682.702—Effect on participation.

(a) Limitation, suspension, or termination proceedings by the Secretary do not affect a lender's responsibilities or rights to benefits and claim payments that are based on the lender's prior participation in the program, except as provided in paragraph (d) of this section and in § 682.709.
(b) A limitation imposes on a lender—
(1) A limit on the number or total amount of loans that a lender may make, purchase, or hold under the FFEL programs;
(2) A limit on the number or total amount of loans a lender may make to, or on behalf of, students at a particular school under the FFEL programs; or
(3) Other reasonable requirements or conditions, including those described in § 682.709.
(c) A limitation imposes on a third-party servicer—
(1) A limit on the number of loans or accounts or total amount of loans that the servicer may service;
(2) A limit on the number of loans or accounts or total amount of loans that the servicer is administering under its contract with a lender or guaranty agency; or
(3) Other reasonable requirements or conditions, including those described in § 682.709.
(d) After the date the termination of a lender's eligibility becomes effective, the Secretary does not guarantee new loans made by that lender or pay interest benefits, special allowance, or reinsurance on new loans guaranteed by a guaranty agency after that date. The Secretary may also prohibit the lender from making further disbursements on a loan for which a guarantee commitment has already been issued.

Code of Federal Regulations

(Authority: 20 U.S.C. 1080, 1082, 1085, 1094 )

Code of Federal Regulations

[57 FR 60323, Dec. 18, 1992, as amended at 59 FR 22457, Apr. 29, 1994]