REDUCTION IN LOAN FEES PAID BY STUDENTS.

SEC. 4102. REDUCTION IN LOAN FEES PAID BY STUDENTS. (a) Origination Fees.— Section 438 of the Act (20 U.S.C. 1087–1) is amended— (1) in the heading of subsection (c) by inserting “From Students” after “Origination Fees”; and (2) in subsection (c)— (A) in paragraph (2)— (i) by striking “428A 428B, 428C,” and inserting “428C”; and (ii) by striking “5 percent” and inserting “3.0 percent”; and (B) in paragraph (6), by striking “5 percent” and inserting “3.0 percent”. (b) Origination Fee; Insurance Premium for Unsubsidized Loans.— Section 428H of the Act (20 U.S.C. 1078–8) is amended— (1) in subsection (f)— (A) in the subsection heading, by striking “Insurance Premium” and inserting “Origination Fee”; (B) in the heading of paragraph (1), by striking “/insurance premium”; (C) in paragraph (1)— (i) by striking “a combined origination fee and insurance premium in the amount of 6.5 percent” and inserting “an origination fee in the amount of 3.0 percent”; and (ii) by striking the second sentence; (D) in paragraph (2), by striking “combined fee and premium” and inserting “origination fee”; (E) in paragraph (3), by striking “combined origination fee and insurance premium” and inserting “origination fee”; (F) in paragraph (4)— (i) in the heading, by striking “insurance premium” and inserting “origination fee”; (ii) by striking “combined origination fee and insurance premiums” and inserting “origination fees”; and (iii) by striking “and premiums to pay” and inserting “to pay”; and (G) in paragraph (5)— (i) in the heading, by inserting “origination fee and” before >“insurance”; and (ii) in the second sentence— 107 STAT. 367 (I) by striking “6.5 percent insurance premium” and inserting “combined origination fee under this subsection and the insurance premium under subsection (h)”; and (II) by inserting “origination fee and” before “insurance”; and (2) by adding at the end the following new subsection: “(1) Insurance Premium.— Each State or nonprofit private institution or organization having an agreement with the Secretary under section 428(b)(1) may charge a borrower under this section an insurance premium equal to not more than 1.0 percent of the principal amount of the loan, if such premium will not be used for incentive payments to lenders”. (c) Insurance Premium.— Section 428(b)(1)(H) of the Act (20 U.S.C. 1078(b)(1)(H)) is amended by striking “3 percent” and inserting “1.0 percent”. (d) Effective Date.— The amendments made by this section shall take effect on July 1, 1994.