application meets the requirements of $178.2, the Commissioner shall on the basis of such information and periodic inquiries of the institution as to the enrollment status of the student borrower, determine the interest to be paid at the applicable rate on behalf of each student. (b) The payment shall be limited to: (1) The total amount of the interest on the unpaid principal balance of each loan which accrues prior to the beginning of the repayment period of such loan; and (2) Three percent per year of the unpaid principal balance of any such loan thereafter. (c) In no event shall payments under subparagraph (1) or (2) of paragraph (b) of this section include any interest on interest or any other charges which may have been added to principal or exceed the interest payable by the student. (d) The Commissioner's obligation to pay interest shall terminate (1) upon default by the borrower, or (2) upon a determination of the death or total and permanent disability of the borrower but (i) in cases where the repayment period has commenced, not later than 120 days following the failure to receive a regularly scheduled installment or (ii) in cases where the repayment period has not commenced, not later than 120 days following the holder's receipt of a request for loan cancellation on account of such causes. $178.39 Loan cancellation; death disability. or (a) In the event the borrower dies, the obligation to make any further payments of principal and interest shall be canceled. A determination as to whether or not a borrower is entitled to cancellation on account of death shall be made by the holder on the basis of a certificate of death or such other official proof as is conclusive under State law. (b) In the event the borrower becomes totally and permanently disabled, the obligation to pay any further payments of principal and interest shall be canceled. A determination based on medical evidence supplied by the borrower on forms provided by the Commissioner as to whether the borrower is entitled to cancellation of indebtedness on account of total and permanent disability shall be made by the holder, subject to the approval of the Commissioner. § 178.40 Procedures for filing claims. (a) General. The Commissioner will honor claims for reimbursement for loss on a loan insured pursuant to this subpart only if: (1) The loan is determined to be in default (as defined in § 178.1(n)) or has been canceled in accordance with § 178.39 or the borrower has been adjudicated a bankrupt; (2) the lender has used due diligence in attempting to effect collection of a defaulted loan; (3) a written demand for payment has been made on the borrower and any endorser on a defaulted note not less than 30 days nor more than 60 days prior to the filing of the claim for loss; and (4) the claim is supported by such documents as are required by the Commissioner. (b) Collection of loans. The lender shall use due diligence in the servicing and collection of loans insured under this subpart, and shall utilize collection practices no less extensive and forceful than those generally in force among financial institutions. (c) Filing of claim application. A claim for reimbursement for loss on an insured loan shall be filed on a form provided by the Commissioner and may be made at such time as the lender has determined, in the case of default, that the loan cannot be collected, or after such time as the lender determines the borrower to have died or become totally and permanently disabled or upon notification that the borrower has been adjudicated a bankrupt. Such claims shall be submitted together with the original or copies of all documents relating to the approval and servicing of the loan including all collection efforts made (whether by the original lender or by any subsequent holder) and in the case of a loan in default, an affidavit, on a form to be supplied by the Commissioner to the effect that to the best of the lender's knowledge and belief, the borrower is not entitled to deferment of the repayment of the principal of the loan as provided for in § 178.37 (e). In cases of loss on account of cancellation for death or total and permanent disability, the claim shall also be accompanied by the documents forming the basis for the determination. In cases of bankruptcy the claim shall be accompanied by copies of any correspondence, including proofs of claim, directed to or received from the referee in bankruptcy and any objections to the discharge of which the lender may be aware. (d) Assignment of note. Payment of a claim shall be contingent upon receipt of an assignment to the United States of America of all right, title and interest of the lender of the note on which the claim is filed, without warranty except that the note qualified for insurance under this subpart. § 178.41 tions. (d) The insurance coverage on notes transferred or assigned in accordance with the provisions of this section shall remain in full force and effect and any matters required to lenders in order to perfect a claim on such notes under this part may be performed by the transferee or assignee. Records, reports, and inspec- § 178.43 Termination of insurance. (a) The lender shall maintain complete and accurate records of all federally insured loan accounts which shall reflect each transaction so as to afford ready identification of each borrower's account and the status thereof and shall contain full and proper documentation to support a claim for loss. (b) The lender shall retain all records pertaining to each applicant to whom a loan is made until such time as the Commissioner has no further need for such records. (c) The lender shall submit such reports and information as the Commissioner may reasonably require in connection with the administration of the program, and will permit the Government's authorized representatives at any reasonable time to inspect its books and accounts insofar as they relate to loans insured under this subpart. § 178.42 Transfer of insured loan. (a) A loan insured under this subpart shall not be transferred or assigned, including assignment as security, except to another eligible lender. (b) The Commissioner shall be notified of any assignment of a note insured under this subpart where the right to receive interest payments has also been assigned. The borrower shall be notified of the assignment of any note insured under this subpart where the assignment results in his being required to make installment payments or direct other matters connected with the loan to another party. (c) The approval of the Commissioner is required prior to transfer or assignment of a note to any eligible lender who has not entered into an agreement with the Commissioner pursuant to this subpart. The Commissioner shall approve such transfer or assignment only if he has assurance that all matters required of lenders under this part will be complied with by one or more of the parties to such transfer or assignment. The agreement covering insurance of loans provided for in § 178.32 may be terminated after reasonable notice and an opportunity for a hearing, if the Commissioner finds the lender has failed to comply with any of the provisions of this part including (1) the exercise of reasonable care and diligence in the making and collection of loans, (2) payment of premiums required pursuant to § 178.36, or (3) the filing of such reports and the keeping of such records as may be required pursuant to § 178.41. After issuance to and the receipt of such notice by the lender, and pending action taken on the basis of a hearing, if any, the Commissioner shall no longer issue certificates of loan insurance pursuant to § 178.32(b). § 178.44 Forbearance. Nothing in this subpart shall be construed to preclude any forbearance for the benefit of the student borrower which may be agreed upon by the parties to the insured loan and approved by the Commissioner. Subpart A-General Provisions § 180.1 The purpose of this part is to set forth the provisions which apply to training institutes and grants authorized under Title IV of the Civil Rights Act of 1964, 78 Stat. 241. §180.2 Definitions. (a) "Commissioner" means the Commissioner of Education. (b) "Desegregation" means the assignment of students to public schools and within such schools without regard to their race, color, religion, or national origin, but "desegregation" shall not mean the assignment of students to public schools in order to overcome racial imbalance. (c) "Public School" means any elementary or secondary educational institution, provided that such public school is operated by a State, subdivision of a State, or governmental agency within a State, or operated wholly or predominantly from or through the use of governmental funds or property, or funds or property derived from a governmental source. (d) "School Board” means any agency or agencies which administer a system of one or more public schools and any other agency which is responsible for the assignment of students to or within such system. (e) "Special educational problems occasioned by desegregation" and "problems incident to desegregation" mean those problems (other than problems uniquely related to the assignment of students to public schools in order to overcome racial imbalance) arising from the assignment of students to and within public schools without regard to differences in their race, color, religion, or national origin. (f) Attendance at an institute on a - "full-time basis" means attendance at the institute in accordance with the policies and regulations regarding attendance in effect at the institution at which the individual is enrolled, as set forth in the institution's arrangement with the ► Commissioner. (g) An "Institute Day" means each day of a program of an institute which is scheduled to provide at least five hours of training. Subpart B-Training Institutes § 180.11 Arrangements with institution. The Commissioner will arrange, through grants or contracts, with institutions of higher education for the operation of short-term or regular session institutes for special training designed to improve the ability of teachers, supervisors, counselors, and other elementary or secondary school personnel to deal effectively with special educational problems occasioned by desegregation. § 180.12 Stipends other than travel allowances. An individual who attends an institute on a full-time basis shall be paid a stipend of $15 for each institute day of attendance up to $75 per week. In the event that participation in an institute is interrupted or is terminated prior to completion of the institute program, stipend payment shall be made to the individual for such period as he was in attendance on a full-time basis. § 180.13 Travel allowances. (a) An individual who attends an institute on a full-time basis may be provided travel, or an allowance for his actual cost of travel, from place of residence or employment to place of the institute, and from place of the institute to his place of residence or employment, as set forth in the institution's arrangement with the Commissioner, but not to exceed nine cents per mile. The allowance for travel in the case of travel by private automobile shall be at the rate of nine cents per mile. In the case of joint travel by private automobile by a group of participants, travel allowances shall be payable only to one of such participants, but without reduction on account of contribution to him by the other participants. (b) In addition to the limitations of paragraph (a) of this section, when air, rail, or steamship transportation is used, first-class accommodations or an allowance therefor may be provided only where first-class accommodations are the only class of service for the most direct travel route, or where less than first-class accommodations result or would result in greater cost than first-class accommodations. (c) In the event that an individual's participation in an institute is terminated prior to his completion of the institute As used in this part: (a) The term "Commissioner" means the U.S. Commissioner of Education. (b) The term "desegregation" means the assignment of students to public schools and within such schools without regard to their race, color, religion, or national origin, but "desegregation" does not mean the assignment of students to public schools in order to overcome racial imbalance. (42 U.S.C. 2000c) (c) The term "local educational agency" means a public board of education or other public authority legally constituted within a State either for administrative control or direction of, or to perform a service function for, public elementary or secondary schools in a city, county, township, school district, or other political subdivision of a State, or such combination of school districts or counties as are recognized in a State as an administrative agency for its public elementary or secondary schools, or a combination of local educational agencies; and includes any other public institution or agency having administrative control and direction of a public elementary or secondary school. (20 U.S.C. 881) (d) The term "minority group" with reference to any person or persons, means a person or persons of Negro, AmericanIndian, Spanish-surnamed American, or Oriental ancestry. (e) The term "nonprofit" as applied to an agency, organization, or institution means an agency, or organization, or institution owned or 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. (20 U.S.C. 881) (f) The term "person" includes an individual, group, organization, corporation, association, or other entity. (g) The term "property" includes real or personal property. (Public Law 91 380) (h) The term "secondary school" means a school which provides secondary education, as determined under The purpose of the emergency assistance to be made available under the program described in this part is to meet special needs during the 1971-72 academic year incident to the elimination of racial segregation and discrimination among students and faculty in elementary and secondary schools by contributing to the costs of new or expanded activities to be carried out by local educational agencies or other agencies organizations, or institutions and designed the elimination of all forms of discrimito achieve successful desegregation and nation in the schools on the basis of race, color, religion, or national origin. § 181.3 Eligibility. (a) (1) Assistance under the program may be made available to a local educational agency which is implementing a plan for the desegregation of its schools, which plan (i) has been undertaken pursuant to a final order of a court of the United States or of any State, or of a State administrative agency of competent jurisdiction, issued or modified on or after April 20, 1971, pursuant to constitutional requirements as set forth by the U.S. Supreme Court in "Swann v. Charlotte-Mecklenburg Board of Education," and its companion cases, or (ii) has been approved by the Secretary, on or after such date as adequate under title VI of the Civil Rights Act of 1964, and (iii) imposes new or additional desegregation requirements for the 1971-72 school year over and above those implemented by the school district in any prior year. (2) Commencing 30 days after the effective date of this part, as amended, assistance may also be made available to a local educational agency which is implementing a plan for the desegregation of its schools, which plan would have made the local educational agency eligible for assistance under subparagraph (1) of this paragraph but for the fact that the applicable court order or title VI approval was issued prior to April 20, 1971: Provided however, That in any State a local educational agency which is eligible for assistance under subparagraph (1) of this paragraph shall be accorded priority over such an agency in that State which is eligible therefor under this subparagraph (2). (3) Commencing 30 days after the effective date of this part, as amended, such assistance may also be made available to a local educational agency which is implementing a plan for the desegregation of its schools with respect to which plan assistance was furnished (and not terminated) under this program prior to July 1, 1971: Provided however, That in any State a local educational agency which is eligible for assistance under subparagraph (1) or (2) of this paragraph shall be accorded priority over such an agency in that State which is eligible under this subparagraph (3). (4) A local educational agency shall be ineligible for such assistance if it has engaged directly or indirectly in a transfer of property or services to or for the benefit of a nonpublic school or school system which practices discrimination on the basis of race, color, or national origin (or a person intending to establish or operate such a school or school system) (i) where such transfer (a) was for less than full value and (b) was. effected after May 27, 1968 ("Green v. County School Board of New Kent County, Virginia," 391 U.S, 430), or (ii) where such transfer was by local educational agency which had applied for and received assistance under the program prior to July 1, 1971. (Public Law 91-380) (b) In any case where the Commissioner finds that it would more effectively carry out the purposes of the program, he may make a grant to any public or nonprofit private agency, organization, or institution (other than a local educational agency), and contract with any public or private agency, institution, or organization to assist in the implementation of one or more desegregation plans described in paragraph (a) of this section. (c) The Commissioner initially will reserve for use pursuant to paragraph (b) of this section 10 percent of the funds made available for the program. Any of such reserved funds not used pursuant to paragraph (b) of this section within such time as the Commissioner may determine will be made available for use by local educational agencies pursuant to paragraph (a) of this section. (Pub. Law 91-380 and Pub, Law 92-38) |