12 2 STA T .74 7 PUBLIC LA W 11 0– 227 —M A Y 7 , 200 8‘ ‘ (1)AUTHORI T Y;DE TER M I NA TION RE Q UIRED .—Uponadet e r-mi nation by t h e S e c retary that there i s an inade qu ate a v ai l - ability o f loan capital to meet the demand for loans under sections 428, 428 B ,or428 H , w hether as a result of inadequate liquidity for such loans or for other reasons, the Secretary, in consultation with the Secretary of the T reasury, is authori z ed to purchase, or enter into forward commitments to purchase, from any eli g ible lender, as defined by section 4 35 (d)(1), loans first disbursed under sections 428, 428B, or 428H on or after O ctober 1, 2 0 03, and before J uly 1, 200 9 , on such terms as the Secretary, the Secretary of the Treasury, and the D irector of the Office of M anagement and Budget j ointly determine are in the best interest of the United States, e x cept that any purchase under this section shall not result in any net cost to the F ederal G overnment (including the cost of servicing the loans purchased), as determined jointly by the Secretary, the Secretary of the Treasury, and the Director of the Office of Management and Budget. ‘‘(2) FEDERA L RE G I S TER NOTI C E.—The Secretary, the Sec- retary of the Treasury, and the Director of the Office of Manage- ment and Budget, shall jointly publish a notice in the Federal R egister prior to any purchase of loans under this section that— ‘‘(A) establishes the terms and conditions governing the purchases authorized by paragraph (1); ‘‘(B) includes an outline of the methodology and factors that the Secretary, the Secretary of the Treasury, and the Director of the Office of Management and Budget, will jointly consider in evaluating the price at which to purchase loans made under section 428, 428B, or 428H; and ‘‘( C ) describes how the use of such methodology and consideration of such factors used to determine purchase price will ensure that loan purchases do not result in any net cost to the Federal Government (including the cost of servicing the loans purchased). ‘‘(b) P ROCEEDS.—The Secretary shall require, as a condition of any purchase under subsection (a), that the funds paid by the Secretary to any eligible lender under this section shall be used
(1) to ensure continued participation of such lender in the Federal student loan programs authorized under part B of this title; and (2) to originate new Federal loans to students, as authorized under part B of this title. ‘‘(c) MAINTAINING SER V ICING ARRANGEMENTS.—The Secretary may, if agreed upon by an eligible lender selling loans under this section, contract with such lender for the servicing of the loans purchased, provided that— ‘‘(1) the cost of such servicing arrangement does not exceed the cost the Federal Government would otherwise incur for the servicing of loans purchased, as determined under sub- section (a); and ‘‘(2) such servicing arrangement is in the best interest of the borrowers whose loans are purchased. ‘‘(d) EXP IRATION O F AUTHORITY.—The Secretary ’ s authority to purchase loans under this section shall expire on July 1, 2009.’’. (c) CONTRACTING AUTHORITY.—Section 45 6 (b) of the Higher Education Act of 1965 (20 U.S.C. 108 7 f(b)) is amended by inserting
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