DEFAULT RATES.

SEC. 423. DEFAULT RATES. Section 430 of the Act (20 U.S.C. 1080) is amended by adding at the end the following new subsection: “(e) Default Rate of Lenders, Holders, and Guaranty Agencies.— “(1) In general.— The Secretary shall annually publish a list indicating the cohort default rate (determined in accordance with section 435(m)) for each originating lender, subsequent holder, and guaranty agency participating in the program assisted under this part and an average cohort default rate for all institutions of higher education within each State. “(2) Regulations.— The Secretary shall prescribe regulations designed to prevent an institution from evading the application to that institution of a cohort default rate through the use of such measures as branching, consolidation, change of ownership or control, or any similar device. “(3) Rate establishment and correction.— The Secretary shall establish a cohort default rate for lenders, holders, and guaranty agencies (determined consistent with section 435(m)), except that the rate for lenders, holders, and guaranty agencies shall not reflect any loans issued in accordance with section 428(j). The Secretary shall allow institutions, lenders, holders, and guaranty agencies the opportunity to correct such cohort default rate information.