[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: 34CFR685.300]



[Page 852-853]

 

                           TITLE 34--EDUCATION

 

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

 

PART 685_WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM--Table of Contents

 

Subpart C_Requirements, Standards, and Payments for Direct Loan Program 

                                 Schools

 

Sec. 685.300  Agreements between an eligible school and the Secretary 

for participation in the Direct Loan Program.





    (a) General. (1) Participation of a school in the Direct Loan 

Program means that eligible students at the school may receive Direct 

Loans. To participate in the Direct Loan Program, a school shall--

    (i) Demonstrate to the satisfaction of the Secretary that the school 

meets the requirements for eligibility under the Act and applicable 

regulations; and

    (ii) Enter into a written program participation agreement with the 

Secretary that identifies the loan program or programs in which the 

school chooses to participate.

    (2) The chief executive officer of the school shall sign the program 

participation agreement on behalf of the school.

    (b) Program participation agreement. In the program participation 

agreement, the school shall promise to comply with the Act and 

applicable regulations and shall agree to--

    (1) Identify eligible students who seek student financial assistance 

at the institution in accordance with section 484 of the Act;

    (2) Estimate the need of each of these students as required by part 

F of the Act for an academic year. For purposes of estimating need, a 

Direct Unsubsidized Loan, a Direct PLUS Loan, or any loan obtained under 

any State-sponsored or private loan program may be used to offset the 

expected family contribution of the student for that year;

    (3) Certify that the amount of the loan for any student under part D 

of the Act is not in excess of the annual limit applicable for that loan 

program and that the amount of the loan, in combination with previous 

loans received by the borrower, is not in excess of the aggregate limit 

for that loan program;

    (4) Set forth a schedule for disbursement of the proceeds of the 

loan in installments, consistent with the requirements of section 428G 

of the Act;

    (5) Provide timely and accurate information to the Secretary for the 

servicing and collecting of loans--

    (i) Concerning the status of student borrowers (and students on 

whose behalf parents borrow) while these students are in attendance at 

the school;

    (ii) Upon request by the Secretary, concerning any new information 

of which the school becomes aware for these students (or their parents) 

after the student leaves the school; and

    (iii) Concerning student eligibility and need, for the alternative 

origination of loans to eligible students and parents in accordance with 

part D of the Act;

    (6) Provide assurances that the school will comply with requirements 

established by the Secretary relating to student loan information with 

respect to loans made under the Direct Loan Program;

    (7) Provide that the school will accept responsibility and financial 

liability stemming from its failure to perform its functions pursuant to 

the agreement;

    (8) Provide that eligible students at the school and their parents 

may participate in the programs under part B of the Act at the 

discretion of the Secretary for the period during which the school 

participates in the Direct Loan Program under part D of the Act, except 

that a student may not receive loans under both part D of the Act and 

part B of the Act for the same period of



[[Page 853]]



enrollment and a parent (borrowing for the same student) may not receive 

loans under both part D of the Act and part B of the Act for the same 

period of enrollment;

    (9) Provide for the implementation of a quality assurance system, as 

established by the Secretary and developed in consultation with the 

school, to ensure that the school is complying with program requirements 

and meeting program objectives;

    (10) Provide that the school will not charge any fees of any kind, 

however described, to student or parent borrowers for origination 

activities or the provision of any information necessary for a student 

or parent to receive a loan under part D of the Act or any benefits 

associated with such a loan; and

    (11) Comply with other provisions that the Secretary determines are 

necessary to protect the interests of the United States and to promote 

the purposes of part D of the Act.

    (c) Origination. (1) If a school or consortium originates loans in 

the Direct Loan Program, it shall enter into a supplemental agreement 

that--

    (i) Provides that the school or consortium will originate loans to 

eligible students and parents in accordance with part D of the Act; and

    (ii) Provides that the note or evidence of obligation on the loan is 

the property of the Secretary.

    (2) The chief executive officer of the school shall sign the 

supplemental agreement on behalf of the school.



(Authority: 20 U.S.C. 1087a et seq., 1094)



[59 FR 61690, Dec. 1, 1994, as amended at 64 FR 58970, Nov. 1, 1999]