§1087h. Funds for administrative expenses

(a) Administrative expenses

(1) In general

Each fiscal year there shall be available to the Secretary, from funds not otherwise appropriated, funds to be obligated for-

(A) administrative costs under this part and part B of this subchapter, including the costs of the direct student loan programs under this part; and

(B) account maintenance fees payable to guaranty agencies under part B of this subchapter and calculated in accordance with subsections (b) and (c) of this section,

not to exceed (from such funds not otherwise appropriated) $617,000,000 in fiscal year 1999, $735,000,000 in fiscal year 2000, $770,000,000 in fiscal year 2001, $780,000,000 in fiscal year 2002, and $795,000,000 in fiscal year 2003.

(2) Account maintenance fees

Account maintenance fees under paragraph (1)(B) shall be paid quarterly and deposited in the Agency Operating Fund established under section 1072b of this title.

(3) Carryover

The Secretary may carry over funds made available under this section to a subsequent fiscal year.

(b) Calculation basis

Except as provided in subsection (c) of this section, account maintenance fees payable to guaranty agencies under paragraph (1)(B) shall be calculated-

(1) for fiscal years 1999 and 2000, on the basis of 0.12 percent of the original principal amount of outstanding loans on which insurance was issued under part B of this subchapter; and

(2) for fiscal years 2001, 2002, and 2003, on the basis of 0.10 percent of the original principal amount of outstanding loans on which insurance was issued under part B of this subchapter.

(c) Special rules

(1) Fee cap

The total amount of account maintenance fees payable under this section-

(A) for fiscal year 1999, shall not exceed $177,000,000;

(B) for fiscal year 2000, shall not exceed $180,000,000;

(C) for fiscal year 2001, shall not exceed $170,000,000;

(D) for fiscal year 2002, shall not exceed $180,000,000; and

(E) for fiscal year 2003, shall not exceed $195,000,000.

(2) Insufficient funding

(A) In general

If the amounts set forth in paragraph (1) are insufficient to pay the account maintenance fees payable to guaranty agencies pursuant to subsection (b) of this section for a fiscal year, the Secretary shall pay the insufficiency by requiring guaranty agencies to transfer funds from the Federal Student Loan Reserve Funds under section 1072a of this title to the Agency Operating Funds under section 1072b of this title.

(B) Entitlement

A guaranty agency shall be deemed to have a contractual right against the United States to receive payments according to the provisions of subparagraph (A).

(d) Budget justification

No funds may be expended under this section unless the Secretary includes in the Department of Education's annual budget justification to Congress a detailed description of the specific activities for which the funds made available by this section have been used in the prior and current years (if applicable), the activities and costs planned for the budget year, and the projection of activities and costs for each remaining year for which administrative expenses under this section are made available.

(Pub. L. 89–329, title IV, §458, as added Pub. L. 102–325, title IV, §451, July 23, 1992, 106 Stat. 573 ; amended Pub. L. 103–66, title IV, §4021, Aug. 10, 1993, 107 Stat. 353 ; Pub. L. 104–19, title I, §601, July 27, 1995, 109 Stat. 219 ; Pub. L. 105–33, title VI, §6103, Aug. 5, 1997, 111 Stat. 652 ; Pub. L. 105–78, title VI, §609(l), Nov. 13, 1997, 111 Stat. 1524 ; Pub. L. 105–244, title IV, §454, Oct. 7, 1998, 112 Stat. 1717 .)

Prior Provisions

Prior sections 1087i and 1087j were omitted in the general revision of this part by Pub. L. 103–66.

Section 1087i, Pub. L. 89–329, title IV, §459, as added Pub. L. 102–325, title IV, §451, July 23, 1992, 106 Stat. 575 , related to schedule of regulatory activities by Secretary under Federal direct loan demonstration program.

Section 1087j, Pub. L. 89–329, title IV, §459A, as added Pub. L. 102–325, title IV, §451, July 23, 1992, 106 Stat. 575 , related to funds for administrative expenses under Federal direct loan demonstration program.

Amendments

1998-Subsec. (a). Pub. L. 105–244, §454(1), amended heading and text of subsec. (a) generally. Prior to amendment, subsec. (a) related to availability of funds for administrative costs and cost allowances.

Subsec. (b). Pub. L. 105–244, §454(2), amended heading and text of subsec. (b) generally. Prior to amendment, text read as follows: "Funds made available under subsection (a) of this section shall remain available until expended."

Subsec. (c). Pub. L. 105–244, §454(5), added subsec. (c). Former subsec. (c) redesignated (d).

Subsec. (d). Pub. L. 105–244, §454(4), redesignated subsec. (c) as (d).

Pub. L. 105–244, §454(3), struck out heading and text of subsec. (d). Text read as follows: "In the event the Secretary finds it necessary to use the authority provided to the Secretary under subsection (a) of this section to draw funds for administrative expenses from a future year's funds, no funds may be expended under this section unless the Secretary immediately notifies the Committees on Appropriations of the Senate and of the House of Representatives, and the Labor and Human Resources Committee of the Senate and the Education and Labor Committee of the House of Representatives, of such action and explain the reasons for such action."

1997-Subsec. (a). Pub. L. 105–33 amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: "Each fiscal year, there shall be available to the Secretary of Education from funds available pursuant to section 1072(g) of this title and from funds not otherwise appropriated, funds to be obligated for administrative costs under this part, including the costs of the transition from the loan programs under part B of this subchapter to the direct student loan programs under this part (including the costs of annually assessing the program under this part and the progress of the transition) and transition support (including administrative costs) for the expenses of guaranty agencies in servicing outstanding loans in their portfolios and in guaranteeing new loans, not to exceed (from such funds not otherwise appropriated) $260,000,000 in fiscal year 1994, $284,000,000 in fiscal year 1995, $550,000,000 in fiscal year 1996, $595,000,000 in fiscal year 1997, and $750,000,000 in fiscal year 1998. If in any fiscal year the Secretary determines that additional funds for administrative expenses are needed as a result of such transition or the expansion of the direct student loan programs under this part, the Secretary is authorized to use funds available under this section for a subsequent fiscal year for such expenses, except that the total expenditures by the Secretary (from such funds not otherwise appropriated) shall not exceed $2,439,000,000 in fiscal years 1994 through 1998. The Secretary is also authorized to carry over funds available under this section to a subsequent fiscal year."

Subsec. (a)(1). Pub. L. 105–78 substituted "$507,000,000" for "$532,000,000" in closing provisions.

1995-Subsec. (a). Pub. L. 104–19 substituted "$284,000,000 in fiscal year 1995" for "$345,000,000 in fiscal year 1995" and "$2,439,000,000 in fiscal years 1994 through 1998" for "$2,500,000,000 in fiscal years 1994 through 1998".

1993-Pub. L. 103–66 amended section generally, substituting provisions relating to funds for administrative expenses for former provisions relating to reports.

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–244 effective Oct. 1, 1998, except as otherwise provided in Pub. L. 105–244, see section 3 of Pub. L. 105–244, set out as a note under section 1001 of this title.

Effective Date

Section effective Oct. 1, 1992, see section 2 of Pub. L. 102–325, set out as an Effective Date of 1992 Amendment note under section 1001 of this title.

Construction

Section 609(m) of Pub. L. 105–78 provided that: "Nothing in this Act [see Tables for classification] or an amendment made by this Act shall be construed to prohibit the Secretary of Education from using funds that are returned or otherwise recovered by the Secretary under section 422(g) of the Higher Education Act of 1965 (20 U.S.C. 1072(g)) including the balances of returned reserve funds, formerly held by the Higher Education Assistance Foundation, that are currently held in Higher Education Assistance Foundation Claims Reserves, Treasury account number 91X6192, for expenditure for expenses pursuant to section 458 of such Act (20 U.S.C. 1087h)."

Use of Funds for Administrative Expenses of William D. Ford Direct Loan Program Prohibited

Pub. L. 104–208, div. A, title I, §101(e) [title III, §304], Sept. 30, 1996, 110 Stat. 3009–233 , 3009-261, provided in part that: "Notwithstanding section 458 of the Higher Education Act [of 1965] [20 U.S.C. 1087h], the Secretary may not use funds available under that section or any other section for subsequent fiscal years for administrative expenses of the William D. Ford Direct Loan Program."

Similar provisions were contained in the following prior appropriation act:

Pub. L. 104–134, title I, §101(d) [title III, §305], Apr. 26, 1996, 110 Stat. 1321–211 , 1321-236; renumbered title I, Pub. L. 104–140, §1(a), May 2, 1996, 110 Stat. 1327 .

Section Referred to in Other Sections

This section is referred to in sections 1018, 1072, 1072b, 1087e of this title.