authorizing deferment of repayment of non-federally insured loans during military, vista, or peace corps service, or attendance at eligible institution; federal payment of interest accruing during such attendance or service

authorizing deferment of repayment of non-federally insured loans during military, vista, or peace corps service, or attendance at eligible institution; federal payment of interest accruing during such attendance or service Sec. 117. (a) (1) Section 428 of the Higher Education Act of 1965 (as amended by this Act) is amended by adding at the end of such section the following new subsection; “(e) The Commissioner shall encourage the inclusion, in any State student loan program or any State or nonprofit private student Loan insurance program meeting the requirements of subsection (a) (1) (B) or (a) (1) (C), of provisions authorizing or requiring that in the case of student loans covered by such program periodic installments of principal need not be paid, but interest shall accrue and be paid, during any period (1) during which the borrower is pursuing a full-time course of study at an eligible institution, (2) not in excess of three years during which the borrower is a member of the Armed Forces of 82 Stat. 1026the United States, (3) not in excess of three years during which the borrower is in service as a volunteer under the Peace Corps Act, or (4) not in excess of three years during which the borrower is in service as a full-time volunteer under title VIII of the Economic Opportunity Act of 1964, In the case of any such St ate or nonprofit private program containing such a provision any such period shall be excluded in determining the period specified in subsection (b) (1) (C) (ii), or the maximum period for repayment specified in subsection (b)(1)(D).” (2) (A) Section 428(b) (1) (C) (ii) of the Higher Education Act of 1965 is amended by inserting after “(ii)” the following: “except as provided in subsection (e) of this section,”. (B) Section 428(b)(1)(D) of such Act is amended by inserting after “subject to subparagraph (C)” the following: “of this paragraph and except as provided by subsection (e) of this section”. (b) The first sentence of section 428(a) (2) of such Ac! is amended by inserting before “; but such portion” the following: “, or which accrues during a period in which principal need not be paid (whether or not such principal is in fact paid) by reason of a provision described in subsection (e) of this section or in section 427(a) (2) (C)”. (c) Section 427(a) (2) (C) (iv) of such Act is amended by inserting “full-time” before “volunteer”. (d) Deferment of repayment of principal, as provided in the amendments made by subsection (a) of this section, may be authorized (but not required) with respect to loans meeting the requirements of subparagraph (B) or (C) of section 428(a) (1) of the Higher Education Act of 1965 which are outstanding on the sixtieth day after the date of enactment of this Act, but only with respect to periods of attendance or service occurring on or after such sixtieth day. The amendments made by subsection (b) shall become effective on the sixtieth day after the date of enactment of this Act.