§766.120. Extending maturity date and installment schedule for direct loans with a balloon payment.
7 C.F.R. § 766.120
At a borrower's written request, the maturity date and installment schedule of a direct term loan with a balloon payment may be extended for up to an additional 8 years from the original maturity date using an addendum to the promissory note when the:
Loan was originally amortized for no more than 15 years with a balloon payment scheduled in the final year of the loan;
Loan has not received PLS, DBSA, or DSA;
Borrower has made all scheduled loan installments in the last 36 months;
Balloon payment is due in less than 12 months;
Borrower does not have an outstanding DBSA or DSA on any loan;
Borrower has not received PLS on any loan in the last 36 months;
Borrower has only had equal installments scheduled on any direct term loan in the last 36 months;
Borrower's direct loans are fully secured with each loan having a security value of at least 100 percent of the remaining balance of the loan;
Borrower is unable to partially or fully graduate;
Borrower has acted in good faith;
Borrower is not otherwise financially distressed or delinquent;
Borrower must pay a portion of the interest due on the loan; and
Addendum is signed by the borrower before the original maturity date.
In no event may the loan exceed applicable term limits described in this part.
Notes, amendments, and revision history
Amendments
[89 FR 65045, Aug. 8, 2024]
Authority
Authority: 5 U.S.C. 301, 7 U.S.C. 1989, and 1981d(c).
Source
Source: 72 FR 63316, Nov. 8, 2007, unless otherwise noted.
Amendments
[89 FR 65045, Aug. 8, 2024]