[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: 34CFR668.95]

[Page 501-502]
 
                           TITLE 34--EDUCATION
 
                         DEPARTMENT OF EDUCATION
 
PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS--Table of Contents
 
   Subpart G--Fine, Limitation, Suspension and Termination Proceedings
 
Sec. 668.95  Reimbursements, refunds, and offsets.

    (a) The designated department official, hearing official, or 
Secretary may require an institution or third-party servicer to take 
reasonable and appropriate corrective action to remedy the institution's 
or servicer's violation, as applicable, of any statutory provision of or 
applicable to Title IV of the HEA, any regulatory provision prescribed 
under that statutory authority, or any applicable special arrangement, 
agreement, or limitation entered into under

[[Page 502]]

the authority of statutes applicable to Title IV of the HEA.
    (b) The corrective action may include payment of any funds to the 
Secretary, or to designated recipients, that the institution or 
servicer, as applicable, improperly received, withheld, disbursed, or 
caused to be disbursed. Corrective action may, for example, relate to--
    (1) With respect to the Federal Stafford Loan, Federal PLUS, and 
Federal SLS programs--
    (i) Ineligible interest benefits, special allowances, or other 
claims paid by the Secretary; and
    (ii) Discounts, premiums, or excess interest paid in violation of 34 
CFR part 682; and
    (2) With respect to all Title IV, HEA programs--
    (i) Refunds or returns of title IV, HEA program funds required under 
program regulations when a student withdraws.
    (ii) Any grants, work-study assistance, or loans made in violation 
of program regulations.
    (c) If any final decision requires an institution or third-party 
servicer to reimburse or make any other payment to the Secretary, the 
Secretary may offset these claims against any benefits or claims due to 
the institution or servicer.
    (d) If an institution's violation in paragraph (a) of this section 
results from an administrative, accounting, or recordkeeping error, and 
that error was not part of a pattern of error, and there is no evidence 
of fraud or misconduct related to the error, the Secretary permits the 
institution to correct or cure the error. If the institution corrects or 
cures the error, the Secretary does not limit, suspend, terminate, or 
fine the institution for that error.

(Authority: 20 U.S.C. 1094 and 1099c-1)

[59 FR 22451, Apr. 29, 1994, as amended at 64 FR 58619, Oct. 29, 1999; 
64 FR 59042, Nov. 1, 1999]