[Federal Register Volume 59, Number 114 (Wednesday, June 15, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-14231] [[Page Unknown]] [Federal Register: June 15, 1994] ======================================================================= ----------------------------------------------------------------------- CORPORATION FOR NATIONAL AND COMMUNITY SERVICE 45 CFR Parts 2525, 2526, 2527, 2528, and 2529 National Service Trust AGENCY: Corporation for National and Community Service. ACTION: Interim final rule. ----------------------------------------------------------------------- SUMMARY: The Corporation for National and Community Service (the Corporation) is issuing this interim final rule implementing requirements of subtitle D of the National and Community Service Act of 1990 (the Act). This rule describes the following: the National Service Trust (the Trust); who is eligible to receive education awards from the Trust; how the amount of the education awards is determined; the purposes for which the education awards may be used; and the circumstances under which AmeriCorps participants will receive forbearance and payment of interest expenses on qualified student loans. This rule is intended to allow for the provision of educational benefits to AmeriCorps participants. DATES: Interim rule effective June 15, 1994; comments must be received on or before August 1, 1994. ADDRESSES: Comments must be mailed to the Corporation for National and Community Service, P.O. Box 34680, Washington, DC 20034-4680 or hand delivered to the Office of the General Counsel, room 9200, 1100 Vermont Avenue, Washington, DC 20525. Comments received may be inspected at the Corporation for National and Community Service, Office of the General Counsel, room 9200, 1100 Vermont Avenue NW., Washington, DC 20525, between 9 a.m. and 5 p.m. Eastern daylight savings time. FOR FURTHER INFORMATION CONTACT: Terry Russell, (202) 606-4949 (Voice) or (202) 606-5256 (TDD), between the hours of 9 a.m. and 6 p.m. Eastern daylight savings time. For individuals with disabilities, information will be made available in alternative formats upon request. SUPPLEMENTARY INFORMATION: The Corporation has published this rule as an interim final rule rather than as a proposed rule pursuant to 44 U.S.C. 553(b)(3)(B). The Corporation is making grants to AmeriCorps programs that will operate over the summer of 1994 and whose participants will need to receive education awards under the terms and conditions of this rule. Since it would be contrary to the public interest to publish this rule as a proposed rule, it is published as an interim final rule to take effect immediately. On March 23, 1994, the Corporation published final regulations governing the Corporation's grantmaking programs and various support and investment activities authorized by the Act (59 FR 13772). This rule establishes regulations to implement sections 145 through 148 of subtitle D of the Act, which requires the Corporation to make payments from the National Service Trust for education awards for AmeriCorps participants and for interest expenses that accrue on qualified student loans for which participants have obtained forbearance during a term of service in an AmeriCorps program. Overview of This Interim Final Rule and Discussion of Policy Decisions In general, this rule incorporates, without substantive change, the statutory requirements regarding the eligibility of AmeriCorps participants to receive and use education awards, the standards for determining the amount of the education award, the possible uses of and procedures for using education awards, the procedures for obtaining forbearance in repaying qualified student loans while serving in an AmeriCorps program, and the procedures for making interest payments from the National Service Trust. Some sections of the regulations interpret and elaborate on provisions in the statute. Those sections are discussed below. AmeriCorps participants who are released for cause are not eligible to receive any portion of the education award. However, participants who are released for compelling personal circumstances, at the discretion of their respective programs, either may have their service suspended and return at a later date to complete their terms or may receive a pro-rated education award. Sections 2526.20 and 2527.10 of this rule set some guidelines for programs to make these determinations. First, the corporation encourages programs--whenever possible and appropriate--to suspend a participant's term of service rather than offer a pro-rated education award. The intent is to always encourage participants to complete their terms of service if at all possible. Second, the regulations further clarify that participants who are released for compelling personal circumstances only may receive a pro- rated education award if they have completed at least 15% of their terms of service. There are a number of reasons for this policy. From a logistical standpoint, 15% of a full-time term of service equates to approximately six weeks; similarly, programs are allowed to fill an approved AmeriCorps position left vacant due to attrition only within the first six weeks of a term of service. Programs that offered pro- rated education awards within this first six weeks would forfeit those AmeriCorps positions--an outcome that is desirable neither for the programs nor for the Corporation. From an economic standpoint, the value of a pro-rated education award for significantly less than 15% of a term of service would be insufficient to pay for most educational expenses and, in many cases, would be less than the administrative costs of providing that award. Finally, the Corporation did not set the limit at a higher percentage because it recognizes that there may be compelling cases in which participants legitimately would be unable to continue service even after a period of suspension but would benefit from and should receive a relatively small, pro-rated education award. Section 2526.50 clarifies that the suspension of an individual's eligibility to use an education award as a result of the conviction of the possession or sale of a controlled substance does not constitute a valid reason for the extension of the seven-year period for using an education award. The sections in part 2528 describe the uses of and the procedures for using education awards. The regulations in these sections are designed to ensure that the necessary documentation and verification are obtained at each stage of the process without imposing too great a burden on holders of qualified student loans, institutions of higher education, participants, or the Corporation. Part 2529 describes the procedures for participants to obtain forbearance in the repayment of qualified student loans and for the Corporation to pay interest expenses that accrue during such periods of forbearance. Similar to the regulations in part 2528, the regulations in this part are designed to ensure that the necessary documentation and verification is obtained while minimizing administrative burdens. Section 2529.20 clarifies that individuals who are eligible for a pro- rated education awards or for pro-rated Stafford Loan Forgiveness also are eligible for pro-rated payments of interest expenses based on the portion of the term of service that was completed. The Corporation will not, however, pay interest expenses that accrue during a period of suspension of a term of service. Section 2529.30 clarifies that different repayment requirements apply to VISTA volunteers. Invitation to Comment The Corporation invites written comments on the text of this interim final rule and requests that the comments identify the specific sections of the regulations to which they relate and provide reasons for any suggested changes. Miscellaneous Requirements Interested parties should be advised that because the assistance provided under the authority of this rule constitutes Federal financial assistance for the purposes of title VI of the Civil Rights Act of 1964 (which bars discrimination based on race, color, or national origin), title IX of the Education Amendments of 1972 (which bars discrimination on the basis of gender), the Rehabilitation Act of 1973 (which bars discrimination on the basis of disability), and the Age Discrimination Act of 1975 (which bars discrimination on the basis of age), grantees will be required to comply with the aforementioned provisions of Federal law. Grant recipients will be expected to expend Corporation grants in a judicious and reasonable manner, consistent with pertinent provisions of Federal law and regulations. Grantees must keep records according to Corporation guidelines, including records that fully disclose the amount and disposition of the proceeds of a Corporation grant. The Inspector General of the Corporation (or other authorized official) shall have access, for the purpose of audit and examination, to the books and records of grantees that may be related or pertinent to the Corporation grant. Grantees should further be advised that Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments, and Administrative Requirements for Grants and Cooperative Agreements to other than State and Local Governments, as well as regulations for the Privacy Act, Freedom of Information Act, Sunshine Act, Government-wide Debarment and Suspension, and Government-wide Requirements for Drug-Free Workplace will also be published. As required by the Regulatory Flexibility Act, it is hereby certified that this rule will not have a significant impact on small business entities. As required by the Paperwork Reduction Act of 1980, the Corporation will submit the information collection requirements contained in this rule to the Office of Management and Budget for its review (44 U.S.C. 3504(h)). The information collection requirements are needed in order to provide assistance to parties affected by these regulations, in accordance with statutory mandates. (Catalog of Federal Domestic Assistance Numbers: 94.003 for State Commissions, Alternative Administrative Entities, and Transitional Entities; 94.004 for K-12 Service-Learning Programs; 94.005 for Higher Education Service-Learning Programs; 94.006 for AmeriCorps Programs; 94.007 for Investment for Quality and Innovation Programs) List of Subjects 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. Dated: June 7, 1994. Terry Russell, General Counsel. Accordingly, the Corporation amends title 45, chapter XXV of the Code of Federal Regulations by adding parts 2525 through 2529 to read as follows: PART 2525--NATIONAL SERVICE TRUST: PURPOSE AND DEFINITIONS Sec. 2525.10 What is the National Service Trust? 2525.20 Definitions. Authority: 42 U.S.C. 12601-12604. 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, Stafford loan forgiveness awards, and pays interest that accrue on qualified student loans for AmeriCorps participants during terms of service in approved AmeriCorps positions. Sec. 2525.20 Definitions. In addition to the definitions in Sec. 2510.20 of this chapter, the following definitions apply to terms used in parts 2525 through 2529 of this chapter: Approved school-to-work program. The term approved school-to-work program means a school-to-work program officially approved by the Secretaries of the Departments of Education and Labor. Cost of attendance. The term cost of attendance has the same meaning as in title IV of the Higher Education Act of 1965, as amended (20 U.S.C. 1070 et. seq.). Education award. The term education award means the financial assistance available under parts 2526 through 2528 of this chapter for which an individual in an approved AmeriCorps position--except for an individual in a Stafford Loan Forgiveness program (SLF program)--may be eligible. Holder. The term holder means-- (1) The original lender; or (2) Any other entity to whom a loan is subsequently sold, transferred, or assigned if such entity acquires a legally enforceable right to receive payments from the borrower. Institution of higher education. For the purposes of parts 2525 through 2529 of this chapter, the term institution of higher education has the same meaning given the term in section 481(a) of the Higher Education Act of 1965, as amended (20 U.S.C. 1088(a)). 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), and any loan made pursuant to title VII or VIII of the Public Service Health Act (42 U.S.C. 292a et. seq.). Term of service. The term term of service means-- (1) For AmeriCorps participants other than VISTA volunteers, any of the terms of service specified in Sec. 2522.220 of this chapter; and (2) For VISTA volunteers, not less than a full year of service as a VISTA volunteer. PART 2526--ELIGIBILITY TO RECEIVE AND USE EDUCATIONAL BENEFITS Sec. 2526.10 What types of AmeriCorps educational benefits are available? 2526.20 Who is eligible to receive a full education award from the National Service Trust? 2526.30 Who is eligible to receive a full Stafford loan forgiveness award from the National Service Trust? 2526.40 Is an AmeriCorps participant who does not complete a term of service eligible to receive a pro-rated education or Stafford loan forgiveness award? 2526.50 What conditions must an AmeriCorps participant who has received an education award meet in order to use that education award? 2526.60 How do convictions for the possession or sale of controlled substances affect an education award recipient's ability to use that award? 2526.70 What is the time period during which an individual must use an education award? 2526.80 How many education or Stafford loan forgiveness awards may an individual receive? 2526.90 May an individual receive an education or Stafford loan forgiveness award and loan cancellations for the same service? 2526.100 How are education and Stafford loan forgiveness awards treated in determining eligibility for financial assistance under the Higher Education Act of 1965, as amended? Authority: 42 U.S.C. 12601-12604. Sec. 2526.10 What types of AmeriCorps educational benefits are available? Individuals serving in approved AmeriCorps positions may be eligible to receive either AmeriCorps education awards or Stafford loan forgiveness awards, but may not receive both awards for the same term of service. Sec. 2526.20 Who is eligible to receive a full education award from the National Service Trust? (a) General. To receive a full education award from the National Service Trust, an AmeriCorps participant must meet the eligibility requirements for, and successfully complete the required term of service in, an approved AmeriCorps position, including approved AmeriCorps positions in the VISTA program established by the Domestic Volunteer Service Act of 1973 (42 U.S.C. 4950 et. seq.) and the National Civilian Community Corps program established by the National and Community Service Act of 1990. (b) Conditions. (1) For any term of service, a VISTA Volunteer who successfully completes his or her required term of service is only eligible to receive an education award from the National Service Trust if he or she does not accept the postservice stipend authorized under section 105(a)(1) of the Domestic Volunteer Service Act of 1973. (2) For any term of service, a National Civilian Community Corps participant who successfully completes his or her required term of service is only eligible to receive an education award from the National Service Trust if he or she does not accept the alternative benefit described in section 158(g) of the National and Community Service Act of 1990. Sec. 2526.30 Who is eligible to receive a full Stafford loan forgiveness award from the National Service Trust? An individual who successfully completes a term of service in an approved AmeriCorps position in a Stafford Loan Forgiveness program is eligible to receive a full Stafford loan forgiveness award. Sec. 2526.40 Is an AmeriCorps participant who does not complete a term of service eligible to receive a pro-rated education or Stafford loan forgiveness award? (a) An individual who is released from a term of service for compelling personal circumstances, in accordance with Sec. 2522.230(a) of this chapter, is eligible to receive a pro-rated education or Stafford loan forgiveness award as determined according to Sec. 2527.10(d)(1) of this chapter if-- (1) The individual completed at least fifteen percent of his or her required term of service prior to the release; and (2) The program chooses to provide the individual with a pro-rated education or Stafford loan forgiveness award pursuant to Sec. 2522.230(a)(1) of this chapter rather than permitting the individual to complete the remainder of the term of service after a temporary suspension of service pursuant to Sec. 2522.230(a)(2) of this chapter. (b) Programs are encouraged, when appropriate, to suspend service rather than offer prorated educational benefits. (c) An individual who is released from a term of service for cause in accordance with Sec. 2522.230(b) of this chapter is not eligible for any portion of an education or Stafford loan forgiveness award. (d) A VISTA volunteer who does not complete a term of service as a result of the early closure of the project in which he or she is serving is eligible to receive a pro-rated education award as determined according to Sec. 2527.10(d)(1) of this chapter. Sec. 2526.50 What conditions must an individual who has received an education award meet in order to use that education award? An individual who receives an education award is eligible to use the award if the individual-- (a) Has received a high school diploma or its equivalent, is enrolled at an institution of higher education, or has received a waiver based on an individual education assessment conducted by the AmeriCorps program in which the individual participated; (b) Is a citizen, national, or permanent resident alien of the United States; and (c) Is not eligible to use the education award under Sec. 2526.40 as a result of a conviction of the possession or sale of a controlled substance. Sec. 2526.60 How do convictions for the possession or sale of controlled substances affect an education award recipient's ability to use that award? (a) Except as provided in paragraph (b) of this section, a recipient of an education award who is convicted under pertinent Federal or State law of the possession or sale of a controlled substance is not eligible to use his or her education award from the date of the conviction until the end of a specified time period, which is determined based on the type of conviction as follows: (1) For conviction of the possession of a controlled substance, the ineligibility periods are-- (i) One year for a first conviction; (ii) Two years for a second conviction; and (iii) For a third or subsequent conviction, indefinitely, as determined by the Corporation according to the following factors-- (A) Type of controlled substance; (B) Amount of controlled substance; (C) Whether firearms or other dangerous weapons were involved in the offense; (D) Nature and extent of any other criminal record; (E) Nature and extent of any involvement in trafficking of controlled substances; (F) Length of time between offenses; (G) Employment history; (H) Service to the community; (I) Recommendations from community members and local officials, including experts in substance abuse and treatment; and (J) Any other relevant aggravating or ameliorating circumstances. (2) For conviction of the sale of a controlled substance, the ineligibility periods are-- (i) Two years for a first conviction; and (ii) Two years plus such additional time as the Corporation determines as appropriate for second and subsequent convictions, based on the factors set forth in paragraphs (a)(1)(iii) (A) through (J) of this section. (b) (1) If the Corporation determines that an individual who has had his or her eligibility to use the education award suspended pursuant to paragraph (a) of this section has successfully completed a legitimate drug rehabilitation program, or in the case of a first conviction that the individual has enrolled in a legitimate drug rehabilitation program, the individual's eligibility to use the education award will be restored. (2) In order for the Corporation to determine that the requirements of paragraph (b)(1) of this section have been met-- (i) The drug rehabilitation program must be recognized as legitimate by appropriate Federal, State or local authorities; and (ii) The individual's enrollment in or successful completion of the legitimate drug rehabilitation program must be certified by an appropriate official of that program. Sec. 2526.70 What is the time period during which an individual must use an education award? (a) General requirement. An individual must use an education award within seven years of the date on which the individual successfully completes a term of service, unless the individual applies for and receives an extension in accordance with the requirements of paragraph (b) of this section. (b) Extensions. In order to receive an extension of the seven-year time period for using an education award, an individual must apply to the Corporation for an extension prior to the end of that time period. The Corporation will grant an application for an extension under the following circumstances: (1) If the Corporation determines that an individual was performing another term of service in an approved AmeriCorps position during the seven-year period, the Corporation will grant an extension for a time period that is equivalent to the time period during which the individual was performing the other term of service. (2) If the Corporation determines that an individual was unavoidably prevented from using the education award during the seven- year period, the Corporation will grant an extension for a period of time that the Corporation deems appropriate. An individual who is ineligible to use an education award as a result of the individual's conviction of the possession or sale of a controlled substance under Sec. 2526.40 is not considered to be unavoidably prevented from using the education award for the purposes of this paragraph. Sec. 2526.80 How many education or Stafford loan forgiveness awards may an individual receive? An individual may receive an education or Stafford loan forgiveness award for each of up to two terms of service. For the purposes of this section, full-time, part-time and reduced part-time terms of service described in Sec. 2522.220 of this chapter are each considered terms of service. Sec. 2526.90 May an individual receive an education or Stafford loan forgiveness award and loan cancellations for the same service? No. Although an education award may be used to repay qualified student loans pursuant to Sec. 2528.20 of this chapter, an individual may not receive an education or Stafford loan forgiveness award for a term of service and have that same service credited toward repayment of other student loans. Sec. 2526.100 How are education and Stafford loan forgiveness awards treated in determining eligibility for financial assistance under the Higher Education Act of 1965, as amended? Institutions of higher education shall consider education and Stafford loan forgiveness awards neither as income in calculating expected family contributions nor as estimated financial assistance in packaging assistance under the Higher Education Act of 1965, as amended (20 U.S.C. 1070 et seq.). PART 2527--AMOUNT OF AMERICORPS EDUCATIONAL BENEFITS Sec. 2527.10 How are the amounts of the education and Stafford loan forgiveness awards determined? Authority: 42 U.S.C. 12601-12604. Sec. 2527.10 How are the amounts of the education and Stafford loan forgiveness awards determined? (a) Education awards for full-time service. The education award for full-time service is equal to 90 percent of-- (1) One-half of an amount equal to the aggregate basic educational assistance allowance provided in 38 U.S.C. 3015(b)(1) (as in effect on July 28, 1993), for the period referred to in 38 U.S.C. 3013(a)(1) (as in effect on July 28, 1993), for a member of the Armed forces who is entitled to such an allowance under 38 U.S.C. 3011 and whose initial obligated period of active duty is two years; less (2) One-half of the aggregate basic contribution required to be made by the member in 38 U.S.C. 3011(b) (as in effect on July 28, 1993). (b) Stafford loan forgiveness awards for full-time service. The Stafford loan forgiveness award for a full-time participant in a Stafford Loan Forgiveness program is equal to 15 percent of that greater of-- (1) That participant's current Stafford loan obligations that were incurred during the final two years of that participant's undergraduate education; or (2) That participant's current Stafford loan obligations that were incurred during the most recent two years of that participant's graduate education in a teaching program. (c) Part-time service. The education and Stafford loan forgiveness awards for part-time terms of service are equal to one-half of the corresponding full-time education and Stafford loan forgiveness awards described in paragraphs (a) and (b) of this section. (d) Incomplete or reduced terms of service. (1) The education or Stafford loan forgiveness awards for individuals who are released from a term of service for compelling personal circumstances and are eligible for a pro-rated full- or part-time education or Stafford loan forgiveness award in accordance with the requirements in Sec. 2526.40 of this chapter, or for VISTA volunteers who are released due to the early of a project, are equal to the product of-- (i) The ratio of the portion of the term of service completed to the required term of service; and (ii) The amount of the full- or part-time education award available for that term of service as determined pursuant to paragraph (a), (b) or (c) of this section. (2) The education award for individuals serving in a reduced part- time term of service described in Sec. 2522.220 of this chapter is equal to the product of-- (i) The ratio of the number of hours of service required for the reduced part-time term of service to 900; and (ii) The amount of the part-time education or Stafford loan forgiveness award as determined pursuant to paragraph (c) of this section. (e) Authority to aggregate awards. An individual who serves two terms of service in a Stafford loan forgiveness program(s) may elect (prior to the end of the first such term of service) to aggregate the two Stafford loan forgiveness awards that the individual receives such that the individual receives a single Stafford loan forgiveness award at the end of the second term of service that is equal to the sum of the awards for each of the terms. An individual who wishes to aggregate his or her Stafford loan forgiveness awards must comply with the procedural requirements of Sec. 2528.60 of this chapter. PART 2528--USES OF AND PROCEDURES FOR USING EDUCATIONAL BENEFITS Sec. 2528.10 For what purposes may education awards be used? 2528.20 What are the procedural requirements for using education awards to repay qualified student loans? 2528.30 What are the procedural requirements for using education awards to pay for all or part of the cost of attendance at an institution of higher education or to pay for expenses incurred in participating in an approved school-to-work program? 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 or school-to-work program for which the Corporation has disbursed all or part of that individual's education award? 2528.60 What are the procedural requirements for using a Stafford loan forgiveness award to repay Stafford loans? Authority: 42 U.S.C. 12601-12604. Sec. 2528.10 For what purposes may education awards be used? (a) Education awards may be used-- (1) To repay qualified student loans or portions thereof in accordance with Sec. 2528.20: (2) To pay all or part of the cost of attendance at an institution of higher education in accordance with Secs. 2528.30 through 2528.50; and (3) To pay expenses incurred in participating in approved school- to-work programs in accordance with Sec. 2528.60. (b) Education awards are divisible and may be applied to any combination of those loans, costs and expenses described in paragraph (a) of this section. Sec. 2528.20 What are the procedural requirements for using education awards to repay qualified student loans? (a) In order to use an education award to repay qualified student loans, the recipient of the award must submit an application to the Corporation, in a manner prescribed by the corporation that: (1) Identifies, or permits the Corporation to identify, the holder or holders of the loans; (2) Indicates, or permits the Corporation to determine, the amounts of principal and interest outstanding on the loans; (3) Specifies, if the outstanding balance of the principal on the loans is greater than the amount to be disbursed by the Corporation, which of the loans the individual prefers to have paid; and (4) Contains whatever other information the Corporation may require. (b) Upon receipt of an application under paragraph (a) of this section, the Corporation will notify each holder of a loan that has been designated for payment in the individual's application and will identify any information or documentation that the holder must provide to the corporation before the Corporation will make payment. (c) When the Corporation receives all required information from the holder of the loan, the Corporation will pay the holder of the loan in accordance with the instructions in the application of the education award recipient and will notify the recipient of the payment. (d) The Corporation may establish procedures to aggregate payments to holders of loans for more than a single individual. Sec. 2528.30 What are the procedural requirements for using education awards to pay for all or part of the cost of attendance at an institution of higher education or to pay for expenses incurred in participating in an approved school-to-work program? (a) In order to use an education award to pay for the cost of full- time or part-time attendance at an institution of higher education or to pay for expenses incurred in participating in an approved school-to- work program, the recipient of an award must submit an application to the institution of higher education or school-to-work program in which the individual is or will be enrolled, on a form prescribed by the Corporation, that contains such information as the Corporation may require to verify that the individual is a recipient of and eligible to use an education award. (b) An institution of higher education or approved school-to-work program that receives one or more applications submitted in accordance with the requirements of paragraph (a) of this section shall submit to the Corporation, in a manner prescribed by the Corporation, a statement that-- (1) Identifies each eligible individual filing an application; (2) Specifies the amounts for which such eligible individuals are qualified; (3)(i) For institutions of higher education, certifies that-- (A) The institution of higher education has in effect a program participation agreement under section 487 of the Higher Education Act of 1965; (B) The institution's eligibility to participate in any of the programs under title IV of such Act has not been limited, suspended, or terminated; and (C) Individuals using education awards to pay for the cost of attendance at that institution do not comprise more than 15 percent of the total student population of the institution; (ii) For school-to-work programs, certifies that the program has been approved by the Departments of Education and Labor; (4) Indicates the costs of attendance or participation for any period(s) of enrollment for which the individual(s) are applying the education award(s); and (5) Contains such provisions concerning financial compliance as the Corporation may require in the application. (c) When the Corporation receives a statement from an institution of higher education or a school-to-work program in accordance with the requirements of paragraph (b) of this section, the Corporation will pay a first installment for the first period of enrollment, which shall be not more than half of the total monetary value of the education awards that the individuals identified on the institution's statement are scheduled to receive. The Corporation will pay installments for each subsequent period of enrollment upon receipt of statements updating the information required under paragraph (b) of this section for the relevant 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 in accordance with section 472 of the Higher Education Act of 1965; and (b) The sum of-- (1) The student's estimated financial assistance for that period under part A of title IV of such Act; and (2) The student's veterans' education benefits, determined in accordance with section 480(c) of such Act. Sec. 2528.50 What happens if an individual withdraws or fails to complete the period of enrollment in an institution of higher education or school-to-work program for which the Corporation has disbursed all or part of that individual's education award? (a) (1) An institution of higher education or school-to-work program that receives a disbursement of education award funds from the Corporation must have in effect 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 the period of enrollment at that institution or program for which the assistance was provided. (2) (i) For purposes of this section, 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, as amended. (ii) For the purposes of this section, a school-to-work program's refund policy is deemed ``fair and equitable'' if it complies with any standards that may be developed by the Departments of Education and Labor. (b) The Corporation credits to the individual's education award allocation in the National Service Trust the amount of any refund received for that individual under paragraph (a) of this section. Sec. 2528.60 What are the procedural requirements for using a Stafford loan forgiveness award to repay Stafford loans? (a) In order to apply a Stafford loan forgiveness award to the repayment of a Stafford loan(s), a participant in an AmeriCorps Stafford Loan Forgiveness program must submit an application to the Corporation that-- (1) Identifies the holder or holders of the participant's Stafford loans as described in Sec. 2527.10(b) of this chapter; (2) Indicates the amounts of outstanding principal and the rates of interest on those loans; (3) Indicates, where appropriate, to which of the loans the individual would prefer to apply the Stafford loan forgiveness award; (4) If the participant serves two terms of service in a Stafford Loan Forgiveness program, indicates whether the participant wishes to aggregate the Stafford loan forgiveness awards pursuant to Sec. 2527.10(e) of this chapter; and (5) Contains whatever other information the Corporation may require. (b) When a participant receives a Stafford loan forgiveness award, the Corporation will notify each holder of a Stafford loan identified in the participant's application of the portion of the loan that the Corporation will repay and will identify any information or documentation that the holder must provide to the Corporation. (c) When the Corporation receives all required information from the holder of the loan(s) pursuant to paragraph (b) of this section, the Corporation will pay the holder(s) an amount determined according to Sec. 2527.10 of this chapter and will notify the participant of the payment. (d) The Corporation may establish procedures to aggregate payments to holders of Stafford loans for more than one individual. PART 2529--FORBEARANCE AND INTEREST PAYMENT PROCEDURES Sec. 2529.10 What are the procedural requirements for obtaining forbearance in the repayment of a qualified student loan during an individual's term of service in an approved AmeriCorps position? 2529.20 What are the procedural requirements for using National Service Trust funds to pay interest that accrues on a qualified student loan for which an individual has obtained forbearance? 2529.30 What additional student loan forbearance benefits are available for VISTA volunteers? Authority: 42 U.S.C. 12601-12604. Sec. 2529.10 What are the procedural requirements for obtaining forbearance in the repayment of a qualified student loan during an individual's term of service in an approved AmeriCorps position? (a) In order to obtain forbearance in the repayment of a qualified student loan during a term of service in an approved AmeriCorps position, an individual, other than a VISTA volunteer, must submit a written request to the holder of the loan. (b) Upon receipt of a request under paragraph (a) of this section, the holder of a qualified student loan must contact the Corporation to verify that the individual is serving in an approved AmeriCorps position and to determine the period for which the holder must grant forbearance. (c) The holder shall grant forbearance in the repayment of a qualified student loan for the period of an individual's required term of service after obtaining the verification required under paragraph (b) of this section. (d) The holder shall promptly report to the Corporation each individual and loan for which it grants forbearance, the period for which it has granted forbearance, and the projected amount of interest that will accrue on the loan during the period of forbearance. (e) If an individual who has obtained forbearance on a qualified student loan(s) does not complete his or her term of service, or if that individual's term of service is suspended, the Corporation will promptly notify the holder(s) of that loan(s). (f) The holder is not required to grant forbearance in the repayment of qualified student loans for any period during which an individual's service in an approved AmeriCorps position has been suspended. Sec. 2529.20 What are the procedural requirements for using National Service Trust funds to pay interest that accrues on a qualified student loan for which an individual has obtained forbearance? The Corporation will make payments from the National Service Trust for interest that accrues on qualified student loans for which an individual, other than a VISTA volunteer, has obtained forbearance under Sec. 2529.10 in accordance with the following requirements: (a) Completed terms of service. (1) If an individual successfully completes a term of service, the Corporation will notify the holder of the individual's loan of the date of completion; the holder shall document the accrued interest expense to the Corporation; and the Corporation will pay all or a portion of the accrued interest and notify the individual and the holder of the loan of the payment. (2) The percentage of the accrued interest that the Corporation will pay pursuant to paragraph (a)(1) of this section is equal to the lesser of-- (i) The product of-- (A) The required number of hours for the term of service divided by the total number of days for which forbearance was granted; and (B) 365 divided by 17; and (ii) 100. (b) Incomplete terms of service. (1) If an individual does not successfully complete a term of service, but is eligible for a pro- rated educational benefits under Sec. 2527.10(c) of this chapter or pro-rated Stafford Loan Forgiveness under Sec. 2522.650(c) of this chapter, the Corporation will notify the holder of the loan if the date of the individual's release, the holder of the loan shall document to the Corporation the amount of accrued interest as of the date of the release, and the Corporation will pay all or a portion of such interest and notify the individual and the holder of the loan of the payment. (2) The percentage of the accrued interest that the Corporation will pay pursuant to paragraph (b)(1) of this section is equal to lesser of-- (i) The product of-- (A) The number of hours of service completed divided by the number of days for which forbearance was granted; and (B) 365 divided by 17; and (ii) 100. (3) The individual is responsible for the repayment of any accrued interest that is not paid by the Corporation pursuant to paragraph (b)(2) of this section. (4) If the individual does not successfully complete the required term of service and is not eligible for a pro-rated education award under Sec. 2527.10(c) of this chapter or pro-rated Stafford Loan Forgiveness under Sec. 2522.605(c) of this chapter, the Corporation will notify the holder of the loan of the circumstances and date of the individual's release but will pay no portion of the accrued interest. (c) Suspended service. The Corporation will not pay any interest expenses that accrue on an individual's qualified student loan(s) during a period of suspended service. Sec. 2529.30 What additional student loan forbearance benefits are available for VISTA volunteers? (a) VISTA volunteers may be eligible to have periodic installment payments of principal deferred for up to three years during periods of economic hardship, in accordance with the Higher Education Act of 1965, as amended. (b) VISTA volunteers also may qualify for interest benefits on Stafford loans from the Department of Education under 34 CFR 682.301. [FR Doc. 94-14231 Filed 6-14-94; 8:45 am] BILLING CODE 6820-BA-M