Section 1466 - [Operative 2/15/2025] Loans with Income-Driven Repayment Options; Education Financing(a) A loan contract with income-driven repayment provisions complies with the requirement in Financial Code section 22307, subdivision (b), that a loan contract "provide for payment of the aggregate amount contracted to be paid in substantially equal periodical installments," if the contract provides the borrower with a predefined formula for calculating each payment during the term of the contract where the only unknown variable as of the effective date of each such contract is the income of the borrower at the point of calculation of each payment. For a contract described in this subdivision, a payment calculated under income-driven repayment shall not be considered a balloon payment under section 1453 of this subchapter.(b) A loan contract that does not require a borrower to make payments while the borrower is obtaining a postsecondary education or for a predefined fixed grace period after completion or termination of a postsecondary education, as that term is defined in California Code of Regulations, title 10, section 1003, subdivision (f), complies with the requirement in Financial Code section 22307, subdivision (b), that the first payment be made not "more than one month and 15 days from the date the loan is made," if the loan contract does not accrue charges during the period in which the borrower is not required to make payments. In this subdivision, accrued charges are additional amounts that a borrower is required to repay because of the passage or occurrence of the period described in this subdivision.Cal. Code Regs. Tit. 10, § 1466
Note: Authority cited: Sections 22150 and 90009, Financial Code. Reference: Section 22200, Financial Code.
1. New section filed 10-11-2024; operative 2/15/2025 (Register 2024, No. 41).