(4) Supervisory methods and procedures to be employed in local guidance and counseling programs under the plan. (5) Coordination methods and procedures to provide assurance of appropriate relationships between the local guidance and counseling program under the plan, and other related services available to students.

(6) Categories of expenditures in local guidance and counseling programs (§ 143.34) to be included by the State educational agency as a part of the total amount expended to earn its allotment under section 502(a) of the Act.

(b) The State plan may also provide for the establishment of guidance and counseling programs designed to meet special needs of students or unusual circumstances in the community in which the local agency is located, such as cultural differences, economic deprivation, dropouts, and youth unemployment. The plan shall provide that any such special programs be consistent with §§ 143.26 and 143.33, and describe the conditions under which the State will establish such programs including provisions for State supervision, evaluation, and reports to the Commissioner.

§ 143.36 Transition provisions.

State plan. A State plan approved prior to the promulgation of these revised regulations remains in effect through June 30, 1965, unless prior to June 30, 1965, the State plan is revised to be in accord with these revised regulations. After June 30, 1965, in order for a State to receive payments under Title V-A of the Act, the State plan must have been revised to be in conformity with the revised regulations.

144.12 144.13

Compliance by institutions.

Preceding provisions not exhaustive of jurisdiction of the Commissioner.

AUTHORITY: The provisions of this Part 144 issued under secs. 201 to 209, 72 Stat. 158387, as amended; 20 U.S.C. 421-429.

SOURCE: The provisions of this Part 144 appear at 31 F.R. 7463, May 24, 1966, unless otherwise noted.

§ 144.1 Policy and purposes of the National Defense Student Loan Fund Program.

The National Defense Education Act of 1958, Public Law 85-864 (amended), affirmed the need to identify and educate more of the Nation's talented young men and women, and to develop programs through which the fullest development of their mental resources and technical skills may be realized. Title II of the Act initiates the National Defense Student Loan Program, under which National Defense Student Loan Funds will be established at participating institutions of higher education throughout the United States for the purpose of making long-term, low-interest loans to qualified students who are in need of such financial assistance in order to pursue at least a half-time course of study at such institutions. The Program includes provisions designed to encourage additional education on the part of students with a superior academic background. The Program also includes provisions designed to attract an additional number of superior students to the teaching profession for service at the elementary and secondary school levels and at institutions of higher education.

§ 144.2 Definitions.

(a) The Act. "The Act" means the National Defense Education Act of 1958, Public Law 85-864, 20 U.S.C. Chapter 17 as amended.

(b) State. The term "State" for purposes of this part, means a State, Puerto Rico, the District of Columbia, the Canal Zone, Guam, American Samoa, or the Virgin Islands.

(c) Institution of higher education. "Institution of higher education" or "institution" means an educational institution in any State which meets the requirements set forth in section 103(b) of the Act. The term "educational insti

tution" limits the scope of this definition to establishments at which teaching is conducted and which have an identity of their own. The separate identity of such establishments is generally reflected by their being incorporated or chartered for such purposes in their own right, or by their receiving a separate listing in Part III of the Office of Education "Education Directory".

(d) Public. The term "public" as applied to any school or institution includes a school or institution of any agency of the United States, except that no such school or institution shall be eligible to receive any grant, loan or other payment under this Act.

(e) Nonprofit. The term "nonprofit," as applied to a school or institution, means a school or institution owned and operated by one or more nonprofit corporations or associations no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

(f) Commissioner. The term "Commissioner" means the Commissioner of Education.

(g) State educational agency. The term "State educational agency" means the State board of education or other agency or officer primarily responsible for the State supervision of public elementary and secondary schools, or, if there is no such officer or agency, an officer or agency designated by the governor or by State law.

The

(h) Local educational agency. term "local educational agency" means a board of education or other legally constituted local school authority having administrative control and direction of public elementary or secondary schools in a city, county, township, school district, or political subdivision in a State, or any other public institution or agency having administrative control and direction of a public elementary or secondary school.

degree. (i) Bachelor's "Bachelor's degree" means a degree which requires completion by the recipient of a total of not less than the equivalent of 4 years of academic study at the college (including graduate and professional

school) level.

(j) Institutional application to participate in the National Defense Student Loan Program. An "institutional application to participate in the National Defense Student Loan Program" consists

of

(1) A proposed agreement between the Commissioner and the institution pursuant to section 204 of the Act for payment of Federal capital contributions into a National Defense Student Loan Fund at such institution;

(2) An application in such form as the Commissioner may require, for a Federal capital contribution pursuant to section 203 of the Act; and

(3) If the institution's capital contribution is to be financed in whole or in part through a Federal institutional loan, an application in such form as the Commissioner may require, for a Federal institutional loan.

(k) National Defense Student Loan Fund. "National Defense Student Loan Fund" or "Fund" means the fund established pursuant to section 204 of the Act at an institution with which the Commissioner has executed an agreement, such fund being composed of Federal capital contributions, institutional capital contributions, repayments of capital and interest, charges collected pursuant to § 144.8 (h), and any other earnings of the fund.

(1) Federal capital contribution. "Federal capital contribution" means the capital portion contributed by the Commissioner to a National Defense Loan Fund pursuant to section 203 of the Act.

(m) Federal institutional loan. "Federal institutional loan" means a loan made by the Federal Government pursuant to section 207 of the Act to an institution, the proceeds of which are to be deposited by such institution in its National Defense Student Loan Fund.

(n) Institutional capital contribution. "Institutional capital contribution” means the money deposited into a National Defense Student Loan Fund by the institution in an amount not less than one-ninth of the Federal capital contributions thereto.

(0) National of the United States. "National of the United States" means (1) a citizen of the United States or (2) a person who though not a citizen of the United States owes permanent allegiance to the United States (8 U.S.C.A. 1101(a) (22)).

(q) Full-time attendance. "Full-time attendance" means compliance by a fulltime student with the policies and regulations regarding attendance in effect at the institution in which he is enrolled.

(r) Half-time student. "Half-time student," or "student enrolled on at least a half-time basis," means a student who is carrying at least one-half of the normal full-time academic workload as determined by the institution where he is enrolled.

(s) Professional or graduate student. "Professional or graduate student" means, in general, a student who is enrolled in an academic program of instruction above the college level which is provided at an institution of higher education. The term includes (1) that portion of any program involving a period of study beyond 4 years of study at the college level, or (2) any portion of a program leading to (i) a degree beyond the bachelor's or first professional degree, or (ii) a first professional degree, when at least 3 years of study at the college level are required for entrance into a program leading to such degree.

(t) Satisfactory standing, good standing. The terms "satisfactory standing" and "good standing" mean the eligibility of a student to continue in attendance at the institution where he is enrolled as a student in accordance with the institution's standards and practices.

(u) Full-time teacher. "Full-time teacher" for the purpose of section 205(b)(3) of the Act means:

(1) In the case of an elementary or secondary school teacher, an individual professionally employed on a full-time basis, and regularly engaged in carrying out the instructional programs of an elementary or secondary school.

While

the term generally includes classroom teachers and their supervisors, it may also include other personnel such as school librarians and guidance counselors meeting the above requirements; and

(2) In the case of a teacher in an institution of higher education, an individual professionally employed by such institution and who is regarded by the institution for purposes of salary, tenure, academic rank, or similar purposes as being engaged on a full-time basis in activities primarily concerned with rendering direct and personal services either in the instructional program or in a capacity directly related to the im

provement of the students' educational development at such institution.

(v) Elementary school. "Elementary school" means a school which provides elementary education, as determined under State law or, if such school is not in any State, as determined by the Commissioner.

(w) Secondary school. "Secondary school" means a school which provides secondary education, as determined under State law or, if such school is not in any State, as determined by the Commissioner, except that it does not include any education provided beyond grade 12. (x) Academic year or its equivalent. "Academic year or its equivalent" means:

(1) In general, the number of credit hours which a student must acquire during any one school year in order to secure the degree or certificate toward which he is working in the number of semesters or terms normally taken therefor at the institution where he is pursuing a course of study; and

(2) For purposes of section 205(b) (3) of the Act, means any two complete semesters, two complete trimesters or, three complete quarters falling within a school year of approximately 12 months duration.

(y) Fiscal year. "Fiscal year" means the Federal fiscal year commencing on the 1st day of July and ending on the 30th day of June.

(z) Permanently and totally disabled. "Permanently and totally disabled" means the inability to engage in any substantial gainful activity because of a medically determinable impairment, which impairment is expected to continue for a long and indefinite period of time, or to result in death, such disability to be determined on the basis of the report of a physician on such forms as the Commissioner may prescribe.

(aa) Routine expenses. "Routine expenses," for purposes of section 204(3) (C) of the Act, means the normal or typical expenses incurred by the lending institution in its exercise of the general and normal administration of the National Defense Student Loan Program. This includes activities such as those involving receiving and processing applications for loans, approving of loans, accounting for and reporting Fund transactions, and normal collection efforts.

(bb) Other collection costs. "Other collection costs," for purposes of section 204(3) (D) of the Act, means such extra identifiable costs of collection that are

in excess of the routine expenses incurred in the collection of student loan notes, but does not include costs of employing individual contractors or agents to handle collection duties that reasonably may be expected to be performed by the lending institution's own personnel.

§ 144.3

Allotment and reallotment of Federal capital contributions to States.

(a) Allotment. From sums appropriated for Federal capital contributions for any fiscal year ending prior to July 1, 1968, the Commissioner shall allot to each State an amount which bears the same ratio to the amount so appropriated pursuant to section 201 of the Act, as the number of persons enrolled on a full-time basis in institutions in each of such States bears to the total number of persons enrolled on a fulltime basis in institutions of higher education in all of the States. For the purposes of this paragraph, the number of persons enrolled on a full-time basis in institutions of higher education shall be determined by the Commissioner for the most recent year for which satisfactory data are available to him.

(b) Reallotment. In the event that the allotment for Federal capital contributions made to a State under paragraph (a) of this section exceeds the total Federal capital contributions made to the institutions within such State, for a given fiscal year, the unused portion of such allotment may be reallotted from time to time, on such date or dates as the Commissioner may fix, to other States in proportion to the original allotments to such States for such fiscal year, except that such reallotments shall be made only (1) to the States in which allotments are insufficient to meet the requests for Federal capital contributions which have been reviewed and approved by the Commissioner in accordance with § 144.4(a) (3), and (2) to the extent necessary to meet such requests in any such State. § 144.4 Institutional applications.

(a) Applications for Federal capital contributions. (1) Applications for Federal capital contributions shall be filed by institutions in such form and manner as may be prescribed by the Commissioner.

(2) The Commissioner shall from time to time issue a notice setting a date by which an institution must file the application in order to be eligible to receive

a Federal capital contribution for the period stated in such notice.

(3) The amount requested in each application for a Federal Capital contribution shall be reviewed and approved by the Commissioner for the purposes of section 203 (a) of the Act in the light of the demands which may reasonably be expected to be made upon the Fund during the period covered by the application after taking into consideration the balance in the Fund. When necessary to this end the Commissioner may require the submittal of additional data.

(b) Application for Federal institutional loan. (1) Each application for a Federal institutional loan shall include a statement of supporting data on which there shall be provided such information as the Commissioner may require (including information relative to the terms and conditions under which such funds are available from non-Federal sources) in order to make the necessary determinations under section 207(a) of the Act.

(2) The amount requested in each application for a Federal institutional loan shall be reviewed and approved by the Commissioner in the light of the requirements of section 207(a) of the Act and the amount of the Federal capital contribution that has been reviewed and approved in accordance with paragraph (a) (3) of this section.

(c) Agreement for Federal capital contributions. (1) The institutional application to participate in the National Defense Student Loan Program shall also include a proposed agreement, signed by an authorized representative of the applicant institution, which shall be submitted for consideration and concurrence by the Commissioner.

(2) No application for a Federal capital contribution or for a Federal institutional loan shall be approved unless there is in effect an agreement between the Commissioner and the applicant institution for Federal capital contributions pursuant to section 204 of the Act.

(3) The agreement shall provide for the following items: (1) Establishment of a Student Loan Fund by the institution; (ii) deposit in the Fund of (a) the Federal capital contributions, (b) the institutional capital contributions, equal to not less than one-ninth of the Federal contributions, (c) collections of principal and interest on student loans made from the Fund, (d) charges collected pursuant to section 205(c) of the

Act, and (e) other earnings of the Fund; (iii) that the Fund be used only for (a) loans to students in accordance with the agreement, (b) capital distributions as provided in section 206 of the Act, (c) routine expenses incurred by the institution in administering the Fund, not exceeding the lesser of either one-half of the routine expenses as estimated for that year by the Commissioner or one per centum of the aggregate of the outstanding loans made from the fund as of the close of that year, and (d) costs of litigation, and other collection costs agreed to by the Commissioner arising in connection with the collection of a loan, the interest thereon or a charge assessed with respect to the loan pursuant to section 205 (c) of the Act; (iv) that in the selection of students to receive loans from such student loan fund special consideration shall be given to students with a superior academic background; and (v) include such other provisions as may be necessary to protect the financial interest of the United States and promote the purposes of this part and as are agreed to by the Commissioner and the institution.

Federal institutional loans shall be made subject to the terms of a note which shall be executed by an official who is duly authorized to execute such notes on behalf of the borrowing institution. Such loans shall be used only for institutional capital contributions to the borrower's National Defense Student Loan Fund. Each such note shall include such terms with respect to the payment of interest and repayment of capital as are not inconsistent with section 207(a) of the Act and shall include such other terms which the Commissioner finds necessary to protect the financial interest of the United States and to promote the purposes of the Act.

plications for the Federal capital contributions from a State exceeds that State's current allotment therefor, the amount of the Federal capital contribution that can be made available to any applicant institution from that allotment shall bear the same ratio to such requested amount as the amount of the State's allotment bears to the total of such requested amounts within the State.

(2) In the event that an institution which has applied for a Federal institutional loan is unable to secure the necessary amount of loan funds from the Commissioner or otherwise to secure such funds as may be required in order to make the necessary institutional capital contribution, the amount of the Federal capital contribution which could have been offered to such institution pursuant to subparagraph (1) of this paragraph shall be reduced to an amount equal to not more than nine times the amount of such institutional capital contribution as the institution is able to make to the Fund.

(3) If an institution fails to accept all of the Federal capital contributions that have been offered to it, the amount represented by such unaccepted offer shall be restored as part of the State's allotment.

(4) When funds that have been restored as a part of a State's allotment are sufficient to increase significantly the amount of the Federal capital contribution that can be made available to other institutions within the State, they shall be offered to such institutions whose requests for Federal capital contributions were reduced pursuant to subparagraphs (1) and (2) of this paragraph.

(b) Allocation of Federal institutional loans. (1) Federal institutional loans shall be made by the Commissioner upon the basis of his review of the data that are provided to him in the application for a Federal institutional loan.

(2) In the event that the funds available for the purpose of making Federal institutional loans are insufficient to satisfy the requests to which institutions would otherwise be entitled in accordance with § 144.4 (b) (2), the Commissioner shall allocate such available funds among all of such requests therefor in the same ratio as the amount of each such request bears to the sums of the amounts of all such requests.

(3) If an institution fails to accept all of the funds that would otherwise be loaned to it, the Commissioner shall re