Sec. 2212. CONTRACTS; MANDATORY FUNDS
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## SEC. 2212 CONTRACTS; MANDATORY FUNDS ###
(a)Contracts Section 456 (20 U.S.C. 1087f) is amended— ####
(1)in subsection (a)— #####
(A)by inserting after paragraph
(3)the following new paragraph: > > #### “(4) Servicing by eligible not-for-profit servicers > > > ##### “(A) Servicing contracts > > > ###### “(i) In general > > The Secretary shall contract with each eligible not-for-profit servicer to service loans originated under this part, if the servicer— > > > ###### “(I) > > meets the standards for servicing Federal assets that apply to contracts awarded pursuant to paragraph (1); and > > > ###### “(II) > > has the capacity to service the applicable loan volume allocation described in subparagraph (B). > > > ###### “(ii) Competitive market rate determination for first 100,000 borrower accounts > > The Secretary shall establish a separate pricing tier for each of the first 100,000 borrower loan accounts at a competitive market rate. > > > ###### “(iii) Ineligibility > > An eligible not-for-profit servicer shall no longer be eligible for a contract under this paragraph after July 1, 2014, if— > > > ###### “(I) > > the servicer has not been awarded such a contract before that date; or > > > ###### “(II) > > the servicer’s contract was terminated, and the servicer had not reapplied for, and been awarded, a contract under this paragraph. > > > ##### “(B) Allocations > > > ###### “(i) In general > > The Secretary shall (except as provided in clause (ii)) allocate to an eligible not-for-profit servicer, subject to the contract of such servicer described in subparagraph (A), the servicing rights for the loan accounts of 100,000 borrowers (including borrowers who borrowed loans in a prior year that were serviced by the servicer). > > > ###### “(ii) Servicer allocation > > The Secretary may reallocate, increase, reduce, or terminate an eligible not-for-profit servicer’s allocation of servicing rights under clause
(i)based on the performance of such servicer, on the same terms as loan allocations provided by contracts awarded pursuant to paragraph (1).” > ; and ####
(2)by adding at the end the following: > > ### “(c) Definition of Eligible Not-for-profit Servicer > > In this section: > > > #### “(1) In general > > The term ‘eligible not-for-profit servicer’ means an entity— > > > ##### “(A) > > that is not owned or controlled in whole or in part by— > > > ###### “(i) > > a for-profit entity; or > > > ###### “(ii) > > a nonprofit entity having its principal place of business in another State; and > > > ##### “(B) > > that— > > > ###### “(i) > > as of July 1, 2009— > > > ###### “(I) > > meets the definition of an eligible not-for-profit holder under section 435(p), except that such term does not include eligible lenders described in paragraph (1)(D) of such section; and > > > ###### “(II) > > was performing, or had entered into a contract with a third party servicer (as such term is defined in section 481(c)) who was performing, student loan servicing functions for loans made under part B of this title; > > > ###### “(ii) > > notwithstanding clause (i), as of July 1, 2009— > > > ###### “(I) > > is the sole beneficial owner of a loan for which the special allowance rate is calculated under section 438(b)(2)(I)(vi)(II) because the loan is held by an eligible lender trustee that is an eligible not-for-profit holder as defined under section 435(p)(1)(D); and > > > ###### “(II) > > was performing, or had entered into a contract with a third party servicer (as such term is defined in section 481(c)) who was performing, student loan servicing functions for loans made under part B of this title; or > > > ###### “(iii) > > is an affiliated entity of an eligible not-for-profit servicer described in clause
(i)or
(ii)that— > > > ###### “(I) > > directly employs, or will directly employ (on or before the date the entity begins servicing loans under a contract awarded by the Secretary pursuant to subsection (a)(3)(A)), the majority of individuals who perform borrower-specific student loan servicing functions; and > > > ###### “(II) > > as of July 1, 2009, was performing, or had entered into a contract with a third party servicer (as such term is defined in section 481(c)) who was performing, student loan servicing functions for loans made under part B of this title. > > > #### “(2) Affiliated entity > > For the purposes of paragraph (1), the term ‘affiliated entity’— > > > ##### “(A) > > means an entity contracted to perform services for an eligible not-for-profit servicer that— > > > ###### “(i) > > is a nonprofit entity or is wholly owned by a nonprofit entity; and > > > ###### “(ii) > > is not owned or controlled, in whole or in part, by— > > > ###### “(I) > > a for-profit entity; or > > > ###### “(II) > > an entity having its principal place of business in another State; and > > > ##### “(B) > > may include an affiliated entity that is established by an eligible not-for-profit servicer after the date of enactment of the SAFRA Act, if such affiliated entity is otherwise described in paragraph (1)(B)(iii)(I) and subparagraph
(A)of this paragraph.” > . ###
(b)Mandatory Funds ####
(1)Amendments Section 458(a) (20 U.S.C. 1087h(a)) is amended— #####
(A)by redesignating paragraph
(5)as paragraph (8); #####
(B)by redesignating paragraphs
(2)through
(4)as paragraphs
(3)through (5), respectively; #####
(C)by inserting after paragraph
(1)the following new paragraph: > > #### “(2) Mandatory funds for eligible not-for-profit servicers > > For fiscal years 2010 through 2019, there shall be available to the Secretary, in addition to any other amounts appropriated to carry out this paragraph and out of any money in the Treasury not otherwise appropriated, funds to be obligated for administrative costs of servicing contracts with eligible not-for-profit servicers as described in section 456.” > ; and #####
(D)by inserting after paragraph (5), as redesignated by subparagraph
(B)of this paragraph, the following: > > #### “(6) Technical assistance to institutions of higher education > > > ##### “(A) Provision of assistance > > The Secretary shall provide institutions of higher education participating, or seeking to participate, in the loan programs under this part with technical assistance in establishing and administering such programs. > > > ##### “(B) Funds > > There are authorized to be appropriated, and there are appropriated, to carry out this paragraph (in addition to any other amounts appropriated to carry out this paragraph and out of any money in the Treasury not otherwise appropriated), $50,000,000 for fiscal year 2010. > > > ##### “(C) Definition > > In this paragraph, the term ‘assistance’ means the provision of technical support, training, materials, technical assistance, and financial assistance. > > > #### “(7) Additional payments > > > ##### “(A) Provision of assistance > > The Secretary shall provide payments to loan servicers for retaining jobs at locations in the United States where such servicers were operating under part B on January 1, 2010. > > > ##### “(B) Funds > > There are authorized to be appropriated, and there are appropriated, to carry out this paragraph (in addition to any other amounts appropriated to carry out this paragraph and out of any money in the Treasury not otherwise appropriated), $25,000,000 for each of the fiscal years 2010 and 2011.” > . ####
(2)Conforming amendment Section 458 (20 U.S.C. 1087h) is further amended by striking “subsection (a)(3)” in subsection
(b)and inserting “subsection (a)(4)”.
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