[Code of Federal Regulations]
[Title 34, Volume 3]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 34CFR682.423]

[Page 782]
 
                           TITLE 34--EDUCATION
 
                         DEPARTMENT OF EDUCATION
 
PART 682--FEDERAL FAMILY EDUCATION LOAN (FFEL) PROGRAM--Table of Contents
 
Subpart D--Administration of the Federal Family Education Loan Programs 
                          by a Guaranty Agency
 
Sec. 682.423  Guaranty agency Operating Fund.

    (a) Establishment and control. A guaranty agency must establish and 
maintain an Operating Fund in an account separate from the Federal Fund. 
Except for funds that have been transferred from the Federal Fund, the 
Operating Fund is considered the property of the guaranty agency. During 
periods in which the Operating Fund contains funds transferred from the 
Federal Fund, the Operating Fund may be used only as permitted by 
Secs. 682.410(a)(2) and 682.418.
    (b) Deposits. The guaranty agency must deposit into the Operating 
Fund--
    (1) Amounts authorized by the Secretary to be transferred from the 
Federal Fund;
    (2) Account maintenance fees;
    (3) Loan processing and issuance fees;
    (4) Default aversion fees;
    (5) 30 percent of administrative cost allowances received on or 
after October 1, 1998 for loans upon which insurance was issued before 
October 1, 1998;
    (6) The portion of the amounts collected on defaulted loans that 
remains after the Secretary's share of collections has been paid and the 
complement of the reinsurance percentage has been deposited into the 
Federal Fund;
    (7) The agency's share of the payoff amounts received from the 
consolidation or rehabilitation of defaulted loans; and
    (8) Other receipts as authorized by the Secretary.
    (c) Uses. A guaranty agency may use the Operating Fund for--
    (1) Guaranty agency-related activities, including--
    (i) Application processing;
    (ii) Loan disbursement;
    (iii) Enrollment and repayment status management;
    (iv) Default aversion activities;
    (v) Default collection activities;
    (vi) School and lender training;
    (vii) Financial aid awareness and related outreach activities; and
    (viii) Compliance monitoring; and
    (2) Other student financial aid-related activities for the benefit 
of students, as selected by the guaranty agency.

(Authority: 20 U.S.C. 1072-2)

[64 FR 58635, Oct. 29, 1999]