INTERNSHIP DEFERMENTS AND FORBEARANCE.

SEC. 2002. INTERNSHIP DEFERMENTS AND FORBEARANCE. (a) Determents.— (1) Federally insured student loans.—Section 427(a)(2)(C)(i) of the Higher Education Act of 1965 (20 U.S.C. 1077(a)(2)(C)(i)) is amended by inserting before the semicolon at the end thereof the following: “, except that no borrower shall be eligible for a deferment under this clause, or a loan made under this part (other than a loan made under 428B or 4280, while serving in a medical internship or residency program”. (2) Federal payments to reduce student interest costs.—Section 428(b)(1)(M)(i) of such Act (20 U.S.C. 1078(b)(1)(M)(i)) is amended by inserting before the semicolon at the end thereof the following: “, except that no borrower shall be eligible for a deferment under this clause, or loan made under this part (other than a loan made under 428B or 4280, while serving in a medical internship or residency program”. (3) Loan agreements.—Section 464(c)(2)(A)(i) of such Act (20 U.S.C. 1087dd(c)(2)(A)(i)) is amended by inserting before the semicolon at the end thereof the following: “, except that no borrower shall be eligible for a deferment under this clause, or a loan made under this part (other than a loan made under 428B or 428C), while serving in a medical internship or residency program”. (4) Effective date.—The amendments made by this subsection shall apply to any loan made, insured, or guaranteed under part B or part E of title IV of the Higher Education Act of 1965, including a loan made before the enactment of this Act, and shall take effect on January 1, 1990, except that such amendments shall not apply with respect to any portion of a period of deferment granted to a borrower under section 427(a)(2)(C)(i), 428(b)(1)(M)(i), or 464(c)(2)(A)(i) of the Higher Education Act of 1965 for service in a medical internship or residency program that is completed prior to the effective date of this section. (b) Forbearance.— (1) Federal payments to reduce student interest costs.— Section 428 of the Higher Education Act of 1965 (20 U.S.C. 1078) is amended— (A) in subsection (b)(1)— (i) in subparagraph (D, by striking “and” at the end thereof; (ii) in subparagraph (U), by striking the period at the end thereof and inserting “; and”; and (iii) by adding at the end thereof the following new subparagraph: 103 STAT. 2112 “(V)(i) provides that, upon written request, a lender shall grant a borrower forbearance, renewable at 12-month intervals for a period equal to the length of time remaining in the borrower’s medical or dental internship or residency program, on such terms as are otherwise consistent with the regulations of the Secretary and agreed upon in writing by the parties to the loan, with the approval of the insurer, if the borrower— “(I) is serving in a medical or dental internship or residency program, the successful completion of which is required to begin professional practice or service, or is serving in a medical or dental internship or residency program leading to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility that offers postgraduate training; and “(II) has exhausted his or her eligibility for a deferment under section 427(a)(2)(C)(vii) or subparagraph (M)(vii) of this paragraph; and “(ii) provides that no administrative or other fee may be charged in connection with the granting of a forbearance under clause (i), and that no adverse information regarding a borrower may be reported to a credit bureau organization solely because of the granting of a forbearance under clause (i).”; and (B) by amending subsection (c)(3) to read as follows: “(3) Forbearance.—A guaranty agreement under this subsection— “(A) shall contain provisions providing for forbearance in accordance with subsection (b)(1)(V) for the benefit of the student borrower serving in a medical or dental internship or residency program; and “(B) may, to the extent provided in regulations of the Secretary, contain provisions that permit such forbearance for the benefit of the student borrower as may be agreed upon by the parties to an insured loan and approved by the insurer. Such regulations shall not preclude guaranty agencies from permitting the parties to such a loan from entering into a forbearance agreement solely because the loan is in default.”. (2) Effective date.—The amendments made by this subsection shall apply with respect to loans made before, on, or after the date of enactment of this Act.