parent, or to have received $600 from a parent, or to have lived with a parent if that parent has died prior to the student's submission of an application for employment under the college work-study program, and if no person, other than the student's spouse, provides or will provide more than onehalf of the student's support for the first calendar year in which assistance is requested.

(42 U.S.C. 2751-2756)

"State" means, in addition to the several States of the Union, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands.

(20 U.S.C. 1141(b); 20 U.S.C. 1088(a))

"Supplemental educational opportunity grant program" or "SEOG program" means the grant program authorized by title IV, part A, subpart 2 of the Higher Education Act of 1965.

(b) (1) Initial allotment to States. Ninety percent of the sums remaining after the allotment of funds under paragraph (a) of this section will be allotted as set forth in section 442(b) of the Act.

(2) If the amount allotted to any State under paragraph (b)(1) of this section is less than its allotment for fiscal year 1972, additional sums will be allotted to that State from the sums remaining to make its allotment for that year equal to its allotment for

fiscal year 1972. (See appendix A for the amounts allotted to each State for fiscal year 1972.) If the funds available are insufficient to meet that level, the Commissioner will instead allot the remaining sums so that no State will receive less than a uniform minimum percentage of its fiscal year 1972 allotment.

(3) The Commissioner will allot the sums remaining, if any, after the allotment of funds under paragraph (a) of this section and paragraphs (b) (1) and (2) of this section, to those State(s) which received the lowest percentage of approved requests for funds as a result of the allotment under paragraphs (b) (1) and (2) of this section so that no State will receive less than a uniform minimum percentage of its total approved requests for funds.

(42 U.S.C. 2752)

(c) Amounts to be transferred to the State student financial assistance training program. (1) The Commissioner may transfer an amount equal to 0.05 percent of each State's initial allotment, as determined under paragraphs (a) and (b) of this section, or $10,000, whichever is less, to that State under the State student financial assistance training program authorized under section 493C of the Higher Education Act of 1965, if the State has submitted an approved application.

(2) Funds reserved for transfer to the State student financial assistance training program which have not been granted to the appropriate agency by the end of the fiscal year for which appropriated will be returned to that State's allotment under the college work-study program and may be allocated on an equitable basis to one or more institutions in that State.

(20 U.S.C. 1088b-3)

(d) Reallotment. The amount of any State's allotment which has not been granted to any institution at the end of the fiscal year for which appropriated or which has not been transferred to carry out the State student 'financial assistance training program will be reallotted by the Commissioner to those remaining States which received the lowest percentage of ap

proved requests for funds under paragraphs (b) and (c) of this section in such a manner that no State will receive less than a uniform minimum percentage of its total approved requests for funds.

(e) For purposes of paragraphs (b) and (d) of this section, the term "State" does not include Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, and the Virgin Islands.

(42 U.S.C. 2752)

§ 175.4 Allocation, reallocation, and payment of funds to institutions.

(a) Allocation of funds to institutions. When funds available for distribution among institutions within a State are not sufficient to honor all approved requests of institutions within that State, the sums that are available will be distributed on a pro rata basis among all institutional applicants in the State in the same ratio that the total funds available for the State, including any reapportionments, bears to the total approved requests for that State.

(b) Reallocation of funds. Funds allocated to an institution which the institution anticipates will not be used by the end of the period for which the funds were made available may be reallocated on an equitable basis to other institutions in that State.

(c) Payment of funds. Funds will be made available for a specific period of time as determined by the Commissioner and may be payable in advance or by way of reimbursement on the basis of substantiated need and periodic fiscal reports submitted by the institution.

(42 U.S.C. 2756)

§ 175.5 Institutional applications.

(a) Definitions. For purposes of this section and § 175.6

(1) "Base year" means the 12-month period ending on the June 30 preceding the closing date for filing the application;

(2) "Prior year" means the 12-month period preceding the base year;

(3) "Current year" means the 12month period ending on the June 30

immediately following the closing date for filing the application;

(4) "Request year" means the 12month period beginning on the July 1 immediately following the closing date for filing the application; and

(5) "Enrollment factor" means—

(i) For an institution which typically admits most new students in the fall, the factor obtained by dividing the fall enrollment for the current year by the fall enrollment for the base year; or

(ii) For an institution which does not typically admit most new students in the fall, the factor obtained by dividing the total enrollment for the base year by the total enrollment for the prior year.

(b)(1) If an institution wishes to participate in any of the campus-based programs, it must file an application with the Commissioner before an annually established closing date. That application must be filed in the form prescribed by the Commissioner and must contain the information needed by the Commissioner to carry out the evaluation specified in § 175.6. The application must also contain the information needed to determine whether the institution is in compliance with the maintenance of effort requirements set forth in § 175.20.

(2) The application must be signed by the official authorized to submit the application and must contain the names of the institution's Director of Student Financial Aid and of the individual who will be responsible for the receipt, custody, and disbursement of Federal funds. The application must also contain the following enrollment information:

(i) For an institution which typically admits most new students in the fall, the opening fall enrollment for the current year and for the base year. In addition, if its enrollment factor exceeds 1.20, a projection of the opening fall enrollment for the request year and an explanation of that projection;

(ii) If an institution which typically admits most new students in the fall was not in existence during the base year, its opening fall enrollment for the current year plus a projection of its opening fall enrollment for the re

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quest year and an explanation of that projection;

(iii) For an institution which does typically admit most new studends in the fall, the total enrollment for the base year and the prior year. In addition, if its enrollment factor exceeds 1.20, projections of the total enrollment for the current year and the request year and an explanation of those projections;

(iv) If an institution which does not typically admit most new students in the fall was not in existence during either the base year or the prior year, its actual total enrollment for the year, if any, during which it was in existence, plus a projection of its total enrollments for the current and request years and an explanation of that projection.

(c) Augmentation requests. If an institution makes an augmentation request as described in § 175.6(e), it must submit additional narrative information justifying its request.

(d) Correspondence schools. An application submitted by an institution offering only a program of study by correspondence (a) "correspondence school" must set forth, in addition to the information required by paragraph (b) of this section, (1) the number of students that have expected family contributions that are less than their costs of education in the current year and (2) the amount of basic grant funds which these students are entitled to receive for the current year. Those expected family contributions must be based on a need analysis of individual students performed in accordance with the standards and procedures used by need analysis systems approved under § 175.13.

(42 U.S.C. 2756)

§ 175.6 Funding procedures.

(a) Definitions. For purposes of this section

(1) "Aggregate request" means the sum of the institution's requests for the request year for

(i) Federal funds under the CWS and SEOG programs and

(ii) an approved level of expenditure ("level of lending") under the NDSL program; and

(2) "Funds available" means—

(i) With respect to the CWS or SEOG program, the amount of Federal funds granted the institution for its expenditure under that program during any award year, and

(ii) With respect to the NDSL program, the sum of the Federal capital contribution (FCC) granted the institution for any award year, plus an amount equal to one-ninth of that FCC, plus the amount of funds received by the institution as repayments from borrowers or as other income of its Fund for that award year, plus the cash balance in its Fund on July 1 of that award year.

(b) General. (1) The Commissioner will evaluate an application according to the procedures in paragraphs (c), (d), and (e) of this section to determine whether the institution's aggregate request is reasonably necessary to meet the needs of its students who are eligible for aid under the campusbased programs.

(2) The Commissioner will further review each application to determine whether the institution has made effective provisions to carry out the requirements of each of the campusbased programs for which it applies. In making that determination, the Commissioner will consider

(i) The institution's previous experience in administering each program,

(ii) The number, experience, and qualifications of the personnel chosen to administer the program,

of

(iii) The administrative arrangements the institution has made to comply with the requirements of § 175.14 concerning coordination programs and § 175.19 concerning separation of functions (and subpart C in the NDSL regulations (45 CFR part 144) concerning due diligence), and

(iv) Whether the institution has spent all the funds available to it under the campus-based programs during the base year and can be expected to spend all the funds available to it under those programs during the current year.

(c) Institutions not receiving funds in the base year. (1) If an institution did not have funds available to it in any of the campus-based programs

during the base year, the aggregate of its approved requests for those programs may not exceed the average expenditure per enrolled student during the base year at comparable institutions in the same area times an inflation factor of 1.12 times the applicant institution's approved projected enrollment as defined in paragraph (c) (2) or (3) of this section.

(2)(i) If an institution typically admits most of its new students in the fall, the Commissioner will calculate its approved projected enrollment for the request year by multiplying its opening fall enrollment in the current year by its enrollment factor, if that factor does not exceed 1.20.

(ii) If an institution does not typically admit most new students in the fall, the Commissioner will calculate its approved projected enrollment for the request year by multiplying its annual enrollment for the base year by the square of its enrollment factor, if that factor does not exceed 1.20.

(3) If an enrollment factor cannot be calculated for an institution because it was not in existence during one of the years used for calculation, or if an institution's enrollment factor is greater than 1.20, the Commissioner will evaluate the reasonableness of the institution's justification of its projected enrollment.

(4) If an institution applies for funds under the CWS program, the Commissioner will further evaluate the institution's request for that program in terms of

Institutions

Commissioner will either approve the institution's request or reduce it accordingly. (d) with base-year funds, base amounts. If an institution had funds available to it in the base year, its request for funds will be evaluated in the following manner:

(1) The institution establishes a base amount by choosing its first or second formula limit or an amount less than the lower of those figures.

(2) The institution's first formula limit is the product of its enrollment factor times

(i) An inflation factor of 1.12 times (ii) The sum of its expenditures for the campus-based programs during the base year.

(3) The institution's second formula limit is the product of its enrollment factor times

(i) An inflation factor of 1.06 times

(ii) The sum of the products obtained by multiplying the amount of funds available to the institution in each of the campus-based programs during the current year by the projection rate for that program.

(4) The projection rate referred to in paragraph (d)(3) of this section is the rate obtained by dividing the institution's expenditures in the base year in each of the campus-based programs by the total funds available to it in each program for that year. (For the CWS and SEOG programs this is the utilization rate reported on the annual fiscal operations report for those programs.)

(5) After the institution establishes its base amount, it may distribute that amount among the campus-based programs as it chooses. However, if it allocates to any program an amount greater than 110 percent of that program's share of the base amount, the amount in excess of 110 percent will be evaluated as an augmentation request in accordance with paragraph (e) of this section.

(6) The procedures described in paragraphs (d) (1) through (5) of this section are represented in the following table.

To be completed by all institutions which participated in one or more of the programs in the 12 months ending June 30, 1977. Enter "NA" for any program in which you did not participate. COMPLETE ALL COLUMNS.

Entries in column (A), "Base Year," must be derived from your Award Period 1976-77 Fiscal Operations Report. Entries in column (B), "Current Year," are derived from your Award Letters for the 12 months ending June 30, 1978. In Column (D), Authorization X Projection Rate = Projection. For CWS and SEOG, "projection rate" means the utilization rate reported on the annual fiscal-operations report.

Select Either 68 (A) or 68 (D) as your Formula Limit request and indicate the selection in the following boxes:

Distribute the Amount selected in the following boxes. The sum of lines 69 through 72 may not exceed the selected Formula Limit. 69. CWS Federal Funds

70 SEOG Initial Year

71 SEOG Continuing Year

72 NDSL Level of Lending