[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: 34CFR674.13]

[Page 574]
 
                           TITLE 34--EDUCATION
 
 CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION
 
PART 674_FEDERAL PERKINS LOAN PROGRAM--Table of Contents
 
                      Subpart A_General Provisions
 
Sec. 674.13  Reimbursement to the Fund.

    (a) The Secretary may require an institution to reimburse its Fund 
in an amount equal to that portion of the outstanding balance of--
    (1) A loan disbursed by the institution to a borrower in excess of 
the amount that the borrower was eligible to receive, as determined on 
the basis of information the institution had, or should have had, at the 
time of disbursement; or
    (2) Except as provided in paragraph (b) of this section, a defaulted 
loan with regard to which the institution failed--
    (i) To record or retain the loan note in accordance with the 
requirements of this part;
    (ii) To record advances on the loan note in accordance with the 
requirements of this part; or
    (iii) To exercise due diligence in collecting in accordance with the 
requirements of this part.
    (b) The Secretary does not require an institution to reimburse its 
Fund for the portion of the outstanding balance of a defaulted loan 
described in paragraph (a)(2) of this section--
    (1) That the institution--
    (i) Recovers from the borrower or endorser; or
    (ii) Demonstrates, to the Secretary's satisfaction, would not have 
been collected from the borrower even if the institution complied in a 
timely manner with the due diligence requirements of subpart C of this 
part; or
    (2) On which the institution obtains a judgment.
    (c) An institution that is required to reimburse its Fund under 
paragraph (a) of this section shall also reimburse the Fund for the 
amount of the administrative cost allowance claimed by the institution 
for that portion of the loans to be reimbursed.
    (d) An institution that reimburses its Fund under paragraph (a) of 
this section thereby acquires for its own account all the right, title 
and interest of the Fund in the loan for which reimbursement has been 
made.

(Approved by the Office of Management and Budget under control number 
1845-0019)

(Authority: 20 U.S.C. 1087dd-1087hh)

[52 FR 45747, Dec. 1, 1987, as amended at 59 FR 61407, Nov. 30, 1994; 64 
FR 58315, Oct. 28, 1999; 65 FR 65614, Nov. 1, 2000]