default reduction activities

(8) Definitions For the purposes of this subsection: (A) Default reduction activities The term “default reduction activities” means activities to reduce student loan defaults that improve, strengthen, and expand default prevention activities, such as— (i) establishing a program of partial loan cancellation to reward disadvantaged borrowers for good repayment histories with their lenders; (ii) establishing a financial and debt management counseling program for high-risk borrowers that provides long-term training (beginning prior to the first disbursement of the borrower’s first student loan and continuing through the completion of the borrower’s program of education or training) in budgeting and other aspects of financial management, including debt management; (iii) establishing a program of placement counseling to assist high-risk borrowers in identifying employment or additional training opportunities; and (iv) developing public service announcements that would detail consequences of student loan default and provide information regarding a toll-free telephone number established by the guaranty agency for use by borrowers seeking assistance in avoiding default. (B) Reserve funds The term “reserve funds” when used with respect to a guaranty agency— (i) includes any reserve funds in cash or liquid assets held by the guaranty agency, or held by, or under the control of, any other entity; and (ii) does not include buildings, equipment, or other nonliquid assets.


20 USC § 1072(h)(8)

Scoping language

For the purposes of this subsection
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