[Code of Federal Regulations]

[Title 34, Volume 3]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 34CFR673.4]



[Page 555-556]

 

                           TITLE 34--EDUCATION

 

 CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION

 

PART 673_GENERAL PROVISIONS FOR THE FEDERAL PERKINS LOAN PROGRAM, FEDERAL 

 

  Subpart B_General Provisions for the Federal Perkins Loan, FWS, and 

                             FSEOG Programs

 

Sec. 673.4  Allocation and reallocation.



    (a) Allocation and reallocation of Federal Perkins Loan funds. (1) 

The Secretary allocates Federal capital contributions to institutions 

participating in the Federal Perkins Loan Program in accordance with 

section 462 of the HEA.

    (2) The Secretary reallocates Federal capital contributions to 

institutions participating in the Federal Perkins Loan Program by--

    (i) Reallocating 80 percent of the total funds available in 

accordance with section 462(j) of the HEA; and

    (ii) Reallocating 20 percent of the total funds available in a 

manner that best carries out the purposes of the Federal Perkins Loan 

Program.

    (b) Allocation and reallocation of FWS funds. The Secretary 

allocates and reallocates funds to institutions participating in the FWS 

Program in accordance with section 442 of the HEA.

    (c) Allocation and reallocation of FSEOG funds. (1) The Secretary 

allocates funds to institutions participating in the FSEOG program in 

accordance with section 413D of the HEA.

    (2) The Secretary reallocates funds to institutions participating in 

the FSEOG Program in a manner that best carries out the purposes of the 

FSEOG Program.



[[Page 556]]



    (d) General allocation and reallocation--(1) Categories. As used in 

section 462 (Federal Perkins Loan Program), section 442 (FWS Program), 

and section 413D (FSEOG Program) of the HEA, ``Eligible institutions 

offering comparable programs of instruction'' means institutions that 

are being compared with the applicant institution and that fall within 

one of the following six categories:

    (i) Cosmetology.

    (ii) Business.

    (iii) Trade/Technical.

    (iv) Art Schools.

    (v) Other Proprietary Institutions.

    (vi) Non-Proprietary Institutions.

    (2) Payments to institutions. The Secretary allocates funds for a 

specific period of time. The Secretary provides an institution its 

allocation in accordance with the payment methods described in 34 CFR 

668.162.

    (3) Unexpended funds. (i) If an institution returns more than 10 

percent of its Federal Perkins Loan, FWS, or FSEOG allocation for an 

award year, the Secretary reduces the institution's allocation for that 

program for the second succeeding award year by the dollar amount 

returned.

    (ii) The Secretary may waive the provision of paragraph (d)(3)(i) of 

this section for a specific institution if the Secretary finds that 

enforcement would be contrary to the interests of the program.

    (iii) The Secretary considers enforcement of paragraph (d)(3)(i) of 

this section to be contrary to the interest of the program only if the 

institution returns more than 10 percent of its allocation due to 

circumstances beyond the institution's control that are not expected to 

recur.

    (e) Anticipated collections of Federal Perkins Loan funds. (1) For 

the purposes of calculating an institution's share of any excess 

allocation of Federal Perkins Loan funds, an institution's anticipated 

collections are equal to the amount that was collected by the 

institution during the second year preceding the beginning of the award 

period multiplied by 1.21.

    (2) The Secretary may waive the provision of paragraph (e)(1) of 

this section for any institution that has a cohort default rate that 

does not exceed 7.5 percent.

    (f) Authority to expend FWS funds. Except as specifically provided 

in 34 CFR 675.18 (b), (c), and (f), an institution may not use funds 

allocated or reallocated for an award year--

    (1) To meet FWS wage obligations incurred with regard to an award of 

FWS employment made for any other award year; or

    (2) To satisfy any other obligation incurred after the end of the 

designated award year.

    (g) Authority to expend FSEOG funds. Except as specifically provided 

in 34 CFR 668.164(g), an institution shall not use funds allocated or 

reallocated for an award year--

    (1) To make FSEOG disbursements to students in any other award year; 

or

    (2) To satisfy any other obligation incurred after the end of the 

designated award year.



(Authority: 20 U.S.C. 1070b-3 and 1087bb, 42 U.S.C. 2752)