[Federal Register Volume 59, Number 114 (Wednesday, June 15, 1994)]
[Unknown Section]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14231]
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[Federal Register: June 15, 1994]
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CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
45 CFR Parts 2525, 2526, 2527, 2528, and 2529
National Service Trust
AGENCY: Corporation for National and Community Service.
ACTION: Interim final rule.
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SUMMARY: The Corporation for National and Community Service (the
Corporation) is issuing this interim final rule implementing
requirements of subtitle D of the National and Community Service Act of
1990 (the Act). This rule describes the following: the National Service
Trust (the Trust); who is eligible to receive education awards from the
Trust; how the amount of the education awards is determined; the
purposes for which the education awards may be used; and the
circumstances under which AmeriCorps participants will receive
forbearance and payment of interest expenses on qualified student
loans. This rule is intended to allow for the provision of educational
benefits to AmeriCorps participants.
DATES: Interim rule effective June 15, 1994; comments must be received
on or before August 1, 1994.
ADDRESSES: Comments must be mailed to the Corporation for National and
Community Service, P.O. Box 34680, Washington, DC 20034-4680 or hand
delivered to the Office of the General Counsel, room 9200, 1100 Vermont
Avenue, Washington, DC 20525. Comments received may be inspected at the
Corporation for National and Community Service, Office of the General
Counsel, room 9200, 1100 Vermont Avenue NW., Washington, DC 20525,
between 9 a.m. and 5 p.m. Eastern daylight savings time.
FOR FURTHER INFORMATION CONTACT:
Terry Russell, (202) 606-4949 (Voice) or (202) 606-5256 (TDD), between
the hours of 9 a.m. and 6 p.m. Eastern daylight savings time. For
individuals with disabilities, information will be made available in
alternative formats upon request.
SUPPLEMENTARY INFORMATION: The Corporation has published this rule as
an interim final rule rather than as a proposed rule pursuant to 44
U.S.C. 553(b)(3)(B). The Corporation is making grants to AmeriCorps
programs that will operate over the summer of 1994 and whose
participants will need to receive education awards under the terms and
conditions of this rule. Since it would be contrary to the public
interest to publish this rule as a proposed rule, it is published as an
interim final rule to take effect immediately.
On March 23, 1994, the Corporation published final regulations
governing the Corporation's grantmaking programs and various support
and investment activities authorized by the Act (59 FR 13772). This
rule establishes regulations to implement sections 145 through 148 of
subtitle D of the Act, which requires the Corporation to make payments
from the National Service Trust for education awards for AmeriCorps
participants and for interest expenses that accrue on qualified student
loans for which participants have obtained forbearance during a term of
service in an AmeriCorps program.
Overview of This Interim Final Rule and Discussion of Policy
Decisions
In general, this rule incorporates, without substantive change, the
statutory requirements regarding the eligibility of AmeriCorps
participants to receive and use education awards, the standards for
determining the amount of the education award, the possible uses of and
procedures for using education awards, the procedures for obtaining
forbearance in repaying qualified student loans while serving in an
AmeriCorps program, and the procedures for making interest payments
from the National Service Trust.
Some sections of the regulations interpret and elaborate on
provisions in the statute. Those sections are discussed below.
AmeriCorps participants who are released for cause are not eligible
to receive any portion of the education award. However, participants
who are released for compelling personal circumstances, at the
discretion of their respective programs, either may have their service
suspended and return at a later date to complete their terms or may
receive a pro-rated education award. Sections 2526.20 and 2527.10 of
this rule set some guidelines for programs to make these
determinations.
First, the corporation encourages programs--whenever possible and
appropriate--to suspend a participant's term of service rather than
offer a pro-rated education award. The intent is to always encourage
participants to complete their terms of service if at all possible.
Second, the regulations further clarify that participants who are
released for compelling personal circumstances only may receive a pro-
rated education award if they have completed at least 15% of their
terms of service. There are a number of reasons for this policy. From a
logistical standpoint, 15% of a full-time term of service equates to
approximately six weeks; similarly, programs are allowed to fill an
approved AmeriCorps position left vacant due to attrition only within
the first six weeks of a term of service. Programs that offered pro-
rated education awards within this first six weeks would forfeit those
AmeriCorps positions--an outcome that is desirable neither for the
programs nor for the Corporation. From an economic standpoint, the
value of a pro-rated education award for significantly less than 15% of
a term of service would be insufficient to pay for most educational
expenses and, in many cases, would be less than the administrative
costs of providing that award. Finally, the Corporation did not set the
limit at a higher percentage because it recognizes that there may be
compelling cases in which participants legitimately would be unable to
continue service even after a period of suspension but would benefit
from and should receive a relatively small, pro-rated education award.
Section 2526.50 clarifies that the suspension of an individual's
eligibility to use an education award as a result of the conviction of
the possession or sale of a controlled substance does not constitute a
valid reason for the extension of the seven-year period for using an
education award.
The sections in part 2528 describe the uses of and the procedures
for using education awards. The regulations in these sections are
designed to ensure that the necessary documentation and verification
are obtained at each stage of the process without imposing too great a
burden on holders of qualified student loans, institutions of higher
education, participants, or the Corporation.
Part 2529 describes the procedures for participants to obtain
forbearance in the repayment of qualified student loans and for the
Corporation to pay interest expenses that accrue during such periods of
forbearance. Similar to the regulations in part 2528, the regulations
in this part are designed to ensure that the necessary documentation
and verification is obtained while minimizing administrative burdens.
Section 2529.20 clarifies that individuals who are eligible for a pro-
rated education awards or for pro-rated Stafford Loan Forgiveness also
are eligible for pro-rated payments of interest expenses based on the
portion of the term of service that was completed. The Corporation will
not, however, pay interest expenses that accrue during a period of
suspension of a term of service. Section 2529.30 clarifies that
different repayment requirements apply to VISTA volunteers.
Invitation to Comment
The Corporation invites written comments on the text of this
interim final rule and requests that the comments identify the specific
sections of the regulations to which they relate and provide reasons
for any suggested changes.
Miscellaneous Requirements
Interested parties should be advised that because the assistance
provided under the authority of this rule constitutes Federal financial
assistance for the purposes of title VI of the Civil Rights Act of 1964
(which bars discrimination based on race, color, or national origin),
title IX of the Education Amendments of 1972 (which bars discrimination
on the basis of gender), the Rehabilitation Act of 1973 (which bars
discrimination on the basis of disability), and the Age Discrimination
Act of 1975 (which bars discrimination on the basis of age), grantees
will be required to comply with the aforementioned provisions of
Federal law.
Grant recipients will be expected to expend Corporation grants in a
judicious and reasonable manner, consistent with pertinent provisions
of Federal law and regulations. Grantees must keep records according to
Corporation guidelines, including records that fully disclose the
amount and disposition of the proceeds of a Corporation grant. The
Inspector General of the Corporation (or other authorized official)
shall have access, for the purpose of audit and examination, to the
books and records of grantees that may be related or pertinent to the
Corporation grant.
Grantees should further be advised that Uniform Administrative
Requirements for Grants and Cooperative Agreements to State and Local
Governments, and Administrative Requirements for Grants and Cooperative
Agreements to other than State and Local Governments, as well as
regulations for the Privacy Act, Freedom of Information Act, Sunshine
Act, Government-wide Debarment and Suspension, and Government-wide
Requirements for Drug-Free Workplace will also be published.
As required by the Regulatory Flexibility Act, it is hereby
certified that this rule will not have a significant impact on small
business entities.
As required by the Paperwork Reduction Act of 1980, the Corporation
will submit the information collection requirements contained in this
rule to the Office of Management and Budget for its review (44 U.S.C.
3504(h)). The information collection requirements are needed in order
to provide assistance to parties affected by these regulations, in
accordance with statutory mandates.
(Catalog of Federal Domestic Assistance Numbers: 94.003 for State
Commissions, Alternative Administrative Entities, and Transitional
Entities; 94.004 for K-12 Service-Learning Programs; 94.005 for
Higher Education Service-Learning Programs; 94.006 for AmeriCorps
Programs; 94.007 for Investment for Quality and Innovation Programs)
List of Subjects
45 CFR Part 2525
Grant programs--social programs, Student aid, Volunteers.
45 CFR Part 2526
Grant programs--social programs, Student aid, Volunteers.
45 CFR Part 2527
Grant programs--social programs, Student aid, Volunteers.
45 CFR Part 2528
Grant programs--social programs, Student aid, Volunteers.
45 CFR Part 2529
Grant programs--social programs, Student aid, Volunteers.
Dated: June 7, 1994.
Terry Russell,
General Counsel.
Accordingly, the Corporation amends title 45, chapter XXV of the
Code of Federal Regulations by adding parts 2525 through 2529 to read
as follows:
PART 2525--NATIONAL SERVICE TRUST: PURPOSE AND DEFINITIONS
Sec.
2525.10 What is the National Service Trust?
2525.20 Definitions.
Authority: 42 U.S.C. 12601-12604.
Sec. 2525.10 What is the National Service Trust?
The National Service Trust is an account in the Treasury of the
United States from which the Corporation makes payments of education
awards, Stafford loan forgiveness awards, and pays interest that accrue
on qualified student loans for AmeriCorps participants during terms of
service in approved AmeriCorps positions.
Sec. 2525.20 Definitions.
In addition to the definitions in Sec. 2510.20 of this chapter, the
following definitions apply to terms used in parts 2525 through 2529 of
this chapter:
Approved school-to-work program. The term approved school-to-work
program means a school-to-work program officially approved by the
Secretaries of the Departments of Education and Labor.
Cost of attendance. The term cost of attendance has the same
meaning as in title IV of the Higher Education Act of 1965, as amended
(20 U.S.C. 1070 et. seq.).
Education award. The term education award means the financial
assistance available under parts 2526 through 2528 of this chapter for
which an individual in an approved AmeriCorps position--except for an
individual in a Stafford Loan Forgiveness program (SLF program)--may be
eligible.
Holder. The term holder means--
(1) The original lender; or
(2) Any other entity to whom a loan is subsequently sold,
transferred, or assigned if such entity acquires a legally enforceable
right to receive payments from the borrower.
Institution of higher education. For the purposes of parts 2525
through 2529 of this chapter, the term institution of higher education
has the same meaning given the term in section 481(a) of the Higher
Education Act of 1965, as amended (20 U.S.C. 1088(a)).
Qualified student loan. The term qualified student loan means any
loan made, insured, or guaranteed pursuant to title IV of the Higher
Education Act of 1965 (20 U.S.C. 1070 et. seq.), other than a loan to a
parent of a student pursuant to section 428B of such Act (20 U.S.C.
1078-2), and any loan made pursuant to title VII or VIII of the Public
Service Health Act (42 U.S.C. 292a et. seq.).
Term of service. The term term of service means--
(1) For AmeriCorps participants other than VISTA volunteers, any of
the terms of service specified in Sec. 2522.220 of this chapter; and
(2) For VISTA volunteers, not less than a full year of service as a
VISTA volunteer.
PART 2526--ELIGIBILITY TO RECEIVE AND USE EDUCATIONAL BENEFITS
Sec.
2526.10 What types of AmeriCorps educational benefits are
available?
2526.20 Who is eligible to receive a full education award from the
National Service Trust?
2526.30 Who is eligible to receive a full Stafford loan forgiveness
award from the National Service Trust?
2526.40 Is an AmeriCorps participant who does not complete a term
of service eligible to receive a pro-rated education or Stafford
loan forgiveness award?
2526.50 What conditions must an AmeriCorps participant who has
received an education award meet in order to use that education
award?
2526.60 How do convictions for the possession or sale of controlled
substances affect an education award recipient's ability to use that
award?
2526.70 What is the time period during which an individual must use
an education award?
2526.80 How many education or Stafford loan forgiveness awards may
an individual receive?
2526.90 May an individual receive an education or Stafford loan
forgiveness award and loan cancellations for the same service?
2526.100 How are education and Stafford loan forgiveness awards
treated in determining eligibility for financial assistance under
the Higher Education Act of 1965, as amended?
Authority: 42 U.S.C. 12601-12604.
Sec. 2526.10 What types of AmeriCorps educational benefits are
available?
Individuals serving in approved AmeriCorps positions may be
eligible to receive either AmeriCorps education awards or Stafford loan
forgiveness awards, but may not receive both awards for the same term
of service.
Sec. 2526.20 Who is eligible to receive a full education award from
the National Service Trust?
(a) General. To receive a full education award from the National
Service Trust, an AmeriCorps participant must meet the eligibility
requirements for, and successfully complete the required term of
service in, an approved AmeriCorps position, including approved
AmeriCorps positions in the VISTA program established by the Domestic
Volunteer Service Act of 1973 (42 U.S.C. 4950 et. seq.) and the
National Civilian Community Corps program established by the National
and Community Service Act of 1990.
(b) Conditions. (1) For any term of service, a VISTA Volunteer who
successfully completes his or her required term of service is only
eligible to receive an education award from the National Service Trust
if he or she does not accept the postservice stipend authorized under
section 105(a)(1) of the Domestic Volunteer Service Act of 1973.
(2) For any term of service, a National Civilian Community Corps
participant who successfully completes his or her required term of
service is only eligible to receive an education award from the
National Service Trust if he or she does not accept the alternative
benefit described in section 158(g) of the National and Community
Service Act of 1990.
Sec. 2526.30 Who is eligible to receive a full Stafford loan
forgiveness award from the National Service Trust?
An individual who successfully completes a term of service in an
approved AmeriCorps position in a Stafford Loan Forgiveness program is
eligible to receive a full Stafford loan forgiveness award.
Sec. 2526.40 Is an AmeriCorps participant who does not complete a term
of service eligible to receive a pro-rated education or Stafford loan
forgiveness award?
(a) An individual who is released from a term of service for
compelling personal circumstances, in accordance with Sec. 2522.230(a)
of this chapter, is eligible to receive a pro-rated education or
Stafford loan forgiveness award as determined according to
Sec. 2527.10(d)(1) of this chapter if--
(1) The individual completed at least fifteen percent of his or her
required term of service prior to the release; and
(2) The program chooses to provide the individual with a pro-rated
education or Stafford loan forgiveness award pursuant to
Sec. 2522.230(a)(1) of this chapter rather than permitting the
individual to complete the remainder of the term of service after a
temporary suspension of service pursuant to Sec. 2522.230(a)(2) of this
chapter.
(b) Programs are encouraged, when appropriate, to suspend service
rather than offer prorated educational benefits.
(c) An individual who is released from a term of service for cause
in accordance with Sec. 2522.230(b) of this chapter is not eligible for
any portion of an education or Stafford loan forgiveness award.
(d) A VISTA volunteer who does not complete a term of service as a
result of the early closure of the project in which he or she is
serving is eligible to receive a pro-rated education award as
determined according to Sec. 2527.10(d)(1) of this chapter.
Sec. 2526.50 What conditions must an individual who has received an
education award meet in order to use that education award?
An individual who receives an education award is eligible to use
the award if the individual--
(a) Has received a high school diploma or its equivalent, is
enrolled at an institution of higher education, or has received a
waiver based on an individual education assessment conducted by the
AmeriCorps program in which the individual participated;
(b) Is a citizen, national, or permanent resident alien of the
United States; and
(c) Is not eligible to use the education award under Sec. 2526.40
as a result of a conviction of the possession or sale of a controlled
substance.
Sec. 2526.60 How do convictions for the possession or sale of
controlled substances affect an education award recipient's ability to
use that award?
(a) Except as provided in paragraph (b) of this section, a
recipient of an education award who is convicted under pertinent
Federal or State law of the possession or sale of a controlled
substance is not eligible to use his or her education award from the
date of the conviction until the end of a specified time period, which
is determined based on the type of conviction as follows:
(1) For conviction of the possession of a controlled substance, the
ineligibility periods are--
(i) One year for a first conviction;
(ii) Two years for a second conviction; and
(iii) For a third or subsequent conviction, indefinitely, as
determined by the Corporation according to the following factors--
(A) Type of controlled substance;
(B) Amount of controlled substance;
(C) Whether firearms or other dangerous weapons were involved in
the offense;
(D) Nature and extent of any other criminal record;
(E) Nature and extent of any involvement in trafficking of
controlled substances;
(F) Length of time between offenses;
(G) Employment history;
(H) Service to the community;
(I) Recommendations from community members and local officials,
including experts in substance abuse and treatment; and
(J) Any other relevant aggravating or ameliorating circumstances.
(2) For conviction of the sale of a controlled substance, the
ineligibility periods are--
(i) Two years for a first conviction; and
(ii) Two years plus such additional time as the Corporation
determines as appropriate for second and subsequent convictions, based
on the factors set forth in paragraphs (a)(1)(iii) (A) through (J) of
this section.
(b) (1) If the Corporation determines that an individual who has
had his or her eligibility to use the education award suspended
pursuant to paragraph (a) of this section has successfully completed a
legitimate drug rehabilitation program, or in the case of a first
conviction that the individual has enrolled in a legitimate drug
rehabilitation program, the individual's eligibility to use the
education award will be restored.
(2) In order for the Corporation to determine that the requirements
of paragraph (b)(1) of this section have been met--
(i) The drug rehabilitation program must be recognized as
legitimate by appropriate Federal, State or local authorities; and
(ii) The individual's enrollment in or successful completion of the
legitimate drug rehabilitation program must be certified by an
appropriate official of that program.
Sec. 2526.70 What is the time period during which an individual must
use an education award?
(a) General requirement. An individual must use an education award
within seven years of the date on which the individual successfully
completes a term of service, unless the individual applies for and
receives an extension in accordance with the requirements of paragraph
(b) of this section.
(b) Extensions. In order to receive an extension of the seven-year
time period for using an education award, an individual must apply to
the Corporation for an extension prior to the end of that time period.
The Corporation will grant an application for an extension under the
following circumstances:
(1) If the Corporation determines that an individual was performing
another term of service in an approved AmeriCorps position during the
seven-year period, the Corporation will grant an extension for a time
period that is equivalent to the time period during which the
individual was performing the other term of service.
(2) If the Corporation determines that an individual was
unavoidably prevented from using the education award during the seven-
year period, the Corporation will grant an extension for a period of
time that the Corporation deems appropriate. An individual who is
ineligible to use an education award as a result of the individual's
conviction of the possession or sale of a controlled substance under
Sec. 2526.40 is not considered to be unavoidably prevented from using
the education award for the purposes of this paragraph.
Sec. 2526.80 How many education or Stafford loan forgiveness awards
may an individual receive?
An individual may receive an education or Stafford loan forgiveness
award for each of up to two terms of service. For the purposes of this
section, full-time, part-time and reduced part-time terms of service
described in Sec. 2522.220 of this chapter are each considered terms of
service.
Sec. 2526.90 May an individual receive an education or Stafford loan
forgiveness award and loan cancellations for the same service?
No. Although an education award may be used to repay qualified
student loans pursuant to Sec. 2528.20 of this chapter, an individual
may not receive an education or Stafford loan forgiveness award for a
term of service and have that same service credited toward repayment of
other student loans.
Sec. 2526.100 How are education and Stafford loan forgiveness awards
treated in determining eligibility for financial assistance under the
Higher Education Act of 1965, as amended?
Institutions of higher education shall consider education and
Stafford loan forgiveness awards neither as income in calculating
expected family contributions nor as estimated financial assistance in
packaging assistance under the Higher Education Act of 1965, as amended
(20 U.S.C. 1070 et seq.).
PART 2527--AMOUNT OF AMERICORPS EDUCATIONAL BENEFITS
Sec.
2527.10 How are the amounts of the education and Stafford loan
forgiveness awards determined?
Authority: 42 U.S.C. 12601-12604.
Sec. 2527.10 How are the amounts of the education and Stafford loan
forgiveness awards determined?
(a) Education awards for full-time service. The education award for
full-time service is equal to 90 percent of--
(1) One-half of an amount equal to the aggregate basic educational
assistance allowance provided in 38 U.S.C. 3015(b)(1) (as in effect on
July 28, 1993), for the period referred to in 38 U.S.C. 3013(a)(1) (as
in effect on July 28, 1993), for a member of the Armed forces who is
entitled to such an allowance under 38 U.S.C. 3011 and whose initial
obligated period of active duty is two years; less
(2) One-half of the aggregate basic contribution required to be
made by the member in 38 U.S.C. 3011(b) (as in effect on July 28,
1993).
(b) Stafford loan forgiveness awards for full-time service. The
Stafford loan forgiveness award for a full-time participant in a
Stafford Loan Forgiveness program is equal to 15 percent of that
greater of--
(1) That participant's current Stafford loan obligations that were
incurred during the final two years of that participant's undergraduate
education; or
(2) That participant's current Stafford loan obligations that were
incurred during the most recent two years of that participant's
graduate education in a teaching program.
(c) Part-time service. The education and Stafford loan forgiveness
awards for part-time terms of service are equal to one-half of the
corresponding full-time education and Stafford loan forgiveness awards
described in paragraphs (a) and (b) of this section.
(d) Incomplete or reduced terms of service. (1) The education or
Stafford loan forgiveness awards for individuals who are released from
a term of service for compelling personal circumstances and are
eligible for a pro-rated full- or part-time education or Stafford loan
forgiveness award in accordance with the requirements in Sec. 2526.40
of this chapter, or for VISTA volunteers who are released due to the
early of a project, are equal to the product of--
(i) The ratio of the portion of the term of service completed to
the required term of service; and
(ii) The amount of the full- or part-time education award available
for that term of service as determined pursuant to paragraph (a), (b)
or (c) of this section.
(2) The education award for individuals serving in a reduced part-
time term of service described in Sec. 2522.220 of this chapter is
equal to the product of--
(i) The ratio of the number of hours of service required for the
reduced part-time term of service to 900; and
(ii) The amount of the part-time education or Stafford loan
forgiveness award as determined pursuant to paragraph (c) of this
section.
(e) Authority to aggregate awards. An individual who serves two
terms of service in a Stafford loan forgiveness program(s) may elect
(prior to the end of the first such term of service) to aggregate the
two Stafford loan forgiveness awards that the individual receives such
that the individual receives a single Stafford loan forgiveness award
at the end of the second term of service that is equal to the sum of
the awards for each of the terms. An individual who wishes to aggregate
his or her Stafford loan forgiveness awards must comply with the
procedural requirements of Sec. 2528.60 of this chapter.
PART 2528--USES OF AND PROCEDURES FOR USING EDUCATIONAL BENEFITS
Sec.
2528.10 For what purposes may education awards be used?
2528.20 What are the procedural requirements for using education
awards to repay qualified student loans?
2528.30 What are the procedural requirements for using education
awards to pay for all or part of the cost of attendance at an
institution of higher education or to pay for expenses incurred in
participating in an approved school-to-work program?
2528.40 Is there a limit on the amount of an individual's education
award that the Corporation will disburse to an institution of higher
education for a given period of enrollment?
2528.50 What happens if an individual withdraws or fails to
complete the period of enrollment in an institution of higher
education or school-to-work program for which the Corporation has
disbursed all or part of that individual's education award?
2528.60 What are the procedural requirements for using a Stafford
loan forgiveness award to repay Stafford loans?
Authority: 42 U.S.C. 12601-12604.
Sec. 2528.10 For what purposes may education awards be used?
(a) Education awards may be used--
(1) To repay qualified student loans or portions thereof in
accordance with Sec. 2528.20:
(2) To pay all or part of the cost of attendance at an institution
of higher education in accordance with Secs. 2528.30 through 2528.50;
and
(3) To pay expenses incurred in participating in approved school-
to-work programs in accordance with Sec. 2528.60.
(b) Education awards are divisible and may be applied to any
combination of those loans, costs and expenses described in paragraph
(a) of this section.
Sec. 2528.20 What are the procedural requirements for using education
awards to repay qualified student loans?
(a) In order to use an education award to repay qualified student
loans, the recipient of the award must submit an application to the
Corporation, in a manner prescribed by the corporation that:
(1) Identifies, or permits the Corporation to identify, the holder
or holders of the loans;
(2) Indicates, or permits the Corporation to determine, the amounts
of principal and interest outstanding on the loans;
(3) Specifies, if the outstanding balance of the principal on the
loans is greater than the amount to be disbursed by the Corporation,
which of the loans the individual prefers to have paid; and
(4) Contains whatever other information the Corporation may
require.
(b) Upon receipt of an application under paragraph (a) of this
section, the Corporation will notify each holder of a loan that has
been designated for payment in the individual's application and will
identify any information or documentation that the holder must provide
to the corporation before the Corporation will make payment.
(c) When the Corporation receives all required information from the
holder of the loan, the Corporation will pay the holder of the loan in
accordance with the instructions in the application of the education
award recipient and will notify the recipient of the payment.
(d) The Corporation may establish procedures to aggregate payments
to holders of loans for more than a single individual.
Sec. 2528.30 What are the procedural requirements for using education
awards to pay for all or part of the cost of attendance at an
institution of higher education or to pay for expenses incurred in
participating in an approved school-to-work program?
(a) In order to use an education award to pay for the cost of full-
time or part-time attendance at an institution of higher education or
to pay for expenses incurred in participating in an approved school-to-
work program, the recipient of an award must submit an application to
the institution of higher education or school-to-work program in which
the individual is or will be enrolled, on a form prescribed by the
Corporation, that contains such information as the Corporation may
require to verify that the individual is a recipient of and eligible to
use an education award.
(b) An institution of higher education or approved school-to-work
program that receives one or more applications submitted in accordance
with the requirements of paragraph (a) of this section shall submit to
the Corporation, in a manner prescribed by the Corporation, a statement
that--
(1) Identifies each eligible individual filing an application;
(2) Specifies the amounts for which such eligible individuals are
qualified;
(3)(i) For institutions of higher education, certifies that--
(A) The institution of higher education has in effect a program
participation agreement under section 487 of the Higher Education Act
of 1965;
(B) The institution's eligibility to participate in any of the
programs under title IV of such Act has not been limited, suspended, or
terminated; and
(C) Individuals using education awards to pay for the cost of
attendance at that institution do not comprise more than 15 percent of
the total student population of the institution;
(ii) For school-to-work programs, certifies that the program has
been approved by the Departments of Education and Labor;
(4) Indicates the costs of attendance or participation for any
period(s) of enrollment for which the individual(s) are applying the
education award(s); and
(5) Contains such provisions concerning financial compliance as the
Corporation may require in the application.
(c) When the Corporation receives a statement from an institution
of higher education or a school-to-work program in accordance with the
requirements of paragraph (b) of this section, the Corporation will pay
a first installment for the first period of enrollment, which shall be
not more than half of the total monetary value of the education awards
that the individuals identified on the institution's statement are
scheduled to receive. The Corporation will pay installments for each
subsequent period of enrollment upon receipt of statements updating the
information required under paragraph (b) of this section for the
relevant period of enrollment.
Sec. 2528.40 Is there a limit on the amount of an individual's
education award that the Corporation will disburse to an institution of
higher education for a given period of enrollment?
Yes. The Corporation's disbursement from an individual's education
award for any period of enrollment may not exceed the difference
between--
(a) The individual's cost of attendance for that period of
enrollment, determined in accordance with section 472 of the Higher
Education Act of 1965; and
(b) The sum of--
(1) The student's estimated financial assistance for that period
under part A of title IV of such Act; and
(2) The student's veterans' education benefits, determined in
accordance with section 480(c) of such Act.
Sec. 2528.50 What happens if an individual withdraws or fails to
complete the period of enrollment in an institution of higher education
or school-to-work program for which the Corporation has disbursed all
or part of that individual's education award?
(a) (1) An institution of higher education or school-to-work
program that receives a disbursement of education award funds from the
Corporation must have in effect a fair and equitable refund policy that
includes procedures for providing a refund to the Corporation if an
individual for whom the Corporation has disbursed education award funds
withdraws or otherwise fails to complete the period of enrollment at
that institution or program for which the assistance was provided.
(2) (i) For purposes of this section, an institution of higher
education's refund policy is deemed ``fair and equitable'' if it is
consistent with the requirements of paragraphs (b) and (c) of section
484B of the Higher Education Act of 1965, as amended.
(ii) For the purposes of this section, a school-to-work program's
refund policy is deemed ``fair and equitable'' if it complies with any
standards that may be developed by the Departments of Education and
Labor.
(b) The Corporation credits to the individual's education award
allocation in the National Service Trust the amount of any refund
received for that individual under paragraph (a) of this section.
Sec. 2528.60 What are the procedural requirements for using a Stafford
loan forgiveness award to repay Stafford loans?
(a) In order to apply a Stafford loan forgiveness award to the
repayment of a Stafford loan(s), a participant in an AmeriCorps
Stafford Loan Forgiveness program must submit an application to the
Corporation that--
(1) Identifies the holder or holders of the participant's Stafford
loans as described in Sec. 2527.10(b) of this chapter;
(2) Indicates the amounts of outstanding principal and the rates of
interest on those loans;
(3) Indicates, where appropriate, to which of the loans the
individual would prefer to apply the Stafford loan forgiveness award;
(4) If the participant serves two terms of service in a Stafford
Loan Forgiveness program, indicates whether the participant wishes to
aggregate the Stafford loan forgiveness awards pursuant to
Sec. 2527.10(e) of this chapter; and
(5) Contains whatever other information the Corporation may
require.
(b) When a participant receives a Stafford loan forgiveness award,
the Corporation will notify each holder of a Stafford loan identified
in the participant's application of the portion of the loan that the
Corporation will repay and will identify any information or
documentation that the holder must provide to the Corporation.
(c) When the Corporation receives all required information from the
holder of the loan(s) pursuant to paragraph (b) of this section, the
Corporation will pay the holder(s) an amount determined according to
Sec. 2527.10 of this chapter and will notify the participant of the
payment.
(d) The Corporation may establish procedures to aggregate payments
to holders of Stafford loans for more than one individual.
PART 2529--FORBEARANCE AND INTEREST PAYMENT PROCEDURES
Sec.
2529.10 What are the procedural requirements for obtaining
forbearance in the repayment of a qualified student loan during an
individual's term of service in an approved AmeriCorps position?
2529.20 What are the procedural requirements for using National
Service Trust funds to pay interest that accrues on a qualified
student loan for which an individual has obtained forbearance?
2529.30 What additional student loan forbearance benefits are
available for VISTA volunteers?
Authority: 42 U.S.C. 12601-12604.
Sec. 2529.10 What are the procedural requirements for obtaining
forbearance in the repayment of a qualified student loan during an
individual's term of service in an approved AmeriCorps position?
(a) In order to obtain forbearance in the repayment of a qualified
student loan during a term of service in an approved AmeriCorps
position, an individual, other than a VISTA volunteer, must submit a
written request to the holder of the loan.
(b) Upon receipt of a request under paragraph (a) of this section,
the holder of a qualified student loan must contact the Corporation to
verify that the individual is serving in an approved AmeriCorps
position and to determine the period for which the holder must grant
forbearance.
(c) The holder shall grant forbearance in the repayment of a
qualified student loan for the period of an individual's required term
of service after obtaining the verification required under paragraph
(b) of this section.
(d) The holder shall promptly report to the Corporation each
individual and loan for which it grants forbearance, the period for
which it has granted forbearance, and the projected amount of interest
that will accrue on the loan during the period of forbearance.
(e) If an individual who has obtained forbearance on a qualified
student loan(s) does not complete his or her term of service, or if
that individual's term of service is suspended, the Corporation will
promptly notify the holder(s) of that loan(s).
(f) The holder is not required to grant forbearance in the
repayment of qualified student loans for any period during which an
individual's service in an approved AmeriCorps position has been
suspended.
Sec. 2529.20 What are the procedural requirements for using National
Service Trust funds to pay interest that accrues on a qualified student
loan for which an individual has obtained forbearance?
The Corporation will make payments from the National Service Trust
for interest that accrues on qualified student loans for which an
individual, other than a VISTA volunteer, has obtained forbearance
under Sec. 2529.10 in accordance with the following requirements:
(a) Completed terms of service. (1) If an individual successfully
completes a term of service, the Corporation will notify the holder of
the individual's loan of the date of completion; the holder shall
document the accrued interest expense to the Corporation; and the
Corporation will pay all or a portion of the accrued interest and
notify the individual and the holder of the loan of the payment.
(2) The percentage of the accrued interest that the Corporation
will pay pursuant to paragraph (a)(1) of this section is equal to the
lesser of--
(i) The product of--
(A) The required number of hours for the term of service divided by
the total number of days for which forbearance was granted; and
(B) 365 divided by 17; and
(ii) 100.
(b) Incomplete terms of service. (1) If an individual does not
successfully complete a term of service, but is eligible for a pro-
rated educational benefits under Sec. 2527.10(c) of this chapter or
pro-rated Stafford Loan Forgiveness under Sec. 2522.650(c) of this
chapter, the Corporation will notify the holder of the loan if the date
of the individual's release, the holder of the loan shall document to
the Corporation the amount of accrued interest as of the date of the
release, and the Corporation will pay all or a portion of such interest
and notify the individual and the holder of the loan of the payment.
(2) The percentage of the accrued interest that the Corporation
will pay pursuant to paragraph (b)(1) of this section is equal to
lesser of--
(i) The product of--
(A) The number of hours of service completed divided by the number
of days for which forbearance was granted; and
(B) 365 divided by 17; and
(ii) 100.
(3) The individual is responsible for the repayment of any accrued
interest that is not paid by the Corporation pursuant to paragraph
(b)(2) of this section.
(4) If the individual does not successfully complete the required
term of service and is not eligible for a pro-rated education award
under Sec. 2527.10(c) of this chapter or pro-rated Stafford Loan
Forgiveness under Sec. 2522.605(c) of this chapter, the Corporation
will notify the holder of the loan of the circumstances and date of the
individual's release but will pay no portion of the accrued interest.
(c) Suspended service. The Corporation will not pay any interest
expenses that accrue on an individual's qualified student loan(s)
during a period of suspended service.
Sec. 2529.30 What additional student loan forbearance benefits are
available for VISTA volunteers?
(a) VISTA volunteers may be eligible to have periodic installment
payments of principal deferred for up to three years during periods of
economic hardship, in accordance with the Higher Education Act of 1965,
as amended.
(b) VISTA volunteers also may qualify for interest benefits on
Stafford loans from the Department of Education under 34 CFR 682.301.
[FR Doc. 94-14231 Filed 6-14-94; 8:45 am]
BILLING CODE 6820-BA-M
