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20 use 1078 note. PUBLIC LAW 103-66—AUG. 10, 1993 107 STAT. 367 (I) by striking "6.5 percent insurance pre- mium" and inserting "combined origination fee under this subsection and the insurance premium under subsection (h)"; and (II) by inserting "origination fee and" before "insurance"; and (2) by adding at the end the following new subsection: "(1) INSURANCE PREMiUM.~Each State or nonprofit private institution or organization having an agreement with the Secretary under section 428(bXl) may charge a boirower under this section an insurance premium equal to not more than 1.0 percent of the principal amount of the loan, if such premium will not be used for incentive payments to lenders.". (c) INSURANCE PREMIUM.—Section 428(bXlXH) of the Act (20 U.S.C. 1078(bXlXH)) is amended by striking "3 percent" and insert- ing "1.0 percent". (d) EFFECTIVE DATE.—^The amendments made by this section shall take effect on July 1,1994. SEC. 4103. LOAN FEES FROM LENDERS. Section 438 of the Act (20 U.S.C 1087-1) is further amended— (1) by redesignating subsections (d) and (e) as subsections (e) and (f), respectively; and (2) by inserting after subsection (c) the following new sub- section: "(d) LOAN FEES FROM LENDERS.— "(1) DEDUCTION FROM INTEREST AND SPECIAL ALLOWANCE SUBSIDIES.—^Notwithstanding subsection (b), the Secretary shall reduce the total amount of interest and special allowance pay- able under section 428(aX3XA) and subsection (b) of this section, respectively, to any holder of a loan by a loan fee in an amount determined in accordance with paragraph (2) of this subsection. If the total amount of interest and special allowance payable under section 428(aX3XA) and subsection (b) of this section, respectively, is less than the amount of such loan fee, then the Secretary shall deduct such excess amount from subsequent quarters' payments imtil the total amount has been deducted. "(2) AMOUNT OF LOAN FEES.—With respect to any loan under this part for which the first disbursement was made on or after October 1, 1993, the amount of the loan fee which shall be deducted under paragraph (1) shall be equal to 0.50 percent of the principal amount of the loan. "(3) DISTRIBUTION OF LOAN FEES.—The Secretary shall deposit all fees collected pursuant to paragraph (3) into the insurance fund established in section 431.". SEC. 4104. OFFSET FEE. Subsection (h) of section 439 of the Act (20 U.S.C. 1087-2(h)) is amended by adding at the end the following new paragraph: "(7) OFFSET FEE.—<A) "Die Association shall pay to the Secretajry, on a monthly basis, an offset fee calculated on an annual basis in an amount equal to 0.30 percent of the principal amount of each loan made, insured or guaranteed under tnis part that the Association holds (except for loans made pursuant to sections 428C, 439(o), or 439(q)) and that was acquired on or after the date of enactment of mis paragraph.