FEDERAL PLUS LOANS.

SEC. 424. FEDERAL PLUS LOANS.(a) Amendments.—Section 428B (20 U.S.C. 1078–2) is amended—(1) in subsection (a)(3)(B)(i), by striking subclause (II) and inserting the following:“(II) does not otherwise have an adverse credit history, as determined by the lender in accordance with the regulations promulgated pursuant to paragraph (1)(A), as such regulations were in effect on the day before the date of enactment of the Ensuring Continued Access to Student Loans Act of 2008.”; and(2) in subsection (d), by striking paragraphs (1) and (2) and inserting the following:“(1) Commencement of repayment.—Repayment of principal on loans made under this section shall commence not later than 60 days after the date such loan is disbursed by the lender, subject to deferral—“(A)(i) during any period during which the parent borrower or the graduate or professional student borrower meets the conditions required for a deferral under section 427(a)(2)(C) or 428(b)(1)(M); and“(ii) upon the request of the parent borrower, during any period during which the student on whose behalf the loan was borrowed by the parent borrower meets the conditions required for a deferral under section 427(a)(2)(C)(i)(I) or 428(b)(1)(M)(i)(I); and“(B)(i) in the case of a parent borrower, upon the request of the parent borrower, during the 6-month period beginning on the later of—“(I) the day after the date the student on whose behalf the loan was borrowed ceases to carry at least one-half the normal full-time academic workload (as determined by the institution); or122 STAT. 3233“(II) if the parent borrower is also a student, the day after the date such parent borrower ceases to carry at least one-half such a workload; and“(ii) in the case of a graduate or professional student borrower, during the 6-month period beginning on the day after the date such student ceases to carry at least one-half the normal full-time academic workload (as determined by the institution).“(2) Capitalization of interest.—“(A) In general.—Interest on loans made under this section for which payments of principal are deferred pursuant to paragraph (1) shall, if agreed upon by the borrower and the lender—“(i) be paid monthly or quarterly; or“(ii) be added to the principal amount of the loan not more frequently than quarterly by the lender.“(B) Insurable limits.—Capitalization of interest under this paragraph shall not be deemed to exceed the annual insurable limit on account of the borrower.”.(b) Conforming Amendment.—Section 428(b)(7)(C) (20 U.S.C. 1078(b)(7)(C)) is amended by striking “section” and all that follows through “428C” and inserting “section 428B or 428C”.(c) Effective Date.—The amendments made by this section shall take effect for loans for which the first disbursement is made on or after July 1, 2008.