Student Financial Aid Act

Student Financial Aid Act - Authorizes the appropriation of $20,000,000 for advancement to the States for purposes of reserve funds for student low-interest insured loans for students in institutions of higher learning.

Sets forth the scope and duration of the Federal loan insurance program for such students under this Act. Sets amount limitations for fiscal years through 1980.

Provides for the determination of student borrower eligibility under the Higher Education Act of 1965.

Sets forth requirements which the Secretary of Health, Education, and Welfare shall determine to have been met by State or nonprofit institutions or organizations under agreements for purposes of entitling students receiving student loans under such Act to have payments made on their behalf.

Authorizes the Federal payment of a portion of interest costs on student loans to the loan holder at the time the loan is made under circumstances specified under this Act.

Provides for the Federal payment of interest upon the default of students under the Federal loan insurance fund.

Establishes an insurance fund to make available without fiscal year limitations funds for the payments under this Act in connection with defaulted loans.

Sets forth the legal powers and duties of the Secretary under this Act.

Provides for the participation of Federal credit unions in student loan programs.

Authorizes the establishment by the Mayor of the District of Columbia of a student loan insurance program.

Provides for the Federal payment of loans when the borrower is disabled or dies.

Establishes a Student Loan Marketing Association to serve as a secondary market to handle loans under this Act. Authorizes the appropriation of $5,000,000 to establish such Association. Requires the repayment of such an advancement.

Sets forth the powers and duties of the Association.

Authorizes the Commissioner of Education to make direct student loans to students in need. Sets the terms of such loans.

Sets penalties for excess defaults of student loans under this Act.