Sec. 4043. Allocation of funds

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Section 413D of the Higher Education Act of 1965 ( 20 U.S.C. 1070b–3 ) is amended to read as follows: From the amount appropriated under section 413A(b)(1) for a fiscal year, the Secretary shall allocate to each institution— for fiscal year 2021, an amount equal to the greater of— 90 percent of the amount the institution received under subsection

(a)for fiscal year 2020, as such subsection was in effect with respect to such fiscal year (in this subparagraph referred to as the 2020 amount for the institution ); or the fair share amount for the institution determined under subsection (c); for fiscal year 2022, an amount equal to the greater of— 80 percent of the 2020 amount for the institution; or the fair share amount for the institution determined under subsection (c); for fiscal year 2023, an amount equal to the greater of— 60 percent of the fiscal year 2020 amount for the institution; or the fair share amount for the institution determined under subsection (c); for fiscal year 2024, an amount equal to the greater of— 40 percent of the 2020 amount for the institution; or the fair share amount for the institution determined under subsection (c); and for fiscal year 2025, an amount equal to the greater of— 20 percent of the 2020 amount for the institution; or the fair share amount for the institution determined under subsection (c). If the amount appropriated under section 413A(b)(1) for a fiscal year is less than the amount required to be allocated to the institutions under this subsection, then the amount of the allocation to each institution shall be ratably reduced. If the amounts allocated to each institution are ratably reduced under subparagraph

(A)for a fiscal year and additional amounts are appropriated for such fiscal year, the amount allocated to each institution from the additional amounts shall be increased on the same basis as the amounts under subparagraph

(A)were reduced (until each institution receives the amount required to be allocated under this subsection). From the amount appropriated under section 413A(b)(1) for fiscal year 2026 and each succeeding fiscal year, the Secretary shall allocate to each institution the fair share amount for the institution determined under subsection (c). Subject to paragraph (2), the fair share amount for an institution for a fiscal year shall be equal to the sum of the institution’s undergraduate student need described in paragraph

(2)for the preceding fiscal year. The institutional undergraduate student need for an institution for a fiscal year shall be equal to the sum of the following: An amount equal to 50 percent of the amount that bears the same proportion to the available appropriated amount for such fiscal year as the total amount of Federal Pell Grant funds awarded at the institution for the preceding fiscal year bears to the total amount of Federal Pell Grant funds awarded at all institutions participating under this part for the preceding fiscal year. An amount equal to 50 percent of the amount that bears the same proportion to the available appropriated amount for such fiscal year as the total amount of the undergraduate student need at the institution for the preceding fiscal year bears to the total amount of undergraduate student need at all institutions participating under this part for the preceding fiscal year. The Secretary may not allocate funds under this subpart to any institution that, for 2 or more fiscal years during any 3 fiscal year period beginning not earlier than the first day of the first fiscal year that is 2 years after the date of the enactment of this paragraph, has a student population with less than 7 percent of undergraduate students who are recipients of Federal Pell Grants. In this section: The term average cost of attendance has the meaning given the term in section 4202(e)(5)(B). The term undergraduate student need means, with respect to an undergraduate student for an award year, the lesser of the following: The total of the amount equal to (except the amount computed by this clause shall not be less than zero)— the average cost of attendance for the award year, minus such undergraduate student’s expected family contribution (computed in accordance with part F of this title) for the preceding award year. The total loan annual limit for a Federal Direct Unsubsidized Stafford Loan and a Federal Direct Loan. .

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20 USC 1070b–3

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Sec. 4043

Allocation of funds

Cite20 USC 1070b–3

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