Sec. 4408. Distribution of assets from student loan funds for purposes of the Perkins loan program
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Section 466 of the Higher Education Act of 1965 ( 20 U.S.C. 1087ff ) is amended to read as follows: Beginning July 1, 2021, there shall be a capital distribution of the balance of the student loan fund established under this part by each institution of higher education as follows: For the quarter beginning July 1, 2021, the Secretary shall first be paid, no later than September 30, 2021, an amount that bears the same ratio to the cash balance in such fund at the close of June 30, 2021, as the total amount of the Federal capital contributions to such fund by the Secretary under this part bears to— the sum of such Federal contributions and the institution’s capital contributions to such fund, less an amount equal to— the institution’s outstanding administrative costs as calculated under section 463(b); outstanding charges assessed under section 464(c)(1)(H); and outstanding loan cancellation costs incurred under section 465.
At the end of each quarter subsequent to the quarter ending September 30, 2021, the Secretary shall first be paid an amount that bears the same ratio to the cash balance in such fund at the close of the preceding quarter, as the total amount of the Federal capital contributions to such fund by the Secretary under this part bears to— the sum of such Federal contributions and the institution’s capital contributions to such fund, less an amount equal to— the institution’s administrative costs incurred for that quarter as calculated under section 463(b); charges assessed for that quarter under section 464(c)(1)(H); and loan cancellation costs incurred for that quarter under section 465.
The Secretary shall calculate the amounts due to the Secretary under paragraph
(1)(adjusted in accordance with subparagraph (B), as appropriate) and paragraph
(2)and shall promptly inform the institution of such calculated amounts. In the event that, prior to the date of enactment of the College Affordability Act , an institution made a short-term, interest-free loan to the institution’s student loan fund established under this part in anticipation of collections or receipt of Federal capital contributions, and the institution demonstrates to the Secretary, on or before June 30, 2021, that such loan will still be outstanding after June 30, 2021, the Secretary shall subtract the amount of such outstanding loan from the cash balance of the institution’s student loan fund that is used to calculate the amount due to the Secretary under paragraph (1). An adjustment of an amount due to the Secretary under this subparagraph shall be made by the Secretary on a case-by-case basis. Any remaining balance at the end of a quarter after a payment under paragraph
(1)or
(2)shall be retained by the institution for use at its discretion. Any balance so retained shall be withdrawn from the student loan fund and shall not be counted in calculating amounts owed to the Secretary for subsequent quarters. Each institution shall make the quarterly payments to the Secretary described in paragraph
(2)until all outstanding Federal Perkins Loans at that institution have been assigned to the Secretary and there are no funds remaining in the institution’s student loan fund. In the event that the institution’s administrative costs, charges, and cancellation costs described in paragraph
(2)for a quarter exceed the amount owed to the Secretary under paragraphs
(1)and
(2)for that quarter, no payment shall be due to the Secretary from the institution for that quarter and the Secretary shall pay the institution, from funds realized from the collection of assigned Federal Perkins Loans made before July 1, 2021, an amount that, when combined with the amount retained by the institution under paragraphs
(1)and (2), equals the full amount of such administrative costs, charges, and cancellation costs. Beginning July 1, 2021, an institution of higher education may assign all outstanding loans made under this part before July 1, 2021, to the Secretary, consistent with the requirements of section 463(a)(5). In collecting loans so assigned, the Secretary shall pay an institution an amount that constitutes the same fraction of such collections as the fraction of the cash balance that the institution retains under subsection (a)(2), but determining such fraction without regard to subparagraph (B)(i) of such subsection. .
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Sec. 4408
Distribution of assets from student loan funds for purposes of the Perkins loan program
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