94 STAT. 1430
PUBLIC LAW 96-374—OCT. 3, 1980
this subsection shall be treated as public debt transactions of the United States. "(6) Notwithstanding any other provision of law the Association is authorized to sell or issue obligations on the security of student loans, the payment of interest or principal of which has at any time been 20 USC 1078, guaranteed under section 428 or 429 of this part, to the Federal 10T9. Financing Bank.". 20 USC 1087-2. (e)(1) Section 439 of the Act is amended by adding at the end thereof the following new subsections: Loans. "(o)(l)(A) The Association or its designated agent may, upon request of a borrower who has received loans under this title from two or more programs or lenders, or has received any other federally insured or guaranteed student loan, and where the borrower's aggregate outstanding indebtedness is in excess of $5,000, or where the borrower's aggregate outstanding indebtedness is in excess of $7,500 from a single lender under this part, make, notwithstanding any other provision of this part limiting the maximum insured principal amount for all insured loans made to a borrower, a new loan to the borrower in an amount equal to the unpaid principal and accrued unpaid interest on the old loans. The proceeds of the new loan shall be used to discharge the liability on such old loans. "(B) The Association in making loans pursuant to this subsection in any State served by a State agency or nonprofit private institution or organization with which the Secretary heis an agreement under section 4280b) or an eligible lender in a State described in section 20 USC 1085. 435(g)(l)(D) or (F) may designate as its agent such agency, institution, organization, or lender to perform such functions as the Association determines appropriate. Any agreements made pursuant to this subparagraph shall be on such terms and conditions as agreed upon by the Association and such agency, institution, organization, or lender. "(2) Loans made pursuant to this subsection shall be insurable 20 USC 1079. either by the Secretary under section 429 with a certificate of comprehensive insurance coverage provided for under section 429(b)(l) or by a State or nonprofit private institution or organization with which the Secretary has an agreement under section 428(b), except that such State or nonprofit private institution or organization shall provide the Association with a certificate of comprehensive insurance coverage. The terms of loans made under this subsection shall be such as may be agreed upon by the borrower and the 20 USC 1077. Association and meet the requirements of section 427, except that (A) the ten-year maximum period referred to in section 427(a)(2)(B) may be extended to no more than twenty years, and (B) clause (ii) of section 427(a)(2)(B) shall not be applicable. "(3)(A) Notwithstanding any other provision of this part, the Association, with the agreement of the borrower, may establish such repayment terms as it determines will promote the objectives of this subsection including, but not limited to, the establishment of graduated, income sensitive repayment schedules. "(B) For any borrower who has received two or more loans under this part bearing interest at the rate of 9 per centum per annum on the unpaid principal balance of the loan and who requests a new loan under this subsection for the purpose of consolidation on a date after the date on which the Secretary has made a determination under Ante, p. 1419. section 427A(b), the rate of interest on such new loan shall not exceed 8 per centum per annum on the unpaid principgil balance of such new loan.
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