagraph: "(B) Notwithstanding the provisions of paragraph (1)(C), the Secretary may pay a guaranty agency 100 percent of the amount expended by such agency in discharge of such agency's insurance obligation for any fiscal year which— "(i) begins on or after October 1, 1991; and "(ii) is the fiscal year in which such guaranty agency begins to actively carry on a student loan insurance program which is subject to a guaranty agreement under subsection (b) or is one of the 4 succeeding fiscsil years.". (6) CONSIDERATIONS IN REQUIRING ASSIGNMENT.— Section 428(c)(8) of the Act is amended by adding at the end the following new sentences: "Prior to making such determination for any guaranty agency, the Secretary shall, in consultation with the guaranty agency, develop criteria to determine whether such agency has made adequate collections efforts. In determining whether a guaranty agency's collection efforts have met such criteria, the Secretary shall consider the agenc/s record of success in collecting on defaulted loans, the age of the loans, and the amount of recent payments received on the loans.". (7) GUARANTY AGENCY RESERVE LEVEL. —Section 428(c) of the Act is amended by adding at the end the following new paragraph: "(10) GUARANTY AGENCY RESERVE LEVEL.— (A) Each guaranty agency which has entered into an agreement with the Secretary pursuant to this subsection shall maintain a current minimum reserve level of at least.5 percent of the total attributable amount of all outstanding loans guarginteed by such agency for the fiscal year of the agency that begins in 1993. For
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