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on the effective dates of the Peace Corps Act or the Economic Opportunity Act of 1964 unless with the consent of the then obligee institution. Any such period shall not be included in determining the 10-year period in which the repayment must be completed. The institution may also provide that installments need not be paid during any period or periods, aggregating not in excess of 3 years, during which the borrower is in less than half-time attendance at an institution of higher education taking courses which are creditable toward a degree, and may also provide that any such period shall not be included in determining the 10year period during which the repayment must be completed, but interest shall continue to accrue during any such period.

(g) Revision of repayment schedule. In the event that a student who has borrowed from the Fund is unable, due to extraordinary circumstances, to comply with his obligations in regard thereto, he may make application to the institution to whose Fund he is indebted for revision of his schedule of repayment. Such application shall be reviewed by the institution for determination as to appropriate action to be taken and, where the action taken by the institution involves an extension beyond the 10-year period pursuant to section 205(b) (2) (C) of the Act, such action shall be reported to the Commissioner.

(h) Late payment charges. An institution may assess a charge with respect to a loan from the loan fund established by the institution pursuant to this part for failure of the borrower to pay all or any part of an installment when it is due, and in the case of a borrower who is entitled to deferment benefits under section 205(b) (2) of the Act, or cancellation benefits under section 205(b) (3) of the Act, for any failure to file timely and satisfactory evidence of such entitlement. The amount of any such charge may not exceed

(1) In the case of a loan which is repayable in monthly installments, $1 for the first month or part of a month by which such installment or evidence is late and $2 for each such month or part of a month thereafter; and

(2) In the case of a loan which has a bimonthly or quarterly repayment interval, $3 and $6, respectively, for each interval or part thereof by which such installment or evidence is late.

The institution may determine the time of assessment and collection of any such charges, except that no such charge may be added to the principal amount of the loan prior to the first day after the day on which such installment or evidence was due, and if not added to the principal amount of the loan, no such charge shall become payable prior to the due date of the next installment after receipt by the borrower of written notice thereof.

(i) Teacher cancellation. (1) For service as a full-time teacher in a public or other nonprofit elementary or secondary school in a State, in an institution of higher education, or in an elementary or secondary school overseas of the Armed Forces of the United States, except for any academic year for which a borrower is entitled to cancellation pursuant to subparagraph (2) of this paragraph, there shall be canceled, at the rate of 10 per centum of the total amount of his loan plus interest thereon for each complete academic year or its equivalent (as defined in section 144.2) of such service, an amount not to exceed 50 per centum of the total amount of his loan plus interest thereon.

(2) Commencing with the school year 1966-67, for service as a full-time teacher in a public or other nonprofit elementary or secondary school which is in the school district of a local educational agency eligible in that year for assistance pursuant to title II of P.L. 874, 81st Congress, as amended, and which for the purpose of this section and for that year has been determined by the Commissioner to be a school with a high concentration of students from lowincome families (as determined in accordance with $ 116.4 of this chapterFinancial Assistance to Local Educational Agencies for the Education of Children of Low-Income Families), a borrower may cancel his loan at the rate of 15 per centum of the total amount of his loan plus interest thereon for each complete academic year or its equivalent (as defined in § 144.2) of such service. The Commissioner's determination shall be based upon a ranking of such schools with a high concentration of students from low-income families, submitted by the State educational agency for the State in which the school is located, but in no event shall include more than 25 per centum of the total of the public and other nonprofit elementary and secondary schools of that State. Schools in eligible school districts shall be ranked

on the basis of objective standards and ance with section 205(b) (6) of the Act methods approved by the Commissioner because of the death of the borrower which take into account the numbers shall be made by the institution to whose and percentages of students from low Fund the borrower is indebted on the income families in attendance in such basis of a certificate of death or such schools. With respect to each school other official proof as is conclusive under year, the Commissioner shall ake avail State law. able to each State educational agency a

Fiscal. list of schools which have been deter

$ 144.11 mined to be those with a high concen (a) In general. The Fund shall be tration of students from low-income deposited and carried in a special acfamilies.

count of the institution, and shall be (3) Nothing in this section authorizes used only for the purposes designated in the refunding of any payment.

$ 144.4(c) (3). The Federal capital con[31 F.R. 7463, May 24, 1966; 31 F.R. 10575,

tribution shall be deposited promptly into Aug. 6, 1966)

the Fund with the full and proper

amount of the institution's capital con$ 144.9

Oath or a

tribution. There shall be in the Fund at In conformity with section 1001(f) of all times monies representing the instithe Act, no loan shall be made or funds tutional capital contribution equal to at advanced to any individual unless during least one-ninth of the amount of the the school year in which the loan or balance of the Federal capital contribuadvance is made such individual has tions in such Fund. taken and subscribed to an oath or af (b) Payment of loans. (1) Loans firmation in the following form:

from the Fund shall be made to studentI do solemnly swear (or affirm) that I

borrowers from the Fund in such installbear true faith and allegiance to the United ments as are deemed appropriate by the States of America and will support and de institution, except that no borrower may fend the Constitution and laws of the United receive more, during a given semester, States against all its enemies, foreign and term or quarter, than he needs for such domestic

period. $ 144.10 Provisions for loan cancella (2) No monies shall be advanced to tions.

any student-borrower from the Fund (a) Full-time teaching. The determi

unless at the time of such advancement

he is at least a half-time student. nation as to whether or not a studentborrower is entitled to have any portion

(3) Upon failure of a student-borof his loan canceled for service as a

rower to maintain satisfactory standing, full-time teacher in a public or other

the institution shall withhold any or all nonprofit elementary or secondary school

further installments of his loan as may within a State, in an institution of higher

be appropriate. education, in an elementary or sec

(c) Collection of loans. Each instiondary school overseas of the Armed

tution at which a Fund is established Forces of the United States in accordance

shall accept responsibility for and use due with section 205(b) (3) of the Act, shall

diligence in effecting collection of all be made by the institution to whose Fund

amounts due and payable to the Fund such loan is payable upon receipt and

in connection with loan transactions of evaluation of an application for cancel

the Fund. The institution shall use such lation from such student,

collection practices as are generally ac(b) Permanent and total disability.

cepted among institutions of higher eduDeterminations based on medical evi

cation and which are at least as extensive dence supplied by the borrower) as to

and forceful as those used in the collecwhether or not a student is entitled to a

tion of other student loan accounts due

the institution. In the exercise of due cancellation of indebtedness in accord

diligence, the institution shall: ance with section 205(b) (6) of the Act

(1) Conduct, whenever possible, an on the basis of permanent and total dis

exit interview with each borrower prior to ability shall be made by the institution to

separation and provide the borrower with whose Fund the borrower is indebted,

a copy of his repayment schedule (which subject to approval of the Commissioner. shall specify the dates and amounts of

(c) Death. The determination as to installments as they become due), whether or not a student is entitled to a (2) Maintain contact with borrower cancellation of indebtedness in accord after separation in order to facilitate bill

ing at the time the first installment falls due,

(3) Establish and maintain regular billing and followup procedures during the period in which any outstanding balance remains unpaid, and

(4) Establish such further collection procedures as the institution may consider appropriate to effect prompt and regular repayments.

(d) Records and reporting. (1) Each institution shall maintain, on a current basis, adequate records which reflect all transactions with respect to the Fund, and shall establish and maintain such general ledger control accounts and related subsidiary accounts as are prescribed by the Commissioner. Such records shall:

(i) Meet at least the minimum standards prescribed by the Commissioner as set forth in the most recent official National Defense Student Loan Program Manual of Policies and Procedures and other official guidelines that may be issued from time to time,

(ii) Be maintained in such a manner as to separately identify all Fund transactions from all other institutional funds and actvities,

(iii) Reflect the separate deposit into the Fund of Federal capital contributions and institutional capital contributions.

(iv) In instances where the institution exercises the option to assess charges for late payments of installments due or for late filing of required certificates of cancellation and/or deferment in accordance with § 144.8(h), reflect the payment of such charges through separate journal entries or in a separate ledger account.

(v) Reflect each transaction so as to afford ready identification of each borrower's account and status thereof, and

(vi) Contain full and proper documentation to support each cancellation entry for reason of death, permanent and total disability, or teaching service. If a fiscal agent is utilized by the institution, its function must be limited solely to the performance of ministerial acts. The responsibilities of the institution to make determinations relative to the making and collection of loans cannot be delegated.

(2) Institutions shall submit such reports and Information as the Commissioner may reasonably require in connection with the administration of the Act and shall comply with such provi

sions as he may find necessary to insure the correctness and verification of such reports. Annual reports of Fund status and transactions shall be forwarded to the Commissioner by each institution within thirty days of the close of each fiscal year.

(3) Institutions shall retain pertinent records of Fund activites, including oaths subscribed to pursuant to § 144.9, until such time as agreed upon with the Commissioner that there is no further need for retention.

(e) Internal controls. (1) The Fund shall be administered in each institution in such a manner as to provide for an adequate system of internal controls. Wherever practical, approval of loans, collection of loans, disbursement of loan funds, and recordkeeping shall be divided so as to prevent the handling of all aspects of the loan program by a single individual.

(2) Promissory notes arising out of student loan transactions must be adequately safeguarded and maintained in good order in a secure location which is preferably fireproof and can be locked when not in use. Only authorized personnel shall have access to these notes. $ 144.12 Compliance by institutions.

If, at any time, after notice and opportunity for hearing, the Commissioner determines (a) that the requirements for an institution's participation in the student loan program are no longer met, or (b) that any monies in the Fund or to be deposited therein have been expended for purposes for which the Fund is legally unavailable and such diversions have not been restored, or (c) it is determined by the Commissioner that the institution has not exercised due diligence in the administration and management of the Fund, no further Federal capital contributions shall be made to such Fund and no further expenditures shall be permitted to be made from such Fund until there is no longer any failure of such compliance. § 144.13 Preceding provisions not ex.

haustive of jurisdiction of the Com

missioner. No provision of this part now or hereafter promulgated shall be deemed exhaustive of the jurisdiction of the Commissioner under the Act. The provisions of this part may be modified or further regulations may be issued hereafter as circumstances may warrant.


PART 145-NATIONAL DEFENSE (h) “Approved program" means a GRADUATE FELLOWSHIP PROGRAM program of graduate study approved as

provided in $ 145.3. Sec.

(i) "Commissioner" means the U.S. 145.1 Definitions.

Commissioner of Education, Department 145.2 Summary of program. 145.3 Approval of graduate programs.

of Health, Education, and Welfare or his 145.4 Payments to institutions.

delegate. 145.5 Records substantiating payments.

(j) "Stipend" means the payments 145.6 Award of fellowships to individuals. made to a Fellow in accordance with 145.7 Payments of stipends.

section 404(a) of the Act (1) for each 145.8 Reports by institutions of higher edu

academic year of his study in an apcation. 145.9 Fellowships awarded after September

proved program and (2) on account of

each of his dependents. 22, 1961.

(k) “Academic year" consists of not AUTHORITY: The provisions of this part

less than two semesters or three quar145 issued under sections 401-405, 1001, 72

ters, beginning in the fall of the year, Stat. 1590–1591, 1602; 20 U.S.C. 461-465, 581.

and falling within a single twelve month SOURCE: The provisions of this Part 145 period. appear at 25 F.R. 9289, Sept. 29, 1960, unless otherwise noted.

$ 145.2 Summary of program. 8 145.1 Definitions.

(a) Purpose. The National Defense

Graduate Fellowship Program has the As used in this part:

objectives of increasing the facilities (a) "Act" means the National De

available for the graduate training of fense Education Act of 1958, Public Law

college or university level teachers, of 85–864, as amended, 72 Stat. 1580, 20

promoting a wider geographical distribuU.S.C. 401-589.

tion of such facilities throughout the (b) "Title IV” means title IV of such

United States, and of assisting persons Act.

interested in teaching in institutions of (c) "Institution of higher education"

higher education to obtain the Ph. D. or or "institution" means an educational in similar degree. stitution in any State which meets the

(b) Fellowship awards. The Commisrequirements set forth in section 103(b) sioner is authorized to award up to one of the Act. The term "educational In

thousand Fellowships during the fiscal stitution" limits the scope of this defini year ending June 30, 1959, and fifteen tion to establishments at which teaching

hundred Fellowships during each of the is conducted and which have an identity three succeeding fiscal years. A Fellowof their own. The separate identity of ship will usually be awarded for three such establishments is generally reflected academic years, but in any case will not by their being incorporated or chartered be for more than three academic years. for such purposes in their own right, or (c) Payments to fellows and instituby their receiving a separate listing in tions of higher education. Stipends to part III of the Ofice of Education "Edu

Fellows will be paid in accordance with cation Directory.”

$ 145.7. In addition, to the extent per(d) “Public" as applied to any institu mitted by $ 145.4, the Commissioner shall tion does not include an institution of make payments to institutions to cover any agency of the United States.

that portion of the cost of an approved (e) “Nonprofit” as applied to any insti graduate program which is reasonably tution means an institution owned and attributable to each Fellow. operated by one or more nonprofit cor (d) Approval of programs and allotporations or associations no part of the ment of fellowships. The Commissioner net earnings of which inures, or may will approve graduate programs at instilawfully inure, to the benefit of any pri tutions in accordance with $ 145.3, and vate shareholder or individual.

will determine the number of fellowships (f) "State" means a State, Puerto

to be allotted to each such program. Rico, the District of Columbia, the Canal Public announcement will be made listZone, Guam, or the Virgin Islands. ing the approved programs and the in

(g) "Fellowship" means an award by stitutions at which they are to be offered. the Commissioner under Title IV. A An individual desiring a Fellowship "Fellowship holder" or "Fellow" means a

should apply for acceptance as described person designated to receive the award, in $ 145.6 at the Institution of his choice which entitles him to receive the stipend. from among those listed.

$ 145.3 Approval of graduate programs. (e) Dates for applying. Each year a (a) Minimum requirements for ap

date will be announced for the submisproval of programs. The programs to be

sion of applications by institutions for approved will be selected from those:

the approval of a new or expanded pro(1) For the completion of which a gram to accommodate those who will Ph. D. or similar degree is awarded;

be awarded Fellowships in the ensuing (2) Which constitute a new or ex

period. Institutions of higher education panded program of graduate study; may secure forms for application from (3) Which substantially further the

Division of Higher Education, Office of objective of increasing the facilities

Education, Department of Health, Eduavailable in the Nation for the graduate

cation, and Welfare, Washington 25, training of college or university level

D.C. teachers;

(f) Criteria for the selection of ap(4) Which promote a wider geograph proved programs. The following criteria ical distribution of facilities for the

will be considered in determining which graduate training of college or university

of the programs meeting the foregoing level teachers throughout the Nation;

requirements are to be approved: and

(1) The prospective ability of the ap(5) In which a preference in the ac

plying institution, in terms of faculty, eeptance of persons for study is given

libraries, and equipment, competently to to persons interested in teaching in in

offer the program; stitutions of higher education.

(2) Current or prospective national or (b) Applications. Approval of gradu

regional shortage of college or university ate programs shall be on the basis of

teachers in the proposed field; applications submitted by institutions of

(3) Current or prospective national or higher education in accordance with regional inadequacies in the offering of procedures established by the Commis proposed subjects; sioner. Applications shall contain infor (4) Adequate ratio, at the applying mation as to the proposed increase in

institution, between the number of grad. facilities and/or faculty for the estab uate faculty and the proposed number of lishment of the new program or expan

graduate students; sion of an existing program and shall

(5) The amount and extent of the apindicate the total increase in enrollment

plying institution's previous planning (or total enrollment in the case of a new and development in the field proposed program) which the increase in facili

in the program; ties and/or faculty will enable the pro

(6) Likelihood that the applying instigram to accommodate. The proposed

tution will be able soundly to support the development of the program should nor proposed program on a long-term basis; mally be such as to make possible the

(7) Likelihood that the proposed proadmission of sufficient first-year students gram will produce teachers for institueach year to achieve the total anticipated tions of higher education, increase in enrollment (or total antici (g) Notification of Commissioner's acpated enrollment in the case of a new

tion. The Commissioner will notify each program) within three years.

institution of higher education which (c) Organization of programs. Pro has applied for approval of a graduate grams may be organized by an institu program whether such approval has been tion in any manner appropriate to the given, and if so, the number of Fellowfield of study of the program, including ships which the Commissioner is prebut not restricted to: departmental, e.g.,

pared to allot for such program. Political Science; a special field within (h) Effect of approval. Approval of a a department, e.g. Political Theory; in program is effective during any period in terdepartmental, e.g. Psychology and which a Fellowship holder is enrolled in Politics; or intercollege, e.g. Law and the program, unless approval is withPolitics.

drawn, as provided in paragraph (j) of (d) Joint institutional sponsorship. this section. Continued approval of a Two or more institutions may jointly program does not necessarily mean, howsubmit a program for approval. The ever, that new Fellowships will be application must be signed by an author awarded to students enrolling in the proized representative of each institution, gram in any given year. and it must be agreed that credits earned (1) Number of fellowships to be al. at each of the institutions are fully lotted. In determining the number of transferable to the other.

Fellowships to be allotted to an Approved

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