112 STAT. 1722 PUBLIC LAW 105-244 —OCT. 7, 1998 Deadlines. Deadline. "(2) YEARS FOLLOWING FISCAL YEAR 2000. —For fiscal year 2000 and any succeeding fiscal year, any institution with a cohort default rate (as denned under subsection (g)) that equals or exceeds 25 percent shall have a default penalty of zero. " (3) INELIGIBILITY. — "(A) IN GENERAL. —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— "(i) the institution demonstrates to the satisfaction of the Secretary that the calculation of the institution's cohort default rate is not accurate, and that recalculation would reduce the institution's cohort default rate for any of the 3 fiscal years below 50 percent; or "(ii) there Eire, in the judgment of the Secretary, such a small number of borrowers entering repayment that the application of this subparagraph would be inequitable. "(B) CONTINUED PARTICIPATION. —During an appeal under subparagraph (A), the Secretary may permit the institution to continue to participate in a program under this part. (C) RETURN OF FUNDS.— 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:
- (i) The Secretary shall first be paid an amount
which bears the same ratio to such balance (as of the date of such distribution) as the total amount of Federal capital contributions to such fund by the Secretary under this part bears to the sum of such Federal capital contributions and the capital contributions to such fund made by the institution. "(ii) The remainder of such student loan fund shall be paid to the institution. "(D) USE OF RETURNED FUNDS.— Any funds returned to the Secretary under this paragraph shall be reallocated to institutions of higher education pursuant to subsection (i).
- (E) DEFINITION. —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. "(f) APPLICABLE MAXIMUM COHORT DEFAULT RATE. —
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