§7699B Breach of agreement: liability

Summary

If a person in the Program refuses scholarship payments or tells their school not to accept them, they must pay $1,500 to the United States. That $1,500 is in addition to any service or other duties the person still owes. If the person falls below the school’s academic standard, is dismissed for discipline, or quits their program before finishing, they must pay back the money the United States paid for them. That payment replaces any required service. If the person does not finish the required service time, the United States can recover an amount A calculated by the formula A = 3Φ (t−s/t). In that formula, A is the amount to recover; Φ is the total paid for the person plus the interest that would have been charged if those payments were loans at the maximum legal prevailing rate at the time (as set by the U.S. Treasurer); t is the total months of required service; and s is the months actually served. The recovery under that formula does not apply if the person lost their Department job because of a staffing adjustment. Any money the United States can recover must be paid within one year starting on the date the agreement was breached.