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eral capital contributions, institutional degree, or (11) a first professional decapital contributions, repayments of gree, when at least 3 years of study
capital and interest, charges collected at the college level are required for enpursuant to g 144.8(h), and any other trance into a program leading to such earnings of the fund.
degree. (1) Federal capital contribution. (t) Satisfactory standing, good stand"Federal vital contribution" means ing. The terms "satisfactory standing" the capital portion contributed by the and "good standing" mean the eligibility Commissioner to a National Defense of a student to continue in attendance Loan Fund pursuant to section 203 of at the institution where he is enrolled as the Act.
a student in accordance with the institu(m) Federal institutional loan. "Fed tion's standards and practices. eral institutional loan" means a loan (u) Full-time teacher. "Full-time made by the Federal Government pur teacher" for the purpose of section suant to section 207 of the Act to an 205(b) (3) of the Act means: institution, the proceeds of which are to
(1) In the case of an elementary or be deposited by such institution in its
secondary school teacher, an individual National Defense Student Loan Fund.
professionally employed on a full-time (n) Institutional capital contribution.
basis, and regularly engaged in carrying "Institutional capital contribution" out the instructional programs of an means the money deposited into a Na
elementary or secondary school. While tional Defense Student Loan Fund by
the term generally includes classroom the institution in an amount not less teachers and their supervisors, it may than one-ninth of the Federal capital also include other personnel such as contributions thereto.
school librarians and guidance coun(0) National of the United States. selors meeting the above requirements; "National of the United States" means and (1) a citizen of the United States or (2)
(2) In the case of a teacher in an ina person who though not a citizen of
stitution of higher education, an individthe United States owes permanent al
ual professionally employed by such inlegiance to the United States (8 U.S.C.A stitution and who is regarded by the 1101(a) (22)).
institution for purposes of salary, tenure, (p) Full-time student. "Full-time academic rank, or similar purposes as student" means a student who is carry being engaged on a full-time basis in ing a full-time academic workload in activities primarily concerned with terms of course work or other required rendering direct and personal services activities as determined by the institu either in the instructional program or In tion.
a capacity directly related to the im(q) Full-time attendance. "Full-time provement of the students' educational attendance" means compliance by a full development at such institution. time student with the policies and reg (v) Elementary school. “Elementary ulations regarding attendance in effect
school” means a school which provides at the institution in which he is enrolled.
elementary education, as determined (r) Half-time student. "Half-time under State law or, if such school is not student,” or “student enrolled on at least in any State, as determined by the Coma half-time basis," means a student who missioner. is carrying at least one-half of the nor (w) Secondary school. “Secondary mal full-time academic workload as de
school" means a school which provides termined by the institution where he is secondary education, as determined unenrolled.
der State law or, if such school is not (s) Professional or graduate student.
in any State, as determined by the Com"Professional or graduate student”
missioner, except that it does not include means, in general, a student who is en
any education provided beyond grade 12. rolled in an academic program of in
(x) Academic year or its equivalent. struction above the college level which is
"Academic year or its equivalent" means: provided at an institution of higher edu
(1) In general, the number of credit cation. The term includes (1) that portion of any program involving a period
hours which a student must acquire durof study beyond 4 years of study at
ing any one school year in order to secure the college level, or (2) any portion of the degree or certificate toward which a program leading to (1) a degree be he is working in the number of semesters yond the bachelor's or first professional or terms normally taken therefor at the
institution where he is pursuing a course cation in all of the States. For the purof study; and
poses of this paragraph, the number of (2) For purposes of section 205(b) (3) persons enrolled on a full-time basis in of the Act, means any two complete se institutions of higher education shall be mesters, two complete trimesters or, determined by the Commissioner for the three complete quarters falling within a most recent year for which satisfactory school year of approximately 12 months data are available to him. duration.
(b) Reallotment. In the event that (y) Fiscal year. “Fiscal year” means the allotment for Federal capital contrithe Federal fiscal year commencing on butions made to a State under paragraph the 1st day of July and ending on the (a) of this section exceeds the total Fed30th day of June.
eral capital contributions made to the (z) Permanently and totally disabled. institutions within such State, for a given "Permanently and totally disabled" fiscal year, the unused portion of such means the inability to engage in any allotment may be reallotted from time substantial gainful activity because of to time, on such date or dates as the a medically determinable impairment, Commissioner may fix, to other States in which impairment is expected to con proportion to the original allotments to tinue for a long and indefinite period of such States for such fiscal year, except time, or to result in death, such disability that such reallotments shall be made to be determined on the basis of the re only (1) to the States in which allotments port of a physician on such forms as the are insufficient to meet the requests for Commissioner may prescribe.
Federal capital contributions which have (aa) Routine expenses. “Routine ex been reviewed and approved by the Compenses," for purposes
section missioner in accordance with § 144.4(a) 204(3) (C) of the Act, means the normal (3), and (2) to the extent necessary to or typical expenses incurred by the lend meet such requests in any such State. ing institution in its exercise of the gen
$ 144.4 Institutional applications. eral and normal administration of the National Defense Student Loan Program. (a) Applications for Federal capital This includes activities such as those in contributions. (1) Applications for Fedvolving receiving and processing appli eral capital contributions shall be filed cations for loans, approving of loans, by institutions in such form and manner accounting for and reporting Fund trans as may be prescribed by the Commisactions, and normal collection efforts. sioner. (bb) Other collection costs. "Other
(2) The Commissioner shall from time collection costs," for purposes of section to time issue a notice setting a date by 204 (3) (D) of the Act, means such extra
which an institution must file the appliidentifiable costs of collection that are cation in order to be eligible to receive in excess of the routine expenses incurred a Federal capital contribution for the in the collection of student loan notes, period stated in such notice. but does not include costs of employing (3) The amount requested in each apindividual contractors or agents to han plication for a Federal Capital contribudle collection duties that reasonably may tion shall be reviewed and approved by be expected to be performed by the lend the Commissioner for the purposes of ing institution's own personnel.
section 203(a) of the Act in the light of
the demands which may reasonably be $ 144.3 Allotment and reallotment of Federal capital contributions to
expected to be made upon the Fund durStates.
ing the period covered by the application
after taking into consideration the bal(a) Allotment. From sums appro
ance in the Fund. When necessary to priated for Federal capital contributions this end the Commissioner may require for any fiscal year ending prior to July 1, the submittal of additional data. 1968, the Commissioner shall allot to (b) Application for Federal institueach State an amount which bears the tional loan. (1) Each application for & same ratio to the amount so appro
Federal institutional loan shall include priated pursuant to section 201 of the a statement of supporting data on which Act, as the number of persons enrolled there shall be provided such informaon a full-time basis in institutions in tion as the Commissioner may require each of such States bears to the total (including information relative to the number of persons enrolled on a full terms and conditions under which such time basis in institutions of higher edu funds are available from non-Federal
sources) in order to make the necessary ground; and (v) include such other prodeterminations under section 207(a) of visions as may be necessary to protect the Act.
the financial interest of the United (2) The amount requested in each ap States and promote the purposes of this plication for a Federal institutional loan part and as are agreed to by the Comshall be reviewed and approved by the missioner and the institution. Commissioner in the light of the require
& 144.5 Federal institutional loan agreements of section 207(a) of the Act and
ments. the amount of the Federal capital contribution that has been reviewed and ap Federal institutional loans shall be proved in accordance with paragraph made subject to the terms of a note (a) (3) of this section.
which shall be executed by an official who (c) Agreement for Federal capital is duly authorized to execute such notes contributions. (1) The institutional on behalf of the borrowing institution. application to participate in the National Such loans shall be used only for instituDefense Student Loan Program shall also tional capital contributions to the borinclude a proposed agreement, signed by rower's National Defense Student Loan an authorized representative of the ap
Fund. Each such note shall include such plicant institution, which shall be sub terms with respect to the payment of inmitted for consideration and concur terest and repayment of capital as are not rence by the Commissioner.
inconsistent with section 207(a) of the (2) No application for a Federal cap Act and shall include such other terms ital contribution or for a Federal insti
which the Commissioner finds necessary tutional loan shall be approved unless to protect the financial interest of the there is in effect an agreement between United States and to promote the purthe Commissioner and the applicant in poses of the Act. stitution for Federal capital contribu
$ 144.6 Allocation and payment of Fed. tions pursuant to section 204 of the Act.
eral capital contributions and Fed. (3) The agreement shall provide for
eral institutional loans. the following items: (1) Establishment of a Student Loan Fund by the institu
(a) Allocation of Federal capital contion; (11) deposit in the Fund of (a)
tributions to institutions. (1) Federal the Federal capital contributions, (b)
capital contributions will be offered to
institutions within a State in relation to the institutional capital contributions, equal to not less than one-ninth of the
the amount of the requests for Federal Federal contributions, (c) collections of
capital contributions that have been reprincipal and interest on student loans
viewed and approved in accordance with made from the Fund, (d) charges col
$ 144.4(a) (3). In the event that the total lected pursuant to section 205(c) of the
of such requested amounts in all the apAct, and (e) other earnings of the Fund;
plications for the Federal capital con(111) that the Fund be used only for (a)
tributions from a State exceeds that loans to students in accordance with the
State's current allotment therefor, the agreement, (b) capital distributions as
amount of the Federal capital contribuprovided in section 206 of the Act, (c)
tion that can be made available to any routine expenses incurred by the insti
applicant institution from that allotment tution in administering the Fund, not
shall bear the same ratio to such reexceeding the lesser of either one-half
quested amount as the amount of the of the routine expenses as estimated for
State's allotment bears to the total of that year by the Commissioner or one
such requested amounts within the State. per centum of the aggregate of the out
(2) In the event that an institution standing loans made from the fund as
which has applied for a Federal Instituof the close of that year, and (d) costs of
tional loan is unable to secure the neceslitigation, and other collection costs
sary amount of loan funds from the Comagreed to by the Commissioner arising
missioner or otherwise to secure such in connection with the collection of a
funds as may be required in order to loan, the interest thereon or a charge
make the necessary institutional capital assessed with respect to the loan pur
contribution, the amount of the Federal suant to section 205(c) of the Act; (iv) capital contribution which could have that in the selection of students to re been offered to such institution pursuant ceive loans from such student loan fund to subparagraph (1) of this paragraph special consideration shall be given to shall be reduced to an amount equal to students with a superior academic back not more than nine times the amount of
such institutional capital contribution dergraduate student at the institution; as the institution is able to make to the (3) is capable, in the opinion of the inFund.
stitution, of maintaining good standing (3) If an institution fails to accept all in such course of study; and (4) has been of the Federal capital contributions that accepted for enrollment as at least a have been offered to it, the amount rep half-time student at such institution or, resented by such unaccepted offer shall in the case of a student already attendbe restored as part of the State's allot ing such institution, is in good standing ment.
and is enrolled on at least a half-time (4) When funds that have been re basis at such institution. stored as a part of a State's allotment are (b) Determination of need. In detersufficient to increase significantly the mining a student's need for a loan from amount of the Federal capital contribu the Fund, the institution shall where tion that can be made available to other appropriate take into consideration (1) Institutions within the State, they shall the income, assets, and resources of the be offered to such institutions whose re applicant, (2) the income, assets, and quests for Federal capital contributions resources of the applicant's family, and were reduced pursuant to subparagraphs (3) the cost reasonably necessary for (1) and (2) of this paragraph.
the student's attendance at the institu(b) Allocation of Federal institutional tion, including any special needs and loans. (1) Federal institutional loans obligations which directly affect the stushall be made by the Commissioner upon dent's financial ability to attend such the basis of his review of the data that institution. All determination of need are provided to him in the application shall be made in accordance with the for a Federal institutional loan.
policies and procedures established by (2) In the event that the funds avail. the institution and made a part of the able for the purpose of making Federal agreement for Federal capital contriinstitutional loans are insufficient to butions. satisfy the requests to which institutions (c) Limitations governing maximum would otherwise be entitled in accord amount of loans. In accordance with ance with § 144.4(b) (2), the Commis section 205(a) of the Act (1) the loans sioner shall allocate such available funds advanced from any Fund or Funds to a among all of such requests therefor in student for any “academic year or its the same ratio as the amount of each equivalent” (as defined in § 144.2(x)) such request bears to the sums of the may not exceed a total of $2,500 in the amounts of all such requests.
case of a professional or graduate stu(3) If an institution fails to accept all dent, $1,000 in the case of all other stuof the funds that would otherwise be dents; and (2) the total of all such loans loaned to it, the Commissioner shall re to a student (regardless of the nature allocate such unaccepted funds to other of his enrollment when received) may institutions if the amount of such funds not exceed $10,000 in the case of a gradis sufficient to increase significantly the uate or professional student and $5,000 size of the loans to such other institu in the case of all other students. This tions.
statutory limit on the amount of loans (c) Payments of Federal capital con which may be made in any "academic tributions and institutional loans. Pay year or its equivalent” will be complied ment of the Federal capital contribu with if either (3) not more than $2,500 tions and institutional loans shall be is advanced to a professional or gradumade in such amounts and at such times ate student or $1,000 to any other stuas the Commissioner shall designate. dent during any 12-month school period
(normally beginning in September) or § 144.7 Eligibility and selection of loan
(4) the total of the sums advanced to & recipients.
student during any such period does (a) Eligibility—in general. Loans
not exceed an amount which bears the shall be made only to a student who (1)
same ratio to the number of credit hours is a national of the United States or is in the United States for other than a tem
for which the student borrower is regisporary purpose and intends to become a
tered during such period as $1,000 (or permanent resident thereof; (2) is in
$2,500, in the case of a graduate or proneed of the amount of the loan to pursue
fessional student) multiplied by the sum A course of study on at least a half-time of the academic years or their equivbasis as a graduate, professional, or un alent leading to the degree or certificate
bears to the total sum of credit hours if the borrower so requests, in gradurequired to earn such a degree.
ated periodic installments determined in (d) Selection—in general. Loans accordance with such schedules as may from the Fund shall be made reasonably be approved by the Commissioner) payavailable (to the extent permitted by the able quarterly, bimonthly, or monthly Fund and subject to the provisions of (at the option of the institution) over a section 204(4) of the Act) to all eligible period beginning 9 months after the applicants. In the event applications ex date on which the borrower ceases to ceed available funds, the order of selec carry, at an institution of higher edu
tion shall be made on the basis of objec cation or at a comparable institution : tive criteria established by the institu outside the States approved for this pur
tion and made a part of the agreement pose by the Commissioner, at least onefor Federal capital contributions.
half the normal full-time academic (e) Selection-Nondiscrimination. No workload as determined by the institueligible applicant shall be denied a stu tion in which he is enrolled, and ending dent loan from the Fund on account of 10 years and 9 months after such date. sex, race, creed, color, or national origin. Selection of a repayment plan shall be
(f) Selection special considerations. made prior to the date on which the In the selection of students to receive student ceases to be enrolled on at least loans from the Fund, special considera
a half-time basis at the lending instition shall be given to students with supe
tution. rior academic backgrounds.
(d) Accelerated repayment. Any stu(g) Records of approval or disapprov dent borrower may, at his option, and al. The records of the institution shall
without penalty, repay all or any part of indicate the basis of approval or disap
the principal and accrued interest at e proval (including any special considera
any time. ition given) of all or any part of each stu
(e) Minimum rate of repayment. dent application for a loan.
The institution may provide if the
scheduled adopted pursuant to para$ 144.8 Advancement and repayment of
graph (c) of this paragraph provides for loans.
repayments at a rate of less than $15 (a) Evidence of indebtedness; note. per month, and if the total of repayAn loans shall be evidenced by a promis ments required of the student on all sory note executed by a student borrower loans made pursuant to this part does which shall be in a form meeting the not exceed the rate of $15 per month, requirements of section 205(b) of the Act. that during the repayment period of the The Commissioner shall from time to loan, payments of principal and interest time make available a promissory note by the borrower with respect to all the form which meets the statutory require outstanding loans made to him from ments. Except for a provision reflecting loan funds established pursuant to this an institution's election to require secu part shall be at a rate equal to not less rity or endorsement in cases permitted than $15 per month. under paragraph (b) of this section, any (f) Deferment of repayment. Intersubstantive deviation from the provisions est shall not accrue on any such loan, of the most current promissory note and installments need not be paid durform made available by the Commis ing any period (1) during which the sioner must be approved by the Commis borrower is carrying, at an Institution of sioner prior to the making of any loans higher education or at a comparable into be evidenced thereby. A copy of stitution outside the States approved for every executed note shall be supplied to this purpose by the Commissioner, at the student maker thereof.
least one-half the normal full-time aca(b) Security. Neither security nor demic workload as determined by the endorsement may be required except institution, (2) not in excess of 3 years, that, if the borrower is a minor and if during which the borrower is a member
under the State law the note executed of the Armed Forces of the United States, There by him would not create a binding obli
and (3) not in excess of 3 years during gation, the Institution is permitted to
which the borrower is in service either require security or endorsement.
as a volunteer under the Peace Corps (c) Repayment. The note evidencing
Act, or a volunteer (VISTA) under secthe loan shall provide for repayment of
tion 603 of the Economic Opportunity the principal amount, together with in Act of 1964; except that this provision terest thereon, in equal installments (or, does not apply to any loan outstanding