Allocation of funds

From the amount appropriated pursuant to section 1087aa(b) 11 See References in Text note below. of this title for each fiscal year, the Secretary shall first allocate to each eligible institution an amount equal to— From the amount so appropriated, the Secretary shall next allocate to each eligible institution that began participation in the program under this part after fiscal year 1999 but is not a first or second time participant, an amount equal to the greater of— From the amount so appropriated, the Secretary shall next allocate to each eligible institution that began participation in the program under this part after fiscal year 1999 and is a first or second time participant, an amount equal to the greatest of— Notwithstanding subparagraphs (A) and (B) of this paragraph, the Secretary shall allocate to each eligible institution which— For any fiscal year after a fiscal year in which an institution receives an allocation under subparagraph (A), (B), or (C), the Secretary shall allocate to such institution an amount equal to the product of— If the amount appropriated for any fiscal year is more than the amount required to be allocated to all institutions under paragraph (1) but less than the amount required to be allocated to all institutions under paragraph (2), then— For any eligible institution, the excess eligible amount is the amount, if any, by which— For any eligible institution, the eligible amount of that institution is equal to— To determine the self-help need of an institution’s eligible undergraduate students, the Secretary shall— multiply the number of eligible dependent students in each income category by the lesser of— multiply the number of eligible independent students in each income category by the lesser of— To determine the self-help need of an institution’s eligible graduate and professional students, the Secretary shall— For any fiscal year preceding fiscal year 2000, any institution with a cohort default rate that— For fiscal year 2000 and any succeeding fiscal year, any institution with a cohort default rate (as defined under subsection (g)) that equals or exceeds 25 percent shall have a default penalty of zero. For fiscal year 2000 and any succeeding fiscal year, any institution with a cohort default rate (as defined in subsection (g)) that equals or exceeds 50 percent for each of the 3 most recent years for which data are available shall not be eligible to participate in a program under this part for the fiscal year for which the determination is made and the 2 succeeding fiscal years, unless, within 30 days of receiving notification from the Secretary of the loss of eligibility under this paragraph, the institution appeals the loss of eligibility to the Secretary. The Secretary shall issue a decision on any such appeal within 45 days after the submission of the appeal. Such decision may permit the institution to continue to participate in a program under this part if— During an appeal under subparagraph (A), the Secretary may permit the institution to continue to participate in a program under this part. Within 90 days after the date of any termination pursuant to subparagraph (A), or the conclusion of any appeal pursuant to subparagraph (B), whichever is later, the balance of the student loan fund established under this part by the institution that is the subject of the termination shall be distributed as follows: Any funds returned to the Secretary under this paragraph shall be reallocated to institutions of higher education pursuant to subsection (i). For the purposes of subparagraph (A), the term “loss of eligibility” shall be defined as the mandatory liquidation of an institution’s student loan fund, and assignment of the institution’s outstanding loan portfolio to the Secretary. For award years prior to award year 2000, the applicable maximum cohort default rate is 30 percent. For award year 2000 and subsequent years, the applicable maximum cohort default rate is 25 percent. In determining the number of students who default before the end of such award year, the institution, in calculating the cohort default rate, shall exclude— any loan on which the borrower has, after the time periods specified in paragraph (2)— For purposes of calculating the cohort default rate under this subsection, a loan shall be considered to be in default— The Secretary shall, from time to time, set dates before which institutions must file applications for allocations under this part. For the purpose of this subsection, the term “participating institution” means an institution of higher education that— For any participating institution, the excess eligible amount is the amount, if any, by which— The Secretary shall reallocate the remainder of such returned portions in accordance with regulations of the Secretary. If under paragraph (1) of this subsection an institution returns more than 10 percent of its allocation, the institution’s allocation for the next fiscal year shall be reduced by the amount returned. The Secretary may waive this paragraph for a specific institution if the Secretary finds that enforcing it is contrary to the interest of the program.