[Code of Federal Regulations]
[Title 34, Volume 3]
[Revised as of July 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 34CFR682.423]

[Page 814-815]
 
                           TITLE 34--EDUCATION
 
 CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION
 
PART 682_FEDERAL FAMILY EDUCATION LOAN (FFEL) PROGRAM--
Table of Contents
 
 Subpart D_Administration of the Federal Family Education Loan Programs
                          by a Guaranty Agency
 
Sec. 682.423  Guaranty agency Operating Fund.

    (a) Establishment and control. A guaranty agency must establish and
maintain an Operating Fund in an account separate from the Federal Fund.
Except for funds that have been transferred from the Federal Fund, the
Operating Fund is considered the property of the guaranty agency. During
periods in which the Operating Fund contains funds transferred from the
Federal Fund, the Operating Fund may be used only as permitted by
Sec. Sec. 682.410(a)(2) and 682.418.
    (b) Deposits. The guaranty agency must deposit into the Operating
Fund--
    (1) Amounts authorized by the Secretary to be transferred from the
Federal Fund;
    (2) Account maintenance fees;
    (3) Loan processing and issuance fees;
    (4) Default aversion fees;
    (5) 30 percent of administrative cost allowances received on or
after October 1, 1998 for loans upon which insurance was issued before
October 1, 1998;
    (6) The portion of the amounts collected on defaulted loans that
remains after the Secretary's share of collections has been paid and the
complement of the reinsurance percentage has been deposited into the
Federal Fund;
    (7) The agency's share of the payoff amounts received from the
consolidation or rehabilitation of defaulted loans; and
    (8) Other receipts as authorized by the Secretary.
    (c) Uses. A guaranty agency may use the Operating Fund for--
    (1) Guaranty agency-related activities, including--
    (i) Application processing;
    (ii) Loan disbursement;
    (iii) Enrollment and repayment status management;
    (iv) Default aversion activities;
    (v) Default collection activities;
    (vi) School and lender training;
    (vii) Financial aid awareness and related outreach activities; and

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    (viii) Compliance monitoring; and
    (2) Other student financial aid-related activities for the benefit
of students, as selected by the guaranty agency.

(Authority: 20 U.S.C. 1072-2)

[64 FR 58635, Oct. 29, 1999]