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FSA Information for Financial Aid Professionals
U.S. Department of Education

Citations: (R)652.52
AsOfDate: 12/31/95

Sec. 652.52 How are scholarship awards to be made and

scholarship proceeds returned and transferred?

(a) An institution shall provide scholarship proceeds to

a Scholar in at least two payments per academic year.

(b) In the event that a Scholar refuses a scholarship,

does not attend courses, transfers to another institution, or
becomes ineligible for a scholarship and cannot be reinstated in
the same award year, the institution shall return the scholarship
proceeds to the Secretary.

(c) A Scholar who ceases to be eligible for NSSP

scholarship proceeds at an institution before completion of an
academic period for which payment of a scholarship award has
been received is only eligible for a prorated portion of the
scholarship award and is liable to the Secretary for any
overpayment. The prorated portion of the scholarship to be
returned to the Secretary must be in proportion to the portion of
the academic period during which the Scholar was ineligible for a
scholarship. The institution shall return the overpayment to the
Secretary in accordance with the provisions governing the
recovery of overpayments in 34 CFR 690.79 of the Pell Grant
Program regulations.

(d) The institution shall pay a pro rata share of the

scholarship for which the Scholar is eligible if he or she enrolls for
less than a full academic year to complete his or her
baccalaureate degree. The institution shall return the remaining
share of the scholarship to the Secretary.

(e) If a Scholar transfers to another institution of higher

education during an award year, the institution in which the
Scholar was originally enrolled shall calculate, and immediately
inform the Secretary of, the amount of the scholarship disbursed
to the Scholar at that institution and the amount of the award that
remains to be disbursed for the award year. The Secretary will
then reallocate the undisbursed funds from the original institution
to the institution to which the Scholar has transferred. As long as
the new institution to which the Scholar transfers determines that
the Scholar meets the provisions of Secs. 652.40 and 652.42, it
may continue to provide scholarship funds to the Scholar.

(Authority: 20 U.S.C. 5383 and 5384)