((a))

((1)) ** .—** Subject to the provisions of this section, the Secretary may repay—

((A)) any loan made, insured, or guaranteed under part B of title IV of the Higher Education Act of 1965 ( et seq.);

((B)) any loan made under part D of such title (the William D. Ford Federal Direct Loan Program, et seq.);

((C)) any loan made under part E of such title ( et seq.); or

((D)) any loan incurred for educational purposes made by a lender that is—

((i)) an agency or instrumentality of a State;

((ii)) a financial or credit institution (including an insurance company) that is subject to examination and supervision by an agency of the United States or any State;

((iii)) a pension fund approved by the Secretary for purposes of this section; or

((iv)) a nonprofit private entity designated by a State, regulated by such State, and approved by the Secretary for purposes of this section.

((2)) ** .—** Repayment of any such loan shall be made on the basis of each complete year of service performed by the borrower.

((3)) ** .—** The Secretary may repay loans described in paragraph (1) in the case of any person for service performed on active duty as a member in an officer program or military specialty specified by the Secretary.

((b)) ** .—** The portion or amount of a loan that may be repaid under subsection (a) is 33⅓ percent or $1,500, whichever is greater, for each year of service.

((c)) ** .—** If a portion of a loan is repaid under this section for any year, interest on the remainder of such loan shall accrue and be paid in the same manner as is otherwise required.

((d)) ** .—** Nothing in this section shall be construed to authorize refunding any repayment of a loan.

((e)) ** .—** An individual who transfers from service making the individual eligible for repayment of loans under this section (as described in subsection (a)(3)) to service making the individual eligible for repayment of loans under (as described in subsection (a)(2) or (g) of that section) during a year shall be eligible to have repaid a portion of such loan determined by giving appropriate fractional credit for each portion of the year so served, in accordance with regulations of the Secretary concerned.

((f)) ** .—** The Secretary shall prescribe a schedule for the allocation of funds made available to carry out the provisions of this section and during any year for which funds are not sufficient to pay the sum of the amounts eligible for repayment under subsection (a) and .

((g)) ** .—** Except an individual described in subsection (e) who transfers to service making the individual eligible for repayment of loans under , a member of the Coast Guard who fails to complete the period of service required to qualify for loan repayment under this section shall be subject to the repayment provisions of section 303a(e) or 373 of title 37.

((h)) ** .—** The Secretary may prescribe procedures for implementing this section, including standards for qualified loans and authorized payees and other terms and conditions for making loan repayments. Such regulations may include exceptions that would allow for the payment as a lump sum of any loan repayment due to a member under a written agreement that existed at the time of a member’s death or disability.