AmeriCorps Education Awards

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.

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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

[[Page 37414]]

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 filed by 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.

[[Page 37415]]

(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.

[[Page 37416]]

(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. 99-17059 Filed 7-9-99; 8:45 am]

BILLING CODE 6050-28-U