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Citations: (R)674.18 AsOfDate: 12/31/95

Use of funds. (a) General. An institution shall deposit the funds it receives under the Federal Perkins Loan program into its Fund. It may use these funds only for making loans and the other activities specified in Sec. 674.8(b). (b) Administrative cost allowance. (1) An institution participating in the Federal Perkins Loan program for an award year is entitled to an administrative cost allowance if it advances funds to students in that year under the Federal Perkins Loan program. (2) For any award year, the amount of the allowance equals-(i) Five (5) percent of the first $2,750,000 of the institution's expenditures in that award year under the FWS, FSEOG and Federal Perkins Loan programs; plus (ii) Four (4) percent of its expenditures which are greater than $2,750,000 but less than $5,500,000; plus (iii) Three (3) percent of its expenditures which are in excess of $5,500,000. (3) However, the institution shall not include, when calculating the allowance in paragraph (b)(2) of this section, the institution's FWS expenditures under the community service learning program (34 CFR 675.28), and the amount of NDSLs and Federal Perkins loans that it assigns to the Secretary under section 463(a)(6) of the HEA. (4) An institution shall use its administrative cost allowance to offset its cost of administering the Pell Grant, FWS, FSEOG and Federal Perkins Loan programs. Administrative costs also include the expenses incurred for carrying out the student consumer information services requirements of Subpart D of the Student Assistant General Provisions regulations, 34 CFR Part 668. (5) An institution shall charge any administrative costs against its Fund during the same award year in which the expenditures for these costs were made. (c) Transfer of funds. (1) An institution may transfer up to 25 percent of the sum of its initial and supplemental Federal Perkins Loan allocations for an award year to the Federal Work-Study program or Federal Supplemental Educational Opportunity Grant program, or to both. (2) An institution may transfer up to the total of the sum of its initial and supplemental Federal Perkins Loan allocations for an award year to the Work-Colleges program. (3) An institution shall use transferred funds according to the requirements of the program to which they are transferred. (4) An institution shall report any transferred funds on

the Fiscal Operations Report required under 674.19(d). (5) An institution shall transfer back to the Federal Perkins Loan program any funds unexpended at the end of the award year that it transferred to the FWS program, the FSEOG program, or the Work-Colleges program from the Federal Perkins Loan program. (Authority: 20 U.S.C. 1087cc, 1087dd, and 1096) Note: (b)(4) amended July 21, 1992, effective September 18, 1992. (c) added November 30, 1994, effective July 1, 1995.