[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: 34CFR682.609]

[Page 801]
 
                           TITLE 34--EDUCATION
 
                         DEPARTMENT OF EDUCATION
 
PART 682--FEDERAL FAMILY EDUCATION LOAN (FFEL) PROGRAM--Table of Contents
 
   Subpart F--Requirements, Standards, and Payments for Participating 
                                 Schools
 
Sec. 682.609  Remedial actions.

    (a) The Secretary may require a school to repay funds paid to other 
program participants by the Secretary. The Secretary also may require a 
school to purchase from the holder of a FFEL loan that portion of the 
loan that is unenforceable, that the borrower was ineligible to receive, 
or for which the borrower was ineligible to receive interest benefits 
contrary to the school's certification, and to make arrangements 
acceptable to the Secretary for reimbursement of the amounts the 
Secretary will be obligated to pay to program participants respecting 
that loan in the future. The repayment of funds and purchase of loans 
may be required if the Secretary determines that the payment to program 
participants, the unenforceability of the loan, or the disbursement of 
loan amounts for which the borrower was ineligible or for which the 
borrower was ineligible for interest benefits, resulted in whole or in 
part from--
    (1) The school's violation of a Federal statute or regulation; or
    (2) The school's negligent or willful false certification.
    (b) In requiring a school to repay funds to the Secretary or to 
another party or to purchase loans from a holder in connection with an 
audit or program review, the Secretary follows the procedures described 
in 34 CFR part 668, subpart H.
    (c) Notwithstanding paragraph (a) of this section, the Secretary may 
waive the right to require repayment of funds or repurchase of loans by 
a school if, in the Secretary's judgment, the best interest of the 
United States so requires.
    (d) The Secretary may impose a fine or take an emergency action 
against a school or limit, suspend, or terminate a school's 
participation in the FFEL programs, in accordance with 34 CFR part 668, 
subpart G.
    (e) A school shall comply with any emergency action, limitation, 
suspension, or termination imposed by a guaranty agency in accordance 
with the agency's standards and procedures. A school shall repay funds 
to the Secretary or other party or purchase loans from a holder if a 
guaranty agency determines that the school improperly received or 
retained the funds in violation of a Federal law or regulation or a 
guaranty agency rule or regulation.

(Authority: 20 U.S.C. 1077, 1078 , 1078-1, 1078-2, 1082, 1094)