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[1] See References in Text note below.
[2] See References in Text note below.
§ 1092a. Combined payment plan
(a)
Eligibility for plan
Upon the request of the borrower, a lender described in subparagraph (A), (B), or (C) of section
1078–3
(a)(1) of this title, or defined in subpart I [1] of part C of title VII of the Public Health Service Act may, with respect to a consolidation loan made under section
1078–3 of this title (and section
1087–2
(o) of this title as in effect prior to the enactment of section
1078–3 of this title) and loans guaranteed under subpart I [1] of part C of title VII of the Public Health Service Act (known as Health Education Assistance Loans), offer a combined payment plan under which the lender shall submit one bill to the borrower for the repayment of all such loans for the monthly or other similar period of repayment.
(b)
Applicability of other requirements
A lender offering a combined payment plan shall comply with all provisions of section
1078–3 of this title applicable to loans consolidated or to be consolidated and shall comply with all provisions of subpart I [1] of part C of title VII of the Public Health Service Act applicable to loans under that subpart 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
1078–3
(b)(1)(A) of this title 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—
(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
(B)
that each such loan was made and serviced in compliance with applicable laws and regulations; and
(2)
the loan being reissued was not in default (as defined in section 733(e)(3) [2] of the Public Health Service Act) at the time the request for a combined payment plan is made.
(f)
Notes and insurance certificates
(1)
Each loan reissued under subsection (e) of this section 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 [2] of part C of title VII of the Public Health Service Act (including the Student Loan 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) [2] of the Public Health Service Act. Notwithstanding the provisions of section 729(a) [2] of the Public Health Service Act, the reissued loan shall 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.
(2)
Except as otherwise specifically provided for under the provisions of this section, the terms of any reissued loan shall be the same as the terms of the original loan. The maximum repayment period for a loan reissued under this section shall not exceed the remainder of the period which would have been permitted on the original loan. If the lender holds more than one loan insured under subpart I [2] of part C of title VII of the Public Health Service Act, the maximum repayment period for all such loans may extend to the latest date permitted for any individual loan. Any reissued loan may be consolidated with any other Health Education Assistance Loan as provided in the Public Health Service Act [42 U.S.C. 201 et seq.], and, with the concurrence of the borrower, repayment of any such loans during any period may be made in amounts that are less than the interest that accrues on such loans during that period.
(g)
Termination of borrower eligibility
The status of an individual as an eligible combined payment plan borrower terminates upon receipt of a combined payment plan.
(h)
Fees and premiums
No origination fee or insurance premium shall be charged to the borrower on any combined payment plan, and no origination fee or insurance premium shall be payable by the lender to the Secretary of Health and Human Services.
(i)
Commencement of repayment
Repayment of a combined payment plan shall commence within 60 days after the later of the date of acceptance of the lender’s offer to administer a combined payment plan, the making of the consolidation loan or the reissuance of any Health Education Assistance Loans pursuant to subsection (e) of this section.
[1] See References in Text note below.
[2] See References in Text note below.
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