42 USC § 297e - Distribution of assets from loan funds

(a) Capital distribution of balance of loan fund

If a school terminates a loan fund established under an agreement pursuant to section 297a (b) of this title, or if the Secretary for good cause terminates the agreement with the school, there shall be a capital distribution as follows:

(1) The Secretary shall first be paid an amount which bears the same ratio to such balance in such fund on the date of termination of the fund as the total amount of the Federal capital contributions to such fund by the Secretary pursuant to section 297a (b)(2)(A) of this title bears to the total amount in such fund derived from such Federal capital contributions and from funds deposited therein pursuant to section 297a (b)(2)(B) of this title.

(2) The remainder of such balance shall be paid to the school.

(b) Payment of principal or interest on loans

If a capital distribution is made under subsection (a) of this section, the school involved shall, after such capital distribution, pay to the Secretary, not less often than quarterly, the same proportionate share of amounts received by the school in payment of principal or interest on loans made from the loan fund established under section 297a (b) of this title as determined by the Secretary under subsection (a) of this section.

(c) Payment of balance of loan fund

(1) Within 90 days after the termination of any agreement with a school under section 297a of this title or the termination in any other manner of a school’s participation in the loan program under this part, ^[1] such school shall pay to the Secretary from the balance of the loan fund of such school established under section 297a of this title, an amount which bears the same ratio to the balance in such fund on the date of such termination as the total amount of the Federal capital contributions to such fund by the Secretary pursuant to section 297a (b)(2)(A) of this title bears to the total amount in such fund on such date derived from such Federal capital contributions and from funds deposited in the fund pursuant to section 297a (b)(2)(B) of this title. The remainder of such balance shall be paid to the school.

(2) A school to which paragraph (1) applies shall pay to the Secretary after the date on which payment is made under such paragraph and not less than quarterly, the same proportionate share of amounts received by the school after the date of termination referred to in paragraph (1) in payment of principal or interest on loans made from the loan fund as was determined for the Secretary under such paragraph.

---

[1]  See References in Text note below.

Source

(July 1, 1944, ch. 373, title VIII, § 839, formerly § 826, as added Pub. L. 88–581, § 2,Sept. 4, 1964, 78 Stat. 916; amended Pub. L. 89–751, § 6(d),Nov. 3, 1966, 80 Stat. 1235; Pub. L. 90–490, title II, § 222(f),Aug. 16, 1968, 82 Stat. 785; Pub. L. 92–52, § 3(b),July 9, 1971, 85 Stat. 145; Pub. L. 92–158, § 6(d)(1),Nov. 18, 1971, 85 Stat. 478; renumbered § 839 and amended Pub. L. 94–63, title IX, §§ 936(d), 941(h)(1), (2), (4)(B), (i)(1), (5),July 29, 1975, 89 Stat. 363, 365, 366; Pub. L. 96–32, § 7(j),July 10, 1979, 93 Stat. 84; Pub. L. 96–76, title I, § 109(c),Sept. 29, 1979, 93 Stat. 580; Pub. L. 97–35, title XXVII, § 2757(d),Aug. 13, 1981, 95 Stat. 931; Pub. L. 99–92, § 8(f),Aug. 16, 1985, 99 Stat. 399; Pub. L. 100–607, title VII, § 713(i),Nov. 4, 1988, 102 Stat. 3161; Pub. L. 102–408, title II, § 208(b),Oct. 13, 1992, 106 Stat. 2075; Pub. L. 105–392, title I, § 133(e),Nov. 13, 1998, 112 Stat. 3577; Pub. L. 111–148, title V, § 5310(b)(5),Mar. 23, 2010, 124 Stat. 631.)

References in Text

This part, referred to in subsec. (c)(1), was in the original “this subpart” and was translated to reflect the probable intent of Congress and the redesignation of subpart II of part B of this subchapter as part E of this subchapter by Pub. L. 105–392, title I, § 123(2),Nov. 13, 1998, 112 Stat. 3562.

Amendments

2010—Pub. L. 111–148made technical amendment to section and subsec. (a) designations resulting in no change in text.

1998—Subsec. (a). Pub. L. 105–392, § 133(e)(1)(A), added introductory provisions and struck out former introductory provisions which read as follows: “After September 30, 1996, and not later than December 31, 1999, there shall be a capital distribution of the balance of the loan fund established under an agreement pursuant to section 297a of this title by each school as follows:”.

Subsec. (a)(1). Pub. L. 105–392, § 133(e)(1)(B), substituted “on the date of termination of the fund” for “at the close of September 30, 1999,”.

Subsec. (b). Pub. L. 105–392, § 133(e)(2), amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “After December 31, 1999, each school with which the Secretary has made an agreement under this subpart shall pay to the Secretary, not less often than quarterly, the same proportionate share of amounts received by the school after September 30, 1999, in payment of principal or interest on loans made from the loan fund established pursuant to such agreement as was determined for the Secretary under subsection (a) of this section.”

1992—Subsec. (a). Pub. L. 102–408, § 208(b)(2), substituted “1999” for “1994” in introductory provisions and in par. (1).

Pub. L. 102–408, § 208(b)(1), substituted “1996” for “1991” in introductory provisions.

Subsec. (b). Pub. L. 102–408, § 208(b)(2), substituted “1999” for “1994” in two places.

1988—Subsec. (a). Pub. L. 100–607, § 713(i)(1)(A), which directed substitution of “1994” for “1991” in text preceding par. (1), was executed by making the substitution for “1991” the second time appearing to reflect the probable intent of Congress.

Subsec. (a)(1). Pub. L. 100–607, § 713(i)(1)(B), substituted “1994” for “1991”.

Subsec. (b). Pub. L. 100–607, § 713(i)(2), substituted “1994” for “1991” in two places.

1985—Subsecs. (a), (b). Pub. L. 99–92, § 8(f)(1), substituted “1991” for “1987” wherever appearing.

Subsec. (c). Pub. L. 99–92, § 8(f)(2), added subsec. (c).

1981—Pub. L. 97–35substituted “1987” for “1983” wherever appearing.

1979—Subsec. (a). Pub. L. 96–76, § 109(c)(1), substituted “September 30, 1983, and not later than December 31, 1983” for “September 30, 1980, and not later than December 31, 1981”. Prior to amendment, subsec. (a) referred to “December 31, 1980” rather than to “December 31, 1981” as cited in directory language of Pub. L. 96–76. See below for explanation of amendment by Pub. L. 96–32.

Pub. L. 96–32substituted “December 31, 1980” for “September 30, 1977”.

Subsec. (a)(1). Pub. L. 96–76, § 109(c)(2), substituted “1983” for “1980”.

Subsec. (b). Pub. L. 96–76, § 109(c)(3), substituted “1983” for “1980” wherever appearing.

1975—Subsec. (a). Pub. L. 94–63, §§ 936(d), 941(h)(2), (i)(5), substituted “September 30, 1980” for “June 30, 1977” wherever appearing, struck out “of Health, Education, and Welfare” after “Secretary”, and substituted references to section 835 of the Act for references to section 822, which had previously been translated as section 297a of this title, requiring no further translations in text as a result of renumbering of the Public Health Service Act.

Subsec. (b). Pub. L. 94–63, §§ 936(d), 941(h)(1), (4)(B), substituted “subpart” for “part”, “September 30, 1980” for “June 30, 1977”, and “December 31, 1980” for “September 30, 1977” and struck out provisions relating to payments from revolving fund established by section 297f (d) of this title.

1971—Pub. L. 92–158substituted “1977” for “1975” wherever appearing.

Pub. L. 92–52substituted “1975” for “1974” wherever appearing.

1968—Pub. L. 90–490substituted “1974” for “1972” wherever appearing.

1966—Subsec. (a). Pub. L. 89–751, § 6(d)(1), (2), substituted “an agreement pursuant to section 297a (b) of this title” for “this part” in opening provisions, and in par. (1) substituted “such balance” for “the balance”.

Subsec. (b). Pub. L. 89–751, § 6(d)(3), inserted “(other than so much of such fund as relates to payments from the revolving fund established by section 297f (d) of this title)”.

Effective Date of 1985 Amendment

Amendment by Pub. L. 99–92effective Oct. 1, 1985, see section 10(a) ofPub. L. 99–92, set out as a note under section 297a of this title.

Effective Date of 1975 Amendment

Amendment by section 936(d) ofPub. L. 94–63effective July 1, 1975, see section 905 ofPub. L. 94–63, set out as a note under section 297a of this title.

Amendment by section 941(h)(1), (2), (4)(B), (i)(1), (5) ofPub. L. 94–63effective July 1, 1975, see section 942 ofPub. L. 94–63, set out as a note under section 297a of this title.

Effective Date of 1966 Amendment

Amendment by Pub. L. 89–751effective in the case of payments to student loan funds made after Nov. 3, 1966, except in the case of payments pursuant to commitments (made prior to Nov. 3, 1966) to make loans under section 297f of this title as in effect prior to Nov. 3, 1966, see section 6(e)(1) ofPub. L. 89–751, set out as a note under section 297d of this title.