excess consolidation proceeds

(6) Secretary’s equitable share (A) For the purpose of paragraph (2)(D), the Secretary’s equitable share of payments made by the borrower shall be that portion of the payments remaining after the guaranty agency with which the Secretary has an agreement under this subsection has deducted from such payments— (i) a percentage amount equal to the complement of the reinsurance percentage in effect when payment under the guaranty agreement was made with respect to the loan; and (ii) an amount equal to 24 percent of such payments for use in accordance with section 1072b of this title , except that— (I) beginning October 1, 2003 and ending September 30, 2007 , this clause shall be applied by substituting “23 percent” for “24 percent”; and (II) beginning October 1, 2007 , this clause shall be applied by substituting “16 percent” for “24 percent”. (B) A guaranty agency shall— (i) on or after October 1, 2006 — (I) not charge the borrower collection costs in an amount in excess of 18.5 percent of the outstanding principal and interest of a defaulted loan that is paid off through consolidation by the borrower under this subchapter; and (II) remit to the Secretary a portion of the collection charge under subclause (I) equal to 8.5 percent of the outstanding principal and interest of such defaulted loan; and (ii) on and after October 1, 2009 , remit to the Secretary the entire amount charged under clause (i)(I) with respect to each defaulted loan that is paid off with excess consolidation proceeds. (C) For purposes of subparagraph (B), the term “excess consolidation proceeds” means, with respect to any guaranty agency for any Federal fiscal year beginning on or after October 1, 2009 , the proceeds of consolidation of defaulted loans under this subchapter that exceed 45 percent of the agency’s total collections on defaulted loans in such Federal fiscal year.

Source

20 USC § 1078(c)(6)


Scoping language

None identified, default scope is assumed to be the parent (part B) of this section.
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