View all text of Subchapter III [§ 930 - § 940i]
§ 936b. Sale or prepayment of direct or insured loans
(a) Discounted prepayment by borrowers of electric loans
(1) In general
(2) Exception
(A) the outstanding principal balance on the loan; or
(B) the present value of the loan discounted from the face value at maturity at the rate established by the Secretary.
(3) Discount rate
(4) Tax exempt financing
(5) Eligibility
(A) In generalA borrower that has prepaid an insured or direct loan shall remain eligible for assistance under this chapter in the same manner as other borrowers, except that—
(i) a borrower that has prepaid a loan, either before or after October 21, 1992, at a discount rate as provided by paragraph (3), shall not be eligible, except at the discretion of the Secretary, to apply for or receive direct or insured loans under this chapter during the 120-month period beginning on the date of the prepayment; and
(ii) a borrower that prepaid a loan before October 21, 1992, at a discount rate greater than that provided by paragraph (3), shall not be eligible—(I) except at the discretion of the Secretary, to apply for or receive direct or insured loans described in clause (i) during the 180-month period beginning on the date of the prepayment; or(II) to apply for or receive direct or insured loans described in clause (i) until the borrower has repaid to the Federal Government the sum of—(aa) the amount (if any) by which the discount the borrower received by reason of the prepayment exceeds the discount the borrower would have received had the discount been based on the cost of funds to the Department of the Treasury at the time of the prepayment; and(bb) interest on the amount described in item (aa), for the period beginning on the date of the prepayment and ending on the date of the repayment, at a rate equal to the average annual cost of borrowing by the Department of the Treasury.
(B) Effect on existing agreements
(C) Distribution borrowers
(6) DefinitionsAs used in this subsection:
(A) Direct loan
(B) Insured loan
(b) Mergers of electric borrowers
(May 20, 1936, ch. 432, title III, § 306B, as added Pub. L. 99–509, title I, § 1011(a), Oct. 21, 1986, 100 Stat. 1876; amended Pub. L. 101–624, title XXIII, § 2387, Nov. 28, 1990, 104 Stat. 4051; Pub. L. 102–428, § 2, Oct. 21, 1992, 106 Stat. 2183; Pub. L. 103–354, title II, § 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)