AmeriCorps education awards,

[Federal Register: July 12, 1999 (Volume 64, Number 132)]

[Rules and Regulations]

[Page 37411-37417]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr12jy99-9]

CORPORATION FOR NATIONAL AND COMMUNITY SERVICE

45 CFR Parts 2522, 2525, 2526, 2527, 2528, and 2529

RIN 3045-AA09

AmeriCorps Education Awards

AGENCY: Corporation for National and Community Service.

ACTION: Final rule.

SUMMARY: The Corporation adopts interim rules published on June 15, 1994, regarding AmeriCorps education awards as final rules. The Corporation is also issuing final rules amending several provisions relating to the AmeriCorps education award, including those governing a participant's eligibility and the ways in which a participant may use the award. These changes will promote efficiency and consistency in providing education awards to AmeriCorps participants.

DATES: The final rules are effective August 11, 1999.

FOR FURTHER INFORMATION CONTACT: Gary Kowalczyk, Coordinator of National Service Programs, Corporation for National and Community Service, (202) 606-5000, ext. 340. T.D.D. (202) 565-2799.

SUPPLEMENTARY INFORMATION:

Background

Through this document, the Corporation adopts as final, with changes, rules regarding AmeriCorps education awards. On March 23, 1994 (59 FR 13772), the Corporation published final rules covering its grant programs, including general provisions regarding the provision of a partial education award for participants who are released because of compelling personal circumstances before completing their terms of service. On June 15, 1994 (59 FR 30709), the Corporation published interim final rules for the National Service Trust governing the AmeriCorps education award and related interest benefits. The Corporation did not receive any comments from the public concerning the interim rules. The Corporation published a proposed rule on April 9, 1999 (64 FR 17302), designed to clarify the rules applicable to the determination of compelling personal circumstances as well as several National Service Trust rules concerning the education award.

Discussion of the Final Rule

The proposed rule gave the public sixty days to submit comments. The Corporation received comments from two persons.

Welfare to Work Transition as Compelling Personal Circumstances

One commenter expressed concern that allowing programs to approve a pro-rated education award for welfare recipients who enroll as AmeriCorps members and thereafter leave their term of service as part of a transition from welfare (e.g., to accept permanent employment) would undermine both an ethic of work and an ethic of service and might cause morale problems among other members who are not welfare recipients. The Corporation has concluded that, on balance, the overriding public policy objective of fostering self-sufficiency among welfare recipients outweighs these concerns.

Transfers by Members From One Program To Another

One commenter urged the Corporation to include in its rules guidance on transfers by members between programs. The commenter believes that this is necessary to ensure consistent policies and procedures in this area. The Corporation believes that these policies and procedures do not rise to the level of a regulation and may be addressed through avenues other than a rule.

Release for Cause

One commenter stated that the Corporation had proposed a definition of ``for cause'' that is too broad. The commenter also objected to the removal

[[Page 37412]]

of a requirement that programs explicitly state in advance the circumstances under which members may be released for cause. The Corporation believes that definition of ``for cause'' is consistent with the statutory framework. Section 139(c) of the National and Community Service Act (42 U.S.C. 12593(c)) recognizes only two types of releases from completing a term of service: (1) For compelling personal circumstances; and (2) for cause. The rules spell out in detail the types of situations that constitute compelling personal circumstances and provide that a release for cause ``encompasses any circumstances other than compelling personal circumstances that warrant an individual's release from completing a term of service.'' This does not provide programs unlimited discretion to release a member for cause for any reason other than compelling personal circumstances or convert members into an ``at will'' status. The rule requires that the reason be sufficient to ``warrant an individual's release from completing a term of service.'' If a member objects to such a determination, the member may pursue a grievance through the process available under the Act to all members.

Benefits for Reinstated Members

One commenter objected to the elimination of a requirement that all members who are reinstated as part of a grievance be credited with missed service hours and be paid the full amount of living allowance withheld during the grievance process. Because there may be instances in which it may not be equitable or appropriate to require a program to provide a reinstated member with credit for missed service hours and the amount of withheld living allowance, the Corporation believes that the statutory grievance process is a better mechanism to resolve these issues on an case-by-case basis.

Explanation of Change Regarding Fair and Equitable Refund Policy Requirement

In several sections regarding the requirement that educational institution receiving disbursements from the National Service Trust first provide verification that they have in effect a fair and equitable refund policy consistent with section 484B of the Higher Education Act of 1965 (20 U.S.C. 1091b), the Corporation has added a reference to the relevant U.S. Department of Education regulations. This reference is informational and is intended to improve clarity.

Implementation

These rules will apply to any member who enrolls in a position approved by the Corporation beginning the 1999-2000 program year.

Regulatory Matters

Executive Order 12866

Because this regulatory action makes only minor amendments to existing rules and will involve only small adjustments in operating national service programs, the Corporation has determined that it is not a ``significant'' rule within the meaning of Executive Order 12866 because it is not likely to result in: (1) An annual effect on the economy of $100 million or more, or an adverse and material effect on a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal government or communities; (2) the creation of a serious inconsistency or interference with an action taken or planned by another agency; (3) a material alteration in the budgetary impacts of entitlement, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) the raising of novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in Executive Order 12866.

In addition, the Corporation has concluded that the benefits of this regulatory action (greater consistency, predictability, and equity) outweigh the relatively small costs of implementing the changes.

Regulatory Flexibility Act

Because this regulatory action makes only minor amendments to existing rules and will involve only small adjustments in operating national service programs, the Corporation certifies that it will not result in (1) an annual effect on the economy of $100 million or more; (2) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or (3) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. Therefore, the Corporation has not performed the regulatory flexibility analyses that are required under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) for major rules that are expected to have such results.

Other Impact Analyses

Because the rules do not authorize any information collection activity outside the scope of existing regulations, this regulatory action is not subject to review and approval under the Paperwork Reduction Act of 1995 (44 U.S.C. 3500 et seq.). If the Corporation proposes to modify any of the forms used in connection with determining eligibility of individuals for payments from the National Service Trust, the Corporation will comply with clearance procedures as provided under the Paperwork Reduction Act.

For purposes of Title II of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538, as well as Executive Order 12875, this regulatory action does not contain any federal mandate that may result in increased expenditures in either Federal, State, local, or tribal governments in the aggregate, or impose an annual burden exceeding $100 million on the private sector.

This regulatory action does not establish requirements that will adversely affect the Year 2000 readiness of national service programs.

List of Subjects

45 CFR Part 2522

AmeriCorps, Grant programs--social programs, Reporting and recordkeeping requirements, Volunteers.

45 CFR Part 2525

Grant programs--social programs, Student aid, Volunteers.

45 CFR Part 2526

Grant programs--social programs, Student aid, Volunteers.

45 CFR Part 2527

Grant programs--social programs, Student aid, Volunteers.

45 CFR Part 2528

Grant programs--social programs, Student aid, Volunteers.

45 CFR Part 2529

Grant programs--social programs, Student aid, Volunteers.

Accordingly, the Corporation for National and Community Service adopts as final its interim rule adding 45 CFR parts 2525, 2526, 2527, 2528, and 2529, published in the Federal Register at 59 FR 30709, June 15, 1994, and amends 45 CFR chapter XXV as follows:

[[Page 37413]]

PART 2522--AMERICORPS PARTICIPANTS, PROGRAMS, AND APPLICANTS

1. The authority citation for part 2522 continues to read as follows:

   Authority: 42 U.S.C. 12501 et seq.

2. Section 2522.200 is revised to read as follows:

   Sec. 2522.200 What are the eligibility requirements for an AmeriCorps participant?

   (a) Eligibility. An AmeriCorps participant must--

   (1)(i) Be at least 17 years of age at the commencement of service; or

   (ii) Be an out-of-school youth 16 years of age at the commencement of service participating in a program described in Sec. 2522.110(b)(3) or (g);

   (2)(i) Have a high school diploma or its equivalent; or

   (ii) Not have dropped out of elementary or secondary school to enroll as an AmeriCorps participant and must agree to obtain a high school diploma or its equivalent prior to using the education award; or

   (iii) Obtain a waiver from the Corporation of the requirements in paragraphs (a)(2)(i) and (a)(2)(ii) of this section based on an independent evaluation secured by the program demonstrating that the individual is not capable of obtaining a high school diploma or its equivalent; or

   (iv) Be enrolled in an institution of higher education on an ability to benefit basis and be considered eligible for funds under section 484 of the Higher Education Act of 1965 (20 U.S.C. 1091);

   (3) Be a citizen, national, or lawful permanent resident alien of the United States.

   (b) Primary documentation of status as a U.S. citizen or national. The following are acceptable forms of certifying status as a U.S. citizen or national:

   (1) A birth certificate showing that the individual was born in one of the 50 states, the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa, or the Northern Mariana Islands;

   (2) A United States passport;

   (3) A report of birth abroad of a U.S. Citizen (FS-240) issued by the State Department;

   (4) A certificate of birth-foreign service (FS 545) issued by the State Department;

   (5) A certification of report of birth (DS-1350) issued by the State Department;

   (6) A certificate of naturalization (Form N-550 or N-570) issued by the Immigration and Naturalization Service; or

   (7) A certificate of citizenship (Form N-560 or N-561) issued by the Immigration and Naturalization Service.

   (c) Primary documentation of status as a lawful permanent resident alien of the United States. The following are acceptable forms of certifying status as a lawful permanent resident alien of the United States:

   (1) Permanent Resident Card, INS Form I-551;

   (2) Alien Registration Receipt Card, INS Form I-551;

   (3) A passport indicating that the INS has approved it as temporary evidence of lawful admission for permanent residence; or

   (4) A Departure Record (INS Form I-94) indicating that the INS has approved it as temporary evidence of lawful admission for permanent residence.

   (d) Secondary documentation. If primary documentation is not available, the program must obtain written approval from the Corporation that other documentation is sufficient to demonstrate the individual's status as a U.S. citizen, U.S. national, or lawful permanent resident alien.

3. Section 2522.230 is revised to read as follows:

   Sec. 2522.230 Under what circumstances may AmeriCorps participants be released from completing a term of service, and what are the consequences?

   An AmeriCorps program may release a participant from completing a term of service for compelling personal circumstances as demonstrated by the participant, or for cause.

   (a) Release for compelling personal circumstances. (1) An AmeriCorps program may release a participant upon a determination by the program, consistent with the criteria listed in paragraphs (a)(5) through (a)(6) of this section, that the participant is unable to complete the term of service because of compelling personal circumstances.

   (2) A participant who is released for compelling personal circumstances and who completes at least 15 percent of the required term of service is eligible for a pro-rated education award.

   (3) The participant has the primary responsibility for demonstrating that compelling personal circumstances prevent the participant from completing the term of service.

   (4) The program must document the basis for any determination that compelling personal circumstances prevent a participant from completing a term of service.

   (5) Compelling personal circumstances include:

   (i) Those that are beyond the participant's control, such as, but not limited to:

   (A) A participant's disability or serious illness;

   (B) Disability, serious illness, or death of a participant's family member if this makes completing a term unreasonably difficult or impossible; or

   (C) Conditions attributable to the program or otherwise unforeseeable and beyond the participant's control, such as a natural disaster, a strike, relocation of a spouse, or the nonrenewal or premature closing of a project or program, that make completing a term unreasonably difficult or impossible;

   (ii) Those that the Corporation, has for public policy reasons, determined as such, including:

   (A) Military service obligations;

   (B) Acceptance by a participant of an opportunity to make the transition from welfare to work; or

   (C) Acceptance of an employment opportunity by a participant serving in a program that includes in its approved objectives the promotion of employment among its participants.

   (6) Compelling personal circumstances do not include leaving a program:

   (i) To enroll in school;

   (ii) To obtain employment, other than in moving from welfare to work or in leaving a program that includes in its approved objectives the promotion of employment among its participants; or

   (iii) Because of dissatisfaction with the program.

   (7) As an alternative to releasing a participant, an AmeriCorps*State/National program may, after determining that compelling personal circumstances exist, suspend the participant's term of service for up to two years (or longer if approved by the Corporation based on extenuating circumstances) to allow the participant to complete service with the same or similar AmeriCorps program at a later time.

   (b) Release for cause. (1) A release for cause encompasses any circumstances other than compelling personal circumstances that warrant an individual's release from completing a term of service.

   (2) AmeriCorps programs must release for cause any participant who is convicted of a felony or the sale or distribution of a controlled substance during a term of service.

   (3) A participant who is released for cause may not receive any portion of the AmeriCorps education award or any other payment from the National Service Trust.

   (4) An individual who is released for cause must disclose that fact in any subsequent applications to participate in an AmeriCorps program. Failure to

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   do so disqualifies the individual for an education award, regardless of whether the individual completes a term of service.

   (5) An AmeriCorps*State/National participant released for cause may contest the program's decision by filing a grievance. Pending the resolution of a grievance procedure filedby an individual to contest a determination by a program to release the individual for cause, the individual's service is considered to be suspended. For this type of grievance, a program may not--while the grievance is pending or as part of its resolution--provide a participant with federally-funded benefits (including payments from the National Service Trust) beyond those attributable to service actually performed, without the program receiving written approval from the Corporation.

   (c) Suspended service. (1) A program must suspend the service of an individual who faces an official charge of a violent felony (e.g., rape, homicide) or sale or distribution of a controlled substance.

   (2) A program must suspend the service of an individual who is convicted of possession of a controlled substance.

   (3) An individual may not receive a living allowance or other benefits, and may not accrue service hours, during a period of suspension under this provision.

   (d) Reinstatement. (1) A program may reinstate an individual whose service was suspended under paragraph (c)(1) of this section if the individual is found not guilty or if the charge is dismissed.

   (2) A program may reinstate an individual whose service was suspended under paragraph (c)(2) of this section only if the individual demonstrates the following:

   (i) For an individual who has been convicted of a first offense of the possession of a controlled substance, the individual must have enrolled in a drug rehabilitation program;

   (ii) For an individual who has been convicted for more than one offense of the possession of a controlled substance, the individual must have successfully completed a drug rehabilitation program.

   PART 2525--NATIONAL SERVICE TRUST: PURPOSE AND DEFINITIONS

1. The authority citation for part 2525 continues to read as follows:

   Authority: 42 U.S.C. 12601-12604.

2. Section 2525.10 is revised to read as follows:

   Sec. 2525.10 What is the National Service Trust?

   The National Service Trust is an account in the Treasury of the United States from which the Corporation makes payments of education awards, pays interest that accrues on qualified student loans for AmeriCorps participants during terms of service in approved national service positions, and makes other payments authorized by Congress.

3. Section 2525.20 is amended by revising the definitions for ``Approved school-to-work program,'' ``Education award,'' and ``Qualified student loan'' and by adding a definition for ``Current educational expenses'' in alphabetical order to read as follows:

   Sec. 2525.20 Definitions.

   * * * * *

   Approved school-to-work program. The term approved school-to-work program means a program that is involved in a federally-approved school-to-work system, as certified by a State, designated local partnership, or other entity that receives a grant under the School-to- Work Opportunities Act of 1994 (20 U.S.C. 6101 et seq.). * * * * *

   Current educational expenses. The term current educational expenses means the cost of attendance for a period of enrollment that begins after an individual receives an education award.

   Education award. The term education award means the financial assistance available under parts 2526 and 2528 of this chapter for which an individual in an approved AmeriCorps position may be eligible. * * * * *

   Qualified student loan. The term qualified student loan means any loan made, insured, or guaranteed pursuant to title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), other than a loan to a parent of a student pursuant to section 428B of such Act (20 U.S.C. 1078-2), any loan made pursuant to title VII or VIII of the Public Service Health Act (42 U.S.C. 292a et seq.), or any other loan designated as such by Congress. This includes, but is not necessarily limited to, the following:

   (1) Federal Family Education Loans. (i) Subsidized and Unsubsidized Stafford Loans.

   (ii) Supplemental Loans to Students (SLS).

   (iii) Federal Consolidation Loans.

   (iv) Guaranteed Student Loans (predecessor to Stafford Loans).

   (v) Federally Insured Student Loans (FISL).

   (2) William D. Ford Federal Direct Loans. (i) Direct Subsidized and Unsubsidized Stafford Loans.

   (ii) Direct Subsidized and Unsubsidized Ford Loans.

   (iii) Direct Consolidation Loans.

   (3) Federal Perkins Loans. (i) National Direct Student Loans.

   (ii) National Defense Student Loans.

   (4) Public Health Service Act Loans. (i) Health Education Assistance Loans (HEAL).

   (ii) Health Professions Student Loans (HPSL).

   (iii) Loans for Disadvantaged Students (LDS).

   (iv) Nursing Student Loans (NSL).

   (v) Primary Care Loans (PCL). * * * * *

   PART 2526--ELIGIBILITY FOR AN EDUCATION AWARD

1. The heading for part 2526 is revised to read as set forth above.

   1a. The authority citation for part 2526 continues to read as follows:

   Authority: 42 U.S.C. 12601-12604.

2. Section 2526.10 is revised to read as follows:

   Sec. 2526.10 Who is eligible to receive an education award from the National Service Trust?

   (a) General. An individual is eligible to receive an education award from the National Service Trust if the individual--

   (1) Is a citizen, national, or lawful permanent resident alien of the United States;

   (2) Is either at least 17 years of age at the commencement of service or is an out-of-school youth 16 years of age at the commencement of service participating in a program described in Sec. 2522.110(b)(3) or (g) of this chapter;

   (3) Successfully completes a term of service in an approved national service position.

   (b) High school diploma or equivalent. To use an education award, an individual must--

   (1) Have received a high school diploma or its equivalent; or

   (2) Be enrolled at an institution of higher education on the basis of meeting the standard described in paragraph (1) or (2) of subsection (a) of section 484 of the Higher Education Act of 1965 (20 U.S.C. 1091) and meet the requirements of subsection of section 484; or

   (3) Have received a waiver described in Sec. 2522.200(b) of this chapter.

   (c) Prohibition on duplicate benefits. An individual who receives a post-service benefit in lieu of an education award may not receive an education award for the same term of service.

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   (d) Penalties for false information. Any individual who makes a materially false statement or representation in connection with the approval or disbursement of an education award or other payment from the National Service Trust may be liable for the recovery of funds and subject to civil and criminal sanctions.

3. Section 2526.20 is revised to read as follows:

   Sec. 2526.20 Is an AmeriCorps participant who does not complete an originally-approved term of service eligible to receive a pro-rated education award?

   (a) Compelling personal circumstances. A participant who is released prior to completing an originally-approved term of service for compelling personal circumstances and who completes at least 15 percent of the originally-approved term of service is eligible for a pro-rated education award.

   (b) Release for cause. A participant who is released prior to completing an originally-approved term of service for cause is not eligible for any portion of an education award.

   Sec. 2526.30 [Removed]

   Sec. 2526.60 [Redesignated as Sec. 2526.30]

4. Section 2526.30 is removed and Sec. 2526.60 is redesignated as Sec. 2526.30.

   Sec. 2526.40 [Removed]

   Sec. 2526.70 [Redesignated as Sec. 2526.40]

5. Section 2526.40 is removed and Sec. 2526.70 is redesignated as Sec. 2526.40.

   Sec. 2526.40 [Amended]

6. Newly redesignated Sec. 2526.40 is amended in paragraph (b)(2) by removing the words ``under Sec. 2526.40''.

   Sec. 2526.50 [Removed]

   Sec. 2526.80 [Redesignated as Sec. 2526.50]

7. Section 2526.50 is removed and Sec. 2526.80 is redesignated as Sec. 2526.50 and revised to read as follows:

   Sec. 2526.50 Is there a limit on the number of education awards an individual may receive?

   (a) First and second terms of service. An individual may receive an education award for only the first and second terms of service for which an education award is available, regardless of the length of the term.

   (b) Release for cause. Except as provided in paragraph (c) of this section, a term of service from which an individual is released for cause counts as one of the two terms of service for which an individual may receive an education award.

   (c) Early release. If a participant is released for reasons other than misconduct prior to completing fifteen percent of a term of service, the term will not be considered one of the two terms of service for which an individual may receive an education award.

   Sec. 2526.90 [Redesignated as Sec. 2526.60]

8. Section 2526.90 is redesignated as Sec. 2526.60 and revised to read as follows:

   Sec. 2526.60 May an individual receive an education award and related interest benefits from the National Service Trust as well as other loan cancellation benefits for the same service?

   No. An individual may not receive an education award and related interest benefits from the National Service Trust for a term of service and have that same service credited toward repayment, discharge, or cancellation of other student loans.

   Sec. 2526.100 [Removed]

9. Section 2526.100 is removed.

   PART 2527--DETERMINING THE AMOUNT OF AN EDUCATION AWARD

1. The heading for part 2527 is revised to read as set forth above.

   1a. The authority citation for part 2527 continues to read as follows:

   Authority: 42 U.S.C. 12601-12604.

2. Section 2527.10 is revised to read as follows:

   Sec. 2527.10 What is the amount of an AmeriCorps education award?

   (a) Full-time term of service. The education award for a full-time term of service of at least 1,700 hours is $4,725.

   (b) Part-time term of service. The education award for a part-time term of service of at least 900 hours is $2,362.50.

   (c) Reduced part-time term of service. The education award for a reduced part-time term of service of fewer than 900 hours is--

   (1) An amount equal to the product of--

   (i) The number of hours of service required to complete the reduced part-time term of service divided by 900; and

   (ii) 2,362.50; or

   (2) An amount as determined otherwise by the Corporation.

   (d) Release for compelling personal circumstances. The education award for an individual who is released from completing an originally- approved term of service for compelling personal circumstances is equal to the product of--

   (1) The number of hours completed divided by the number of hours in the originally-approved term of service; and

   (2) The amount of the education award for the originally-approved term of service.

1. Revise part 2528 to read as follows:

   PART 2528--USING AN EDUCATION AWARD

   Sec. 2528.10 For what purposes may an education award be used? 2528.20 What steps are necessary to use an education award to repay a qualified student loan? 2528.30 What steps are necessary to use an education award to pay all or part of the current cost of attendance at an institution of higher education? 2528.40 Is there a limit on the amount of an individual's education award that the Corporation will disburse to an institution of higher education for a given period of enrollment? 2528.50 What happens if an individual withdraws or fails to complete the period of enrollment in an institution of higher education for which the Corporation has disbursed all or part of that individual's education award? 2528.60 What steps are necessary to use an education award to pay expenses incurred in participating in an approved school-to-work program? 2528.70 What happens if an individual withdraws or fails to complete the period of enrollment in an approved school-to-work program for which the Corporation has disbursed all or part of that individual's education award?

   Authority: 42 U.S.C. 12601-12604.

   Sec. 2528.10 For what purposes may an education award be used?

   (a) Authorized uses. An education award may be used--

   (1) To repay qualified student loans in accordance with Sec. 2528.20;

   (2) To pay all or part of the current cost of attendance at an institution of higher education in accordance with Sec. 2528.30 through Sec. 2528.50;

   (3) To pay expenses incurred in participating in an approved school-to-work program in accordance with Sec. 2528.60 through Sec. 2528.70.

   (b) Multiple uses. An education award is divisible and may be applied to any combination of loans, costs, or expenses described in paragraph (a) of this section.

   Sec. 2528.20 What steps are necessary to use an education award to repay a qualified student loan?

   (a) Required information. Before disbursing an amount from an education award to repay a qualified student loan, the Corporation must receive--

   (1) An individual's written authorization and request for a specific payment amount;

   (2) Identifying and other information from the holder of the loan as requested by the Corporation and necessary to ensure compliance with this part.

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   (b) Payment. When the Corporation receives the information required under paragraph (a) of this section, the Corporation will pay the holder of the loan and notify the individual of the payment.

   (c) Aggregate payments. The Corporation may establish procedures to aggregate payments to holders of loans for more than a single individual.

   Sec. 2528.30 What steps are necessary to use an education award to pay all or part of the current cost of attendance at an institution of higher education?

   (a) Required information. Before disbursing an amount from an education award to pay all or part of the current cost of attendance at an institution of higher education, the Corporation must receive--

   (1) An individual's written authorization and request for a specific payment amount;

   (2) Information from the institution of higher education as requested by the Corporation, including verification that--

   (i) It has in effect a program participation agreement under section 487 of the Higher Education Act of 1965 (20 U.S.C. 1094);

   (ii) Its eligibility to participate in any of the programs under title IV of the Higher Education Act of 1965 has not been limited, suspended, or terminated;

   (iii) It has in effect a fair and equitable refund policy, consistent with the requirements of paragraphs (b) and (c) of section 484B of the Higher Education Act of 1965 (20 U.S.C. 1091b) and 34 CFR 668.22, and must ensure an appropriate refund to the Corporation if an individual who has used an education award withdraws or otherwise fails to complete the period of enrollment for which the education award was provided;

   (iv) Individuals using education awards to pay for the current cost of attendance at that institution do not comprise more than 15 percent of the institution's total student population;

   (v) The amount requested will be used to pay all or part of the individual's cost of attendance;

   (vi) The amount requested does not exceed the difference between:

   (A) The individual's cost of attendance; and

   (B) The sum of the individual's estimated student financial assistance for that period under part A of title IV of the Higher Education Act and the individual's veterans' education benefits as defined in section 480(c) of the Higher Education Act (20 U.S.C. 1087vv(c)).

   (b) Payment. When the Corporation receives the information required under paragraph (a) of this section, the Corporation will pay the institution and notify the individual of the payment.

   (c) Installment payments. The Corporation will disburse the education award to the institution of higher education in at least two separate installments, none of which exceeds 50 percent of the total amount. The interval between installments may not be less than one-half of the period of enrollment, except as necessary to permit the second installment to be paid at the beginning of the second semester, quarter, or other division of a period of enrollment.

   Sec. 2528.40 Is there a limit on the amount of an individual's education award that the Corporation will disburse to an institution of higher education for a given period of enrollment?

   Yes. The Corporation's disbursement from an individual's education award for any period of enrollment may not exceed the difference between--

   (a) The individual's cost of attendance for that period of enrollment, determined by the institution of higher education in accordance with section 472 of the Higher Education Act of 1965 (20 U.S.C. 1987ll); and

   (b) The sum of--

   (1) The individual's estimated financial assistance for that period under part A of title IV of the Higher Education Act; and

   (2) The individual's veterans' education benefits as defined under section 480(c) of the Higher Education Act (20 U.S.C. 1087vv(c)).

   Sec. 2528.50 What happens if an individual withdraws or fails to complete the period of enrollment in an institution of higher education for which the Corporation has disbursed all or part of that individual's education award?

   (a)(1) An institution of higher education that receives a disbursement of education award funds from the Corporation must have in effect, and must comply with, a fair and equitable refund policy that includes procedures for providing a refund to the Corporation if an individual for whom the Corporation has disbursed education award funds withdraws or otherwise fails to complete a period of enrollment.

   (2) For purposes of this part, an institution of higher education's refund policy is deemed ``fair and equitable'' if it is consistent with the requirements of paragraphs (b) and (c) of section 484B of the Higher Education Act of 1965 (20 U.S.C. 1091b) and 34 CFR 668.22.

   (b) The Corporation will credit any refund received for an individual under paragraph (a) of this section to the individual's education award allocation in the National Service Trust.

   Sec. 2528.60 What steps are necessary to use an education award to pay expenses incurred in participating in an approved school-to-work program?

   (a) Required information. Before disbursing an amount from an education award to pay expenses incurred in participating in an approved school-to-work program, the Corporation must receive--

   (1) An individual's written authorization and request for a specific payment amount;

   (2) Information from the school-to-work program as requested by the Corporation, including verification that--

   (i) It is involved in a federally-approved school-to-work system, as certified by a State, designated local partnership, or other entity that receives a grant under the School-to-Work Opportunities Act of 1994 (20 U.S.C. 6101);

   (ii) The amount requested will be used to pay all or part of the individual's cost of participating in the school-to-work program;

   (iii) It will ensure an appropriate refund, consistent with the requirements of paragraphs (b) and (c) of section 484B of the Higher Education Act of 1965 (20 U.S.C. 1091b) and 34 CFR 668.22, to the Corporation if an individual who has used an education award withdraws or otherwise fails to complete the period of enrollment for which the education award was provided.

   (b) Payment. When the Corporation receives the information required under paragraph (a) of this section, the Corporation will pay the program and notify the individual of the payment.

   Sec. 2528.70 What happens if an individual withdraws or fails to complete the period of enrollment in an approved school-to-work program for which the Corporation has disbursed all or part of that individual's education award?

   (a)(1) An approved school-to-work program that receives a disbursement of education award funds from the Corporation must provide a fair and equitable refund to the Corporation if an individual for whom the Corporation has disbursed education award funds withdraws or otherwise fails to complete a period of enrollment.

   (2) For purposes of this part, a refund is deemed ``fair and equitable'' if it is an amount consistent with the requirements of paragraphs (b) and (c) of section 484B of the Higher Education Act of 1965 (20 U.S.C. 1091b) and 34 CFR 668.22.

   [[Page 37417]]

   (b) The Corporation will credit any refund received for an individual under paragraph (a) of this section to the individual's education award allocation in the National Service Trust.

1. Revise part 2529 to read as follows:

   PART 2529--PAYMENT OF ACCRUED INTEREST

   Sec. 2529.10 Under what circumstances will the Corporation pay interest that accrues on qualified student loans during an individual's term of service in an approved AmeriCorps position? 2529.20 What steps are necessary to obtain forbearance in the repayment of a qualified student loan during an individual's term of service in an approved AmeriCorps position? 2529.30 What steps are necessary for using funds in the National Service Trust to pay interest that has accrued on a qualified student loan during a term of service for which the individual has obtained forbearance?

   Authority: 42 U.S.C. 12601-12604.

   Sec. 2529.10 Under what circumstances will the Corporation pay interest that accrues on qualified student loans during an individual's term of service in an approved AmeriCorps position?

   (a) Eligibility. The Corporation will pay interest that accrues on an individual's qualified student loan, subject to the limitation on amount in paragraph (b) of this section, if--

   (1) The individual successfully completes a term of service in an approved AmeriCorps position; and

   (2) The holder of the loan approves the individual's request for forbearance during the term of service.

   (b) Amount. The percentage of accrued interest that the Corporation will pay is the lesser of--

   (1) The product of--

   (i) The number of hours of service completed divided by the number of days for which forbearance was granted; and

   (ii) 365 divided by 17; and (2) 100.

   (c) Supplemental to education award. A payment of accrued interest under this part is supplemental to an education award received by an individual under parts 2526 through 2528 of this chapter.

   (d) Limitation. The Corporation is not responsible for the repayment of any accrued interest in excess of the amount determined in accordance with paragraph (b) of this section.

   (e) Suspended service. The Corporation will not pay any interest expenses that accrue on an individual's qualified student loan during a period of suspended service.

   Sec. 2529.20 What steps are necessary to obtain forbearance in the repayment of a qualified student loan during an individual's term of service in an approved AmeriCorps position?

   (a) An individual seeking forbearance must submit a request to the holder of the loan.

   (b) If, before approving a request for forbearance, the holder of the loan requires verification that the individual is serving in an approved AmeriCorps position, the Corporation will provide verification upon a request from the individual or the holder of the loan.

   Sec. 2529.30 What steps are necessary for using funds in the National Service Trust to pay interest that has accrued on a qualified student loan during a term of service for which an individual has obtained forbearance?

   (a) The Corporation will make payments from the National Service Trust for interest that has accrued on a qualified student loan during a term of service which the individual has successfully completed and for which an individual has obtained forbearance, after the following:

   (1) The program verifies that the individual has successfully completed the term of service and the dates upon which the term of service began and ended;

   (2) The holder of the loan verifies the amount of interest that has accrued during the term of service.

   (b) When the Corporation receives all necessary information from the program and the holder of the loan, the Corporation will pay the holder of the loan and notify the individual of the payment.

   Dated: June 28, 1999. Wendy Zenker, Chief Operating Officer.

   [FR Doc. 99-17059Filed7-9-99; 8:45 am]

   BILLING CODE 6050-28-U