CONSOLIDATION LOAN CHANGES.

SEC. 8009. CONSOLIDATION LOAN CHANGES.(a) Consolidation Between Programs.—Section 428C (20 U.S.C. 1078–3) is amended—(1) in subsection (a)(3)(B)(i)—(A) by inserting “or under section 455(g)” after “under this section” both places it appears;(B) by inserting “under both sections” after “terminates”;(C) by striking “and” at the end of subclause (III);(D) by striking the period at the end of subclause (IV) and inserting “; and”; and(E) by adding at the end the following new subclause:“(V) an individual may obtain a subsequent consolidation loan under section 455(g) only for the purposes of 120 STAT. 164 obtaining an income contingent repayment plan, and only if the loan has been submitted to the guaranty agency for default aversion.”; and(2) in subsection (b)(5), by striking the first sentence and inserting the following: “In the event that a lender with an agreement under subsection (a)(1) of this section denies a consolidation loan application submitted to the lender by an eligible borrower under this section, or denies an application submitted to the lender by such a borrower for a consolidation loan with income-sensitive repayment terms, the Secretary shall offer any such borrower who applies for it, a Federal Direct Consolidation loan. The Secretary shall offer such a loan to a borrower who has defaulted, for the purpose of resolving the default.”.(b) Repeal of In-School Consolidation.—(1) Definition of repayment period.—Section 428(b)(7)(A) (20 U.S.C. 1078(b)(7)(A)) is amended by striking “shall begin—” and all that follows through “earlier date.” and inserting the following: “shall begin the day after 6 months after the date the student ceases to carry at least one-half the normal full-time academic workload (as determined by the institution).”.(2) Conforming change to eligible borrower definition.—Section 428C(a)(3)(A)(ii)(I) (20 U.S.C. 1078–3(a)(3)(A)(ii)(I)) is amended by inserting “as determined under section 428(b)(7)(A)” after “repayment status”.(c) Additional Amendments.—Section 428C (20 U.S.C. 1078–3) is amended in subsection (a)(3), by striking subparagraph (C).(d) Conforming Amendments to Direct Loan Program.—Section 455 (20 U.S.C. 1087e) is amended—(1) in subsection (a)(1) by inserting “428C,” after “428B,”;(2) in subsection (a)(2)—(A) by striking “and” at the end of subparagraph (B);(B) by redesignating subparagraph (C) as subparagraph (D); and(C) by inserting after subparagraph (B) the following:“(C) section 428C shall be known as ‘Federal Direct Consolidation Loans’; and ”; and(3) in subsection (g)—(A) by striking the second sentence; and(B) by adding at the end the following new sentences: “To be eligible for a consolidation loan under this part, a borrower shall meet the eligibility criteria set forth in section 428C(a)(3). The Secretary, upon application for such a loan, shall comply with the requirements applicable to a lender under section 428C(b)(1)(F).”.