Sec. 5. Elimination of interest capitalization
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Section 428B(d)(2) of the Higher Education Act of 1965 ( 20 U.S.C. 1078–2(d)(2) ) is amended to read as follows: Interest on loans made under this section for which payments of principal are deferred pursuant to paragraph
(1)shall be paid monthly or quarterly, if agreed upon by the borrower and the lender and shall not be capitalized. . Section 428C(b)(4)(C)(ii)(III) of the Higher Education Act of 1965 ( 20 U.S.C. 1078–3(b)(4)(C)(III) ) is amended by striking or capitalized, . Section 428H(d)(5) of the Higher Education Act of 1965 ( 20 U.S.C. 1078–8(d)(5) ) is amended by inserting before the date of enactment of the after Student Loan Refinancing and Recalculation Act Interest capitalized . Section 428H(e)(2) of the Higher Education Act of 1965 ( 20 U.S.C. 1078–8(e)(2) ) is amended— in the header, by striking and inserting Capitalization ; No capitalization in subparagraph (A), in the matter before clause (i), by striking , if agreed upon by the borrower and the lender and all that follows through clause (ii)(IV) and inserting be paid monthly or quarterly, if agreed upon by the borrower and the lender and shall not be capitalized. ; by striking subparagraph (B); and by redesignating subparagraph
(C)as subparagraph (B). Section 455(e)(5) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(e)(5) ) is amended by striking the last sentence and inserting No interest may be capitalized on such loan on or after the date of the enactment of the . Student Loan Refinancing and Recalculation Act , and the Secretary shall promulgate regulations with respect to the treatment of accrued interest that is not capitalized. Section 455(f)(1)(B) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(f)(1)(B) ) is amended by striking capitalized or . Section 493C(b)(3) of the Higher Education Act of 1965 ( 20 U.S.C. 1098e(b)(3) ) is amended to read as follows: on subsidized loans, any interest due and not paid under paragraph
(2)shall be paid by the Secretary for a period of not more than 3 years after the date of the borrower’s election under paragraph (1), except that such period shall not include any period during which the borrower is in deferment due to an economic hardship described in section 435(o); . Section 485A(f) of the Higher Education Act of 1965 ( 20 U.S.C. 1092a(f) ) is amended by adding at the end the following new paragraph: Not withstanding paragraphs
(1)and (2), beginning on the date of enactment of the Student Loan Refinancing and Recalculation Act , interest on a loan reissued under subsection
(e)shall not be capitalized, and interest shall only accrue on the percentage of such reissued loan that is equal to— the amount of the outstanding principal on the original loan on the date it was reissued; divided by the total amount of such reissued loan on the date such loan was reissued. . Section 428F(a)(1)(E) of the Higher Education Act of 1965 ( 20 U.S.C. 1078–6(a)(1)(E) ) is amended— in clause (i), by striking and at the end; in clause (ii), by striking the period at the end and inserting a semicolon; and by adding to the end the following: for a loan assigned on or after the date of enactment of the Student Loan Refinancing and Recalculation Act , the interest outstanding at the time of the assignment of such loan, and any interest accruing after such time, shall not be capitalized; and beginning on the date of enactment of the Student Loan Refinancing and Recalculation Act , interest shall only accrue on the percentage of such a loan that is equal to— the amount of the outstanding principal on the original loan on the date it was assigned; divided by the total amount of such assigned loan, including interest outstanding at the time of the assignment of such loan and the amount added by the guaranty agency in accordance with clause (i), on the date such loan was assigned. .
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- 20 USC 1078–2(d)(2)
- 20 USC 1078–3(b)(4)(C)(III)
- 20 USC 1078–8(d)(5)
- 20 USC 1078–8(e)(2)
- 20 USC 1078–6(a)(1)(E)
Citation graph
cites case law
Sec. 5
Elimination of interest capitalization
Cite20 USC 1078–2(d)(2)
Cite20 USC 1078–3(b)(4)(C)(III)
Cite20 USC 1078–8(d)(5)
Cite20 USC 1078–8(e)(2)
Cite20 USC 1078–6(a)(1)(E)
Cites 8Cited by 0 across 0 sources