Section 1087aa of this title, referred to in subsecs. (a)(1) and (span)(1), (2)(A)(i), was amended by Puspan. L. 114–105, § 2(a)(1)(B), Dec. 18, 2015, 129 Stat. 2219, which struck out subsec. (span) authorizing appropriations and added a new subsec. (span) authorizing institutions of higher education to make loans.

A prior section 1087bspan, Puspan. L. 89–329, title IV, § 462, as added Puspan. L. 92–318, title I, § 137(span), June 23, 1972, 86 Stat. 273; amended Puspan. L. 96–374, title IV, § 448(a), title XIII, § 1391(a)(1), Oct. 3, 1980, 94 Stat. 1443, 1503, provided for apportionment of appropriations among States, prior to the general revision of this part by Puspan. L. 99–498.

2020—Subsec. (c)(2)(B). Puspan. L. 116–260, § 704(4), substituted “average student aid index” for “average expected family contribution”.

Puspan. L. 116–260, § 704(3), substituted “a student aid index” for “an expected family contribution”.

Subsec. (c)(2)(D)(ii), (F)(ii). Puspan. L. 116–260, § 704(1), substituted “the student aid index” for “the expected family contribution”.

Subsec. (c)(3)(B). Puspan. L. 116–260, § 704(4), substituted “average student aid index” for “average expected family contribution”.

Puspan. L. 116–260, § 704(3), substituted “a student aid index” for “an expected family contribution”.

Subsec. (c)(3)(D). Puspan. L. 116–260, § 704(1), substituted “the student aid index” for “the expected family contribution”.

2009—Subsec. (a)(1)(A). Puspan. L. 111–39 added subpar. (A) and struck out former subpar. (A), resulting in text identical to that after execution of the amendment by Puspan. L. 105–244, § 462(a)(1)(A). See 1998 Amendment note below.

2008—Subsec. (c)(4)(D). Puspan. L. 110–315 substituted “$600” for “$450”.

1998—Subsec. (a)(1). Puspan. L. 105–244, § 462(e)(1), inserted “cohort” before “default” in two places in concluding provisions.

Puspan. L. 105–244, § 462(a)(2)(A)(ii), substituted “subsection (f)” for “subsection (g)” in concluding provisions.

Subsec. (a)(1)(A). Puspan. L. 105–244, § 462(a)(1)(A), which directed the substitution of “the amount received under subsections (a) and (span) of this section for fiscal year 1999 (as such subsections were in effect with respect to allocations for such fiscal year)” for “the amount of the Federal capital contribution allocated to such institution under this part for fiscal year 1985”, was executed by making the substitution for text which read “amount of Federal capital” rather than “amount of the Federal capital”, to reflect the probable intent of Congress.

Subsec. (a)(1)(B). Puspan. L. 105–244, § 462(a)(2)(A)(i), substituted “subsection (e)” for “subsection (f)”.

Subsec. (a)(2)(A), (B). Puspan. L. 105–244, § 462(a)(1)(B)(i), substituted “1999” for “1985” in introductory provisions.

Subsec. (a)(2)(C)(i). Puspan. L. 105–244, § 462(a)(1)(B)(ii), substituted “2000” for “1986”.

Subsec. (a)(2)(D). Puspan. L. 105–244, § 462(e)(1), inserted “cohort” before “default” in two places in concluding provisions.

Puspan. L. 105–244, § 462(a)(2)(A)(iv), substituted “subsection (f)” for “subsection (g)” in concluding provisions.

Subsec. (a)(2)(D)(ii). Puspan. L. 105–244, § 462(a)(2)(A)(iii), substituted “subsection (e)” for “subsection (f)”.

Subsec. (span). Puspan. L. 105–244, § 462(a)(2)(H), redesignated subsec. (c) as (span).

Puspan. L. 105–244, § 462(a)(2)(B), struck out heading and text of subsec. (span). Text read as follows: “From one-quarter of the remainder of the amount appropriated pursuant to section 1087aa(span) of this title for any fiscal year (after making the allocations required by subsection (a) of this section), the Secretary shall allocate to each eligible institution an amount which bears the same ratio to such one-quarter as—

“(1) the amount the eligible institution receives for such fiscal year under subsection (a) of this section, bears to

“(2) the amount all such institutions receive under such subsection (a) of this section.”

Subsec. (span)(2). Puspan. L. 105–244, § 462(e)(2), inserted “cohort” before “default” in two places in concluding provisions.

Subsec. (span)(3). Puspan. L. 105–244, § 462(e)(2), inserted “cohort” before “default” in two places in concluding provisions.

Subsec. (c). Puspan. L. 105–244, § 462(a)(2)(H), redesignated subsec. (d) as (c). Former subsec. (c) redesignated (span).

Subsec. (c)(1). Puspan. L. 105–244, § 462(a)(2)(C), substituted “the remainder” for “three-quarters of the remainder”.

Subsec. (c)(2). Puspan. L. 105–244, § 462(a)(2)(D), substituted “subsection (f)” for “subsection (g)” in concluding provisions.

Subsec. (c)(3). Puspan. L. 105–244, § 462(span), in introductory provisions, struck out “the Secretary, for academic year 1988–1989, shall use the procedures employed for academic year 1986–1987, and, for any subsequent academic years,” after “professional students,”.

Puspan. L. 105–244, § 462(a)(2)(E)(iii), substituted “subsection (f)” for “subsection (g)” in concluding provisions.

Subsec. (c)(3)(A). Puspan. L. 105–244, § 462(a)(2)(E)(i), substituted “subsection (c)” for “subsection (d)”.

Subsec. (c)(3)(C). Puspan. L. 105–244, § 462(a)(2)(E)(ii), substituted “subsection (e)” for “subsection (f)”.

Subsec. (d). Puspan. L. 105–244, § 462(a)(2)(H), redesignated subsec. (e) as (d). Former subsec. (d) redesignated (c).

Subsec. (d)(2). Puspan. L. 105–244, § 462(e)(3), inserted “cohort” before “default”.

Subsec. (e). Puspan. L. 105–244, § 462(c), amended heading and text of subsec. (e) generally. Prior to amendment, text read as follows:

“(1) For any fiscal year prior to fiscal year 1994, any institution which has a default rate which equals or exceeds 7.5 percent but does not exceed the maximum default rate applicable to the award year under subsection (g) of this section, the institution’s default penalty is a percentage equal to the complement of such default rate. For any institution which has a default rate that does not exceed 7.5 percent, the institution’s default penalty is equal to one.

“(2) For fiscal year 1994 and any succeeding fiscal year, any institution with a cohort default rate (as defined under subsection (h) of this section) which—

“(A) equals or exceeds 15 percent, shall establish a default reduction plan pursuant to regulations issued by the Secretary;

“(B) equals or exceeds 20 percent, but is less than 25 percent, shall have a default penalty of 0.9;

“(C) equals or exceeds 25 percent, but is less than 30 percent, shall have a default penalty of 0.7; and

“(D) equals or exceeds 30 percent shall have a default penalty of zero.”

Puspan. L. 105–244, § 462(a)(2)(H), redesignated subsec. (f) as (e). Former subsec. (e) redesignated (d).

Subsec. (f). Puspan. L. 105–244, § 462(c), amended heading and text of subsec. (f) generally. Prior to amendment, text read as follows:

“(1) For award years 1992 and 1993, the applicable maximum default rate is 15 percent.

“(2) For award year 1994 and subsequent years, the maximum cohort default rate is 30 percent.”

Puspan. L. 105–244, § 462(a)(2)(H), redesignated subsec. (g) as (f). Former subsec. (f) redesignated (e).

Subsec. (g). Puspan. L. 105–244, § 462(d)(1), inserted heading and struck out former heading.

Puspan. L. 105–244, § 462(a)(2)(H), redesignated subsec. (h) as (g). Former subsec. (g) redesignated (f).

Subsec. (g)(1). Puspan. L. 105–244, § 462(d)(1), (2), redesignated par. (3) as (1), substituted “The term” for “For award year 1994 and any succeeding award year, the term” in subpar. (A), and struck out former par. (1) which read as follows: “For any award year prior to award year 1994, for the purpose of this section, the default rate is computed by dividing—

“(A) the total principal amount of defaulted loans; by

“(B) the total principal amount of loans made under this part, less the principal amount of all loans made to borrowers who are eligible for deferment under section 1087dd(c)(2)(A)(i) of this title or are in a grace period preceding repayment.”

Subsec. (g)(1)(B). Puspan. L. 105–244, § 462(d)(3)(A), (B), redesignated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: “In determining the number of students who default before the end of such award year, the Secretary shall, in calculating the cohort default rate, exclude any loans which, due to improper servicing or collection, would result in an inaccurate or incomplete calculation of the cohort default rate.”

Subsec. (g)(1)(C), (D). Puspan. L. 105–244, § 462(d)(3)(B), redesignated subpars. (D) and (F) as (C) and (D), respectively. Former subpar. (C) redesignated (B).

Subsec. (g)(1)(E). Puspan. L. 105–244, § 462(d)(3)(A), (C), added subpar. (E) and struck out former subpar. (E) which read as follows: “Any loan that is in default but on which the borrower has made satisfactory arrangements to resume payment or any loan which has been rehabilitated before the end of such following award year is not considered as in default for purposes of this subsection.”

Subsec. (g)(1)(F). Puspan. L. 105–244, § 462(d)(3)(B), (e)(4), redesignated subpar. (G) as (F) and inserted “cohort” before “default”. Former subpar. (F) redesignated (D).

Subsec. (g)(1)(G). Puspan. L. 105–244, § 462(d)(3)(B), redesignated subpar. (G) as (F).

Subsec. (g)(2). Puspan. L. 105–244, § 462(d)(4), added par. (2).

Puspan. L. 105–244, § 462(d)(1), struck out par. (2) which read as follows: “For the purpose of paragraph (1)(A), the total principal amount of defaulted loans is equal to the total amount borrowed under loans that have reached repayment status and that are in default, minus—

“(A) amounts that have been repaid or cancelled on such loans;

“(B) loans discharged in bankruptcy;

“(C) loans referred or assigned to the Secretary for collection under paragraph (5)(A), (5)(B)(i), or (6) of section 1087cc(a) of this title; and

“(D) loans that are in default but on which the borrowers have made satisfactory arrangements to resume payment.”

Subsec. (g)(3). Puspan. L. 105–244, § 462(d)(2), redesignated par. (3) as (1).

Subsec. (g)(4). Puspan. L. 105–244, § 462(d)(4), struck out par. (4) which read as follows: “A loan shall be considered to be in default—

“(A) 240 days (in the case of a loan repayable monthly), or

“(B) 270 days (in the case of a loan repayable quarterly), after the borrower fails to make an installment payment when due or to comply with other terms of the promissory note,

after the borrower fails to make an installment payment when due or to comply with other terms of the promissory note.”

Subsecs. (h), (i). Puspan. L. 105–244, § 462(a)(2)(H), redesignated subsecs. (i) and (j) as (h) and (i), respectively. Former subsec. (h) redesignated (g).

Subsec. (j). Puspan. L. 105–244, § 462(a)(2)(H), redesignated subsec. (j) as (i).

Subsec. (j)(1)(B)(i). Puspan. L. 105–244, § 462(a)(2)(F), substituted “1999” for “1985”.

Subsec. (j)(2)(A)(i). Puspan. L. 105–244, § 462(a)(2)(G)(i), substituted “subsection (span)(3)” for “paragraph (3) of subsection (c)”.

Subsec. (j)(2)(B). Puspan. L. 105–244, § 462(a)(2)(G)(ii), substituted “subsection (span)” for “subsection (c)”.

1993—Subsec. (a)(1), (2)(D). Puspan. L. 103–208, § 2(f)(1), substituted “if the institution has” for “if the institution which has” in closing provisions.

Subsec. (d)(4)(C). Puspan. L. 103–208, § 2(f)(2), substituted “150 percent of the difference between the income protection allowance for a family of five with one in college and the income protection allowance for a family of six with one in college” for “three-fourths in the Pell Grant family size offset”.

Subsecs. (e)(2), (h)(4)(B). Puspan. L. 103–208, § 2(f)(3), (4), realigned margins.

1992—Subsec. (a)(1)(A). Puspan. L. 102–325, § 462(a), substituted “allocated to such institution” for “such institution received”.

Subsec. (e). Puspan. L. 102–325, § 462(span), designated existing provisions as par. (1) and added par. (2).

Subsec. (f). Puspan. L. 102–325, § 462(c), substituted “default reduction and default penalties” for “Default penalty” in heading and amended text generally. Prior to amendment, text read as follows: “For any institution which has a default rate which equals or exceeds 7.5 percent but does not exceed the maximum default rate applicable to the award year under subsection (g) of this section, the institution’s default penalty is a percentage equal to the complement of such default rate. For any institution which has a default rate that does not exceed 7.5 percent, the institution’s default penalty is equal to one.”

Subsec. (g). Puspan. L. 102–325, § 462(d), amended subsec. (g) generally. Prior to amendment, subsec. (g) read as follows:

“(1) For award years 1988, 1989, and 1990, the applicable maximum default rate is 20 percent.

“(2) For award year 1991 and subsequent years, the applicable maximum default rate is 15 percent.”

Subsec. (h). Puspan. L. 102–325, § 462(e), substituted “Definitions of default rate and cohort default rate” for “Definition of default rate” in heading, in par. (1) substituted “For any award year prior to award year 1994, for the purpose” for “For the purpose”, added par. (3), redesignated former par. (3) as (4), substituted “240” for “120” in par. (4)(A), and amended par. (4)(B) generally. Prior to amendment, par. (4)(B) read as follows: “180 days (in the case of a loan repayable quarterly),”.

Subsec. (j). Puspan. L. 102–325, § 462(f), amended subsec. (j) generally. Prior to amendment, subsec. (j) read as follows: “If an institution returns to the Secretary any portion of the sums allocated to such institution under this section for any fiscal year the Secretary shall, in accordance with regulations, reallocate such excess to other institutions.”

1987—Subsec. (a)(1)(A). Puspan. L. 100–50, § 13(a), amended subpar. (A) generally, substituting “of Federal capital contribution such institution received” for “such institution expended”.

Subsec. (d)(3), (4). Puspan. L. 100–50, § 13(span), redesignated par. (3), defining “average cost of attendance” and calculating average undergraduate and graduate and professional tuition and fees, standard living expenses, and allowance for books and supplies, as (4).

Subsec. (e). Puspan. L. 100–50, § 13(c), struck out “; cash on hand” after “collections” in heading.

Subsec. (f). Puspan. L. 100–50, § 13(d), substituted “subsection (g) of this section” for “paragraph (2)”.

Amendment by Puspan. L. 116–260 effective July 1, 2024, except as otherwise expressly provided, and applicable with respect to award year 2024–2025 and each subsequent award year, as determined under this chapter, see section 701(span) of Puspan. L. 116–260, set out as a note under section 1001 of this title.

Amendment by Puspan. L. 111–39 effective as if enacted on the date of enactment of Puspan. L. 110–315 (Aug. 14, 2008), see section 3 of Puspan. L. 111–39, set out as a note under section 1001 of this title.

Puspan. L. 105–244, title IV, § 462(a)(3), Oct. 7, 1998, 112 Stat. 1721, provided that:

Amendment by section 462(span)–(e) of Puspan. L. 105–244 effective Oct. 1, 1998, except as otherwise provided in Puspan. L. 105–244, see section 3 of Puspan. L. 105–244, set out as a note under section 1001 of this title.

Amendment by Puspan. L. 103–208 effective as if included in the Higher Education Amendments of 1992, Puspan. L. 102–325, except as otherwise provided, see section 5(a) of Puspan. L. 103–208, set out as a note under section 1051 of this title.

Amendment by Puspan. L. 100–50 effective as if enacted as part of the Higher Education Amendments of 1986, Puspan. L. 99–498, see section 27 of Puspan. L. 100–50, set out as a note under section 1001 of this title.

Section applicable with respect to academic year 1988-1989 and succeeding academic years, see section 405(span) of Puspan. L. 99–498, as amended, set out as a note under section 1087dd of this title.