Higher Education Loan Program Act of 1991

Higher Education Loan Program Act of 1991 - Amends the Higher Education Act of 1965 (HEA) to establish a Federal Direct Loans program as part D of title IV of HEA. (Eliminates the current part D, Income Contingent Direct Loans Demonstration Project.)

Directs the Secretary of Education (the Secretary) to carry out such Federal direct loan program (the program) for qualified students at institutions of higher education during the period beginning on July 1, 1993.

Directs the Secretary to make program payments for any fiscal year to: (1) each institution of higher education having a program agreement; and (2) the lending agent if such an institution designates one. Requires such payments to be made on the basis of the estimated needs of the institution's students, considering their demand and eligibility for subsidized and unsubsidized direct loans under the program.

Sets forth program payment rules, in general and for initial payments.

Declares that an institution with an approved application and agreement with the Secretary shall be deemed to have a contractual obligation (entitlement) from the United States for making the program payments specified in that application.

Sets forth requirements for such applications of and agreements with institutions of higher education. Provides for allowing institutions to designate lending agents to receive advances of program payments. Sets forth types of entities eligible to be designated lending agents.

Entitles an institution to a payment for each fiscal year during which it makes student loans under such an agreement in lieu of reimbursement for its expenses in administering its student loan program during such year. Sets forth formulas for determining such payments. Requires each institution to use such payments first to carry out specified HEA provisions relating to administrative expenses and then for such additional administrative costs as that institution determines necessary. Deems an institution with such program agreement to have a contractual right to such payments.

Provides for student eligibility for, and the amount of, loans under the program.

Limits program eligibility, among other criteria, to qualified students carrying at least one-half the normal academic workload and maintaining good standing, who are U.S. citizens and not more than 50 years old.

Prohibits such loans for proprietary school study.

Provides for determining loans to students, based on cost of attendance and other types of student aid. Sets forth annual and aggregate limits for loans for and graduate or professional students.

Sets forth terms of loans under the program. Provides for deferments of repayment during specified periods of education.

Sets forth requirements for multiple disbursement of student loans.

Sets forth loan repayment rules, including minimum repayment amounts. Requires, if a borrower so requests, that repayment be made in accordance with a graduated schedule established by the Secretary. Allows the Secretary and the borrower to agree to increase the specified repayment period, but prohibits it from extending beyond 20 years. Directs the Secretary to notify the student borrower, at the beginning of the repayment period, of the availability of the flexible repayment program.

Provides for eight percent annual interest rates on loans.

Sets forth requirements for consolidation loans. Directs the Secretary to enter into agreements to provide loans to consolidate eligible student loans for those in repayment status who are not delinquent by more than 90 days.