FEDERAL CONSOLIDATION LOANS.

SEC. 2206. FEDERAL CONSOLIDATION LOANS. (a) In General.—Section 428C (20 U.S.C. 1078-3) is amended— (1) in subsection (a)(4)(A), by inserting “, and first disbursed before July 1, 2010” after “under this part”; (2) in subsection (b)— (A) in paragraph (1)(E), by inserting before the semicolon “, and before July 1, 2010”; and (B) in paragraph (5), by striking “In the event that” and inserting “If, before July 1, 2010,”; (3) in subsection (c)(1)— (A) in subparagraph (A)(ii), by inserting “and that is disbursed before July 1, 2010,” after “2006,”; and (B) in subparagraph (C), by inserting “and disbursed before July 1, 2010,” after “1994,”; and (4) in subsection (e), by striking “September 30, 2014.” and inserting “June 30, 2010. No loan may be made under this section for which the disbursement is on or after July 1, 2010.”. (b) Temporary Loan Consolidation Authority.—Part D of title IV (20 U.S.C. 1087a et seq.) is amended by inserting after section 459A (20 U.S.C. 1087i) the following: “SEC. 459B. [20 U.S.C. 1087i-2] TEMPORARY LOAN CONSOLIDATION AUTHORITY “(a) Temporary Loan Consolidation Authority.— “(1) In general.—A borrower who has 1 or more loans in 2 or more of the categories described in paragraph (2), and who has not yet entered repayment on 1 or more of those loans in any of the categories, may consolidate all of the loans of the borrower that are described in paragraph (2) into a Federal Direct Consolidation Loan during the period described in paragraph (3). “(2) Categories of loans that may be consolidated.—The categories of loans that may be consolidated under paragraph (1) are— “(A) loans made under this part; “(B) loans purchased by the Secretary pursuant to section 459A; and “(C) loans made under part B that are held by an eligible lender, as such term is defined in section 435(d). “(3) Time period in which loans may be consolidated.—The Secretary may make a Federal Direct Consolidation Loan under this section to a borrower whose application for such Federal Direct Consolidation Loan is received on or after July 1, 2010, and before July 1, 2011. “(b) Terms of Loans.—A Federal Direct Consolidation Loan made under this section shall have the same terms and conditions as a Federal Direct Consolidation Loan made under section 455(g), except that— “(1) in determining the applicable rate of interest on the Federal Direct Consolidation Loan made under this section (other than on a Federal Direct Consolidation Loan described in paragraph (2)), section 427A(l)(3) shall be applied without rounding the weighted average of the interest rate on the loans consolidated to the nearest higher one-eighth of 1 percent as described in subparagraph (A) of section 427A(l)(3); and “(2) if a Federal Direct Consolidation Loan made under this section that repays a loan which is subject to an interest rate determined under section 427A(g)(2), (j)(2), or (k)(2), then the interest rate for such Federal Direct Consolidation Loan shall be calculated— “(A) by using the applicable rate of interest described in section 427A(g)(2), (j)(2), or (k)(2), respectively; and “(B) in accordance with section 427A(l)(3).” .