[Code of Federal Regulations]
[Title 34, Volume 3]
[Revised as of July 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 34CFR673.7]

[Page 565-566]
 
                           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. 673.7  Administrative cost allowance.

    (a) An institution participating in the Federal Perkins Loan, FWS, 
or FSEOG programs is entitled to an administrative cost allowance for an 
award year if it advances funds under the Federal Perkins Loan Program, 
provides FWS employment, or awards grants under the FSEOG Program to 
students in that year.
    (b) An institution may charge the administrative cost allowance 
calculated in accordance with paragraph (c) of this section for an award 
year against-(1) The Federal Perkins Loan Fund, if the institution 
advances funds under the Federal Perkins Loan Program to students in 
that award year;
    (2) The FWS allocation, if the institution provides FWS employment 
to students in that award year; and
    (3) The FSEOG allocation, if the institution awards grants to 
students under the FSEOG program in that award year.
    (c) For any award year, the amount of the administrative costs 
allowance equals--
    (1) Five percent of the first $2,750,000 of the institution's total 
expenditures to students in that award year under the FWS, FSEOG, and 
the Federal Perkins Loan programs; plus
    (2) Four percent of its expenditures to students that are greater 
than $2,750,000 but less than $5,500,000; plus
    (3) Three percent of its expenditures to students that are 
$5,500,000 or more.
    (d) The institution shall not include, when calculating the 
allowance in paragraph (c) of this section, the

[[Page 566]]

amount of loans made under the Federal Perkins Loan Program that it 
assigns during the award year to the Secretary under section 463(a)(6) 
of the HEA.
    (e) An institution shall use its administrative costs allowance to 
offset its cost of administering the Federal Pell Grant, FWS, FSEOG, and 
Federal Perkins Loan programs. Administrative costs also include the 
expenses incurred for carrying out the student consumer information 
services requirements of subpart D of the Student Assistance General 
Provisions regulations, 34 CFR part 668.
    (f) An institution may use up to 10 percent of the administrative 
costs allowance, as calculated under paragraph (c) of this section, that 
is attributable to the institution's expenditures under the FWS program 
to pay the administrative costs of conducting its program of community 
service. These costs may include the costs of--
    (1) Developing mechanisms to assure the academic quality of a 
student's experience;
    (2) Assuring student access to educational resources, expertise, and 
supervision necessary to achieve community service objectives; and
    (3) Collaborating with public and private nonprofit agencies and 
programs assisted under the National and Community Service Act of 1990 
in the planning, development, and administration of these programs.
    (g) If an institution charges any administrative cost allowance 
against its Federal Perkins Loan Fund, it must charge these costs during 
the same award year in which the expenditures for these costs were made.

(Authority: 20 U.S.C. 1070b-2, 1087cc, and 1096, 42 U.S.C. 2753)