37

1 any interest payments so deferred shall themselves bear 2 interest. The Commissioner shall also from time to time 3 (not less often than annually) transfer from the fund, to 4 the credit of the appropriation (current at the time of such 5 transfer) for salaries and expenses of the Office of Educa6 tion, an amount that in his judgment constitutes a reasonable 7 estimate of the normal administrative expenses of the Office 8 incurred, or to be incurred, in connection with operations 9 of the Commissioner under this section during the period 10 covered by the transfer. If at any time the Commissioner 11 determines that moneys in the fund exceed the present and 12 any reasonably prospective future requirements of the fund, 13 such excess may be transferred to the general fund of the 14 Treasury."

15

(2) Section 201 of the National Defense Education 16 Act of 1958 is amended by striking out the last sentence and 17 substituting therefor the following: "Sums appropriated un18 der this section shall be available (1) in accordance with 19 agreements between the Commissioner and institutions of 20 higher education, for payment of Federal capital contribu21 tions which, together with contributions from the institutions, 22 shall be used for establishment and maintenance of student 23 loan funds in accordance with agreements pursuant to section

38

1 204, and (2) to the extent determined by the Commissioner 2 not to be required for the foregoing purpose, for payments

3 into the loan fund established by section 207 (d).”

4

(3) Section 208 of such Act is amended by substitut5 ing "title" for "subsection" in the parenthetical phrase.

6

(b) (1) Section 202 of the National Defense Education 7 Act of 1958 (relating to allotments of appropriations among 8 States), as amended by section 451 of this Act, is further 9 amended by inserting " (for payment as Federal capital con10 tributions or as loans to institutions under section 207)" after 11 "the Commissioner shall allot to each State" in the first sen12 tence of subsection (a), and by redesignating subsection (b) as subsection (c) and inserting after subsection (a) the fol14 lowing new subsection:

13

15

"(b) Funds available in any fiscal year for payment to 16 institutions under this title (whether as Federal capital con17 tributions or as loans to institutions under section 207) which 18 are in excess of the amount appropriated pursuant to section 19 201 for that year shall be allotted among the States in such

20

manner as the Commissioner determines will best carry out

21 the

the purpose of this Act."

(2) Section 203 of such Act (relating to the payment

39

1 of Federal capital contributions to institutions), including the

2 heading thereof, is amended to read as follows:

3 "DISTRIBUTION AMONG INSTITUTIONS OF FEDERAL CAP

4

ITAL CONTRIBUTIONS AND INSTITUTIONAL LOANS

5

"SEC. 203. (a) The Commissioner shall from time to

6 time set dates by which institutions of higher education in

7

a State must file applications for Federal capital contribu8 tions, and for loans pursuant to section 207, from the allot9 ment of such State under section 202 (a). In the event 10 the total requested in such applications (which meet the re11 quirements established in regulations of the Commissioner) 12 exceeds the amount of such allotment of such State available 13 for such purpose, the total of the Federal capital contribu14 tions and loans from such allotment to each such institution 15 shall bear the same ratio to the amount requested in its 16 application as the amount of such allotment available for 17 such purpose bears to the total requested in all such appli18 cations. In the event the total requested in such applications which are made by institutions in a State is less than the 20 amount of the allotment of such State available for such purpose, the Commissioner may reallot the remaining amount 22 from time to time, on such date or dates as the Commis

40

1 sioner may fix, to other States in proportion to the original 2 allotments to such States under section 202 for such year. 3 "(b) Sums allotted among States pursuant to section 4 202 (b) shall be allocated among institutions within States 5 in such manner as the Commissioner determines will best carry out the purposes of this Act.

6

7

"(c) The Federal capital contribution to an institution 8 shall be paid to it from time to time in such installments as 9 the Commissioner determines will not result in unnecessary 10 accumulations in the student loan fund established under its agreement under section 204 of this title."

11

12 (c) (1) So much of section 206 (a) of such Act as

233

13

precedes paragraph (1) is amended by striking out "this 14 title" and inserting in lieu thereof "an agreement pursuant 15 to section 204".

16

(2) Paragraph (1) of such section 206 (a) is amended 17 by striking out "the balance" and inserting in lieu thereof 18 "such balance";

19

(3) Such section 206 is further amended by adding

20 at the end thereof the following subsection:

21

"(d) Subsections (a) and (c) shall not apply to a

22 separate student loan fund or account established by an

41

1 institution pursuant to section 207 (a) (2) of such Act with 2 the proceeds of a loan to the institution from the national 3 defense education loan fund, and subsection (b) shall not 4 apply to amounts of principal or interest on student loans 5 made from such separate student loan fund or account." 6 (d) (1) The amendments made by this section shall 7 be effective in the case of payments to student loan funds 8 made on or after June 30, 1967, or on or after the date 9 of enactment of this Act, whichever date is later, except 10 that such amendments shall not be effective with respect

11

to payments pursuant to commitments (made prior to enact12 ment of this Act) to make loans under section 207 of the 13 National Defense Education Act of 1958 as in effect prior to the enactment of this Act.

14

15

(2) The Commissioner of Education is authorized, at 16 the request of any institution, to take such steps as are 17 necessary to convert a Federal capital contribution to a 18 student loan fund of such institution, made pursuant to title 19 II of the National Defense Education Act from funds appro20 priated pursuant to section 201 for the fiscal year ending 21 June 30, 1968, to a loan under section 207 as amended by 22 this Act.