§ 1087d.
(a)
Participation agreements
An agreement with any institution of higher education for participation in the direct student loan program under this part shall—
(1)
provide for the establishment and maintenance of a direct student loan program at the institution under which the institution will—
(A)
identify eligible students who seek student financial assistance at such institution in accordance with
section 1091 of this title;
(B)
estimate the need of each such student as required by part F of this subchapter for an academic year, except that, any loan obtained by a student under this part with the same terms as loans made under
section 1078–8 of this title (except as otherwise provided in this part), or a loan obtained by a parent under this part with the same terms as loans made under
section 1078–2 of this title (except as otherwise provided in this part), or obtained under any State-sponsored or private loan program, may be used to offset the student aid index of the student for that year;
(C)
provide a statement that certifies the eligibility of any student to receive a loan under this part that is not in excess of the annual or aggregate limit applicable to such loan, except that the institution may, in exceptional circumstances identified by the Secretary, refuse to certify a statement that permits a student to receive a loan under this part, or certify a loan amount that is less than the student’s determination of need (as determined under part F of this subchapter), if the reason for such action is documented and provided in written form to such student;
(D)
set forth a schedule for disbursement of the proceeds of the loan in installments, consistent with the requirements of
section 1078–7 of this title; and
(E)
provide timely and accurate information—
(i)
concerning the status of student borrowers (and students on whose behalf parents borrow under this part) while such students are in attendance at the institution and concerning any new information of which the institution becomes aware for such students (or their parents) after such borrowers leave the institution, to the Secretary for the servicing and collecting of loans made under this part; and
(ii)
if the institution does not have an agreement with the Secretary under subsection (b), concerning student eligibility and need, as determined under subparagraphs (A) and (B), to the Secretary as needed for the alternative origination of loans to eligible students and parents in accordance with this part;
(2)
provide assurances that the institution will comply with requirements established by the Secretary relating to student loan information with respect to loans made under this part;
(3)
provide that the institution accepts responsibility and financial liability stemming from its failure to perform its functions pursuant to the agreement;
(4)
provide for the implementation of a quality assurance system, as established by the Secretary and developed in consultation with institutions of higher education, to ensure that the institution is complying with program requirements and meeting program objectives;
(5)
provide that the institution will not charge any fees of any kind, however described, to student or parent borrowers for origination activities or the provision of any information necessary for a student or parent to receive a loan under this part, or any benefits associated with such loan;
(6)
provide assurances that, beginning July 1, 2026, the institution will comply with all requirements of subsection (c); and
(7)
include such other provisions as the Secretary determines are necessary to protect the interests of the United States and to promote the purposes of this part.
(b)
Origination
An agreement with any institution of higher education, or consortia thereof, for the origination of loans under this part shall—
(1)
supplement the agreement entered into in accordance with subsection (a);
(2)
include provisions established by the Secretary that are similar to the participation agreement provisions described in paragraphs (1)(E)(ii), (2), (3), (4), (5), (6), and (7) of subsection (a), as modified to relate to the origination of loans by the institution or consortium;
(3)
provide that the institution or consortium will originate loans to eligible students and parents in accordance with this part; and
(4)
provide that the note or evidence of obligation on the loan shall be the property of the Secretary.
(c)
Ineligibility for certain programs based on low earning outcomes
(2)
Low-earning outcome programs described
(3)
Calculation of median earnings
(A)
Working adult
For purposes of applying paragraph (2) to an educational program at an institution, a working adult described in this paragraph is a working adult who, for the corresponding year—
(ii)
is not enrolled in an institution of higher education; and
(iii)
(I)
in the case of a determination made for an educational program that awards a baccalaureate or lesser degree, has only a high school diploma or its recognized equivalent; or
(II)
in the case of a determination made for a graduate or professional program, has only a baccalaureate degree.
(B)
Source of data
For purposes of applying paragraph (2) to an educational program at an institution, the median earnings of a working adult, as described in subparagraph (A), shall be based on data from the Bureau of the Census—
(i)
with respect to an educational program that awards a baccalaureate or lesser degree—
(I)
for the State in which the institution is located; or
(II)
if fewer than 50 percent of the students enrolled in the institution reside in the State where the institution is located, for the entire United States; and
(ii)
with respect to an educational program that is a graduate or professional program—
(I)
for the lowest median earnings of—
(aa)
a working adult in the State in which the institution is located;
(bb)
a working adult in the same field of study (as determined by the Secretary, such as by using the 2-digit CIP code) in the State in which the institution is located; and
(cc)
a working adult in the same field of study (as so determined) in the entire United States; or
(II)
if fewer than 50 percent of the students enrolled in the institution reside in the State where the institution is located, for the lower median earnings of—
(aa)
a working adult in the entire United States; or
(bb)
a working adult in the same field of study (as so determined) in the entire United States.
(4)
Small programmatic cohorts
For any year for which the programmatic cohort described in paragraph (2) for an educational program of an institution is fewer than 30 individuals, the Secretary shall—
(A)
first, aggregate additional years of programmatic data in order to achieve a cohort of at least 30 individuals; and
(B)
second, in cases in which the cohort (including the individuals added under subparagraph (A)) is still fewer than 30 individuals, aggregate additional cohort years of programmatic data for educational programs of equivalent length in order to achieve a cohort of at least 30 individuals.
(7)
Regaining programmatic eligibility
([Pub. L. 89–329, title IV, § 454], as added [Pub. L. 99–498, title IV, § 404], Oct. 17, 1986, [100 Stat. 1438]; amended [Pub. L. 100–50, § 12], June 3, 1987, [101 Stat. 348]; [Pub. L. 102–325, title IV, § 451], July 23, 1992, [106 Stat. 571]; [Pub. L. 103–66, title IV, § 4021], Aug. 10, 1993, [107 Stat. 345]; [Pub. L. 111–152, title II, § 2210(a)], Mar. 30, 2010, [124 Stat. 1078]; [Pub. L. 116–260, div. FF, title VII, § 704(1)], Dec. 27, 2020, [134 Stat. 3199]; [Pub. L. 119–21, title VIII, § 84001], July 4, 2025, [139 Stat. 353].)