Pub. L. 93-508, tit. III, sec. 301

Sec. 301. (a) Chapter 36 of title 38, United States Code, is amended by adding at the end thereof the following new subchapter: “Subchapter III—Education Loans to Eligible Veterans and Eligible Persons “§ 1798. Eligibility for loans; amount and conditions of loans; interest rate on loans “(a) Each eligible veteran and eligible person shall be entitled to a loan under this subchapter in an amount determined under, and subject to the conditions specified in. subsection (b)(1) of this section if the veteran or person satisfies the requirements set forth in subsection (c) of this section. “(b)(1) Subject to paragraph (3) of this subsection, the amount of the loan to which an eligible veteran or eligible person shall be entitled under this subchapter for any academic year shall be equal to the amount needed by such veteran or person to pursue a program of education at the institution at which he is enrolled, as determined under paragraph (2) of this subsection. “(2) (A) The amount needed by a veteran or person to pursue a program of education at an institution for any academic year shall be determined by subtracting (i) the total amount of financial resources (as defined in subparagraph (B) of this paragraph) available to the veteran or person which may be reasonably expected to be expended by such veteran or person for educational purposes in any year from (ii) the actual cost of attendance (as defined in subparagraph (C) of this paragraph) at the institution in which such veteran or person is enrolled. “(B) The term ‘total amount of financial resources’ of any veteran or person for any year means the total of the following: “(i) The annual adjusted effective income of the veteran or person less Federal income tax paid or payable by such veteran or person with respect to such income. “(ii) The amount of cash assets of the veteran or person. “(iii) The amount of financial assistance received by the veteran or person under the provisions of title IV of the Higher Education Act of 1965, as amended. “(iv) Educational assistance received by the veteran or person under this title other than under this subchapter. “(v) Financial assistance received by the veteran or person under any scholarship or grant program other than those specified in clauses (iii) and (iv). “(C) The term ‘actual cost of attendance’ means, subject to such regulations as the Administrator may provide, the actual per-student 88 Stat. 1590charges for tuition, fees, room and board (or expenses related to reasonable commuting), books, arid an allowance for such other expenses as the Administrator determines by regulation to be reasonably related to attendance at the institution at which the veteran or person is enrolled. “(3) The aggregate of the amounts any veteran or person may borrow under this subchapter may not exceed $270 multiplied by the number of months such veteran or person is entitled to receive educational assistance under section 1661 or subchapter II of chapter 35, respectively, of this title, but not in excess of $600 in any one regular academic year. “(c) An eligible veteran or person shall be entitled to a loan under' this subchapter if such veteran or person— “(1) is in attendance at an educational institution on at least a half-time basis and (A) is enrolled in a course leading to a standard college degree, or (B) is enrolled in a course, the completion of which requires six months or longer, leading to an identified and predetermined professional or vocational objective; “(2) has sought and is unable to obtain a loan, in the full amount needed by such veteran or person, as determined under subsection (b) of this section, under a student loan program insured pursuant to the provisions of part B of title IV of the Higher Education Act of 1965, as amended, or any successor authority; and “(3) enters into an agreement with the Administrator meeting the requirements of subsection (d) of this section. No loan shall be made under this subchapter to an eligible veteran or person pursuing a program of correspondence, flight, apprentice or other on-job, or PREP training. “(d) Any agreement between the Administrator and a veteran or person under this subchapter— “(1) shall include a note or other written obligation which provides for repayment to the Administrator of the principal amount of, and payment of interest on, the loan in installments over a period beginning nine months after the date on which the borrower ceases to be at least a half-time student and ending ten years and nine months after such date; “(2) shall include provision for acceleration of repayment of all or any part of the loan, without penalty, at the option of the borrower; “(3) shall provide that the loan shall bear interest, on the unpaid balance of the loan, at a rate prescribed by the Administrator, with the concurrence of the Secretary of the Treasury, but at a rate not less than a rate determined by the Secretary, taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the maturity of loans made under this subchapter, except that no interest shall accrue prior to the beginning date of repayment; and “(4) shall provide that the loan shall be made without security and without endorsement. “(e)(1) Except as provided in paragraph (2) of this subsection, whenever the Administrator determines that a default has occurred on any loan made under this subchapter, he shall declare an overpayment, and such overpayment shall be recovered from the veteran or person concerned in the same manner as any other debt due the United States. “(2) If a veteran or person who has received a loan under this section dies or becomes permanently and totally disabled, then the Administrator shall discharge the veteran’s or person’s liability on such loan by repaying the amount owed on such loan. 88 Stat. 1591 “(3) The Administrator shall submit to the Committees on Veterans’ Affairs of the Senate and the House of Representatives, not later than one year after the date of enactment of the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 and annually thereafter, a separate report specifying the default experience and default rate at each educational institution along with a comparison of the collective default experience and default rate at all such institutions. “§ 1799. Revolving fund; insurance “(a) There is hereby established in the Treasury of the United States a revolving fund to be known as the ‘Veterans’ Administration Education Loan Fund’ (hereinafter in this section referred to as the ‘Fund’). “(b) The Fund shall be available to the Administrator, without fiscal year limitation, for the making of loans under this subchapter. “(c) There shall be deposited in the Fund (1) by transfer from current and future appropriations for readjustment benefits such amounts as may be necessary to establish and supplement the Fund in order to meet the requirements of the Fund, and (2) all collections of fees and principal and interest (including overpayments declared under section 1798(e) of this title) on loans made under this subchapter. “(d) The Administrator shall determine annually whether there has developed in the Fund a surplus which, in his judgment, is more than necessary to meet the needs of the Fund, and such surplus, if any, shall be deemed to have been appropriated for readjustment benefits. “(e) A fee shall be collected from each veteran or person obtaining a loan made under this subchapter for the purpose of insuring against defaults on loans made under this subchapter; and no loan shall be made under this subchapter until the fee payable with respect to such loan has been collected and remitted to the Administrator. The amount of the fee shall be established from time to time by the Administrator, but shall in no event exceed 3 per centum of the total loan amount. The amount of the fee may be included in the loan to the veteran or person and paid from the proceeds thereof.”. (b) The table of sections at the beginning of such chapter is amended by adding at the end thereof “subchapter iii—education loans to eligible veterans and eligible persons “1798. Eligibility for loans; amount and conditions of loans; interest rate on loans. “1799. Revolving fund; insurance.”.