§7675 Breach of Agreement: Liability

Summary

If a program participant refuses scholarship money or tells their school not to accept it, they must pay the United States $1,500 in damages. That $1,500 is extra and does not replace any service time or other duties the person still owes. If the United States paid money for a participant and the participant later stops meeting rules, the participant must repay the amounts paid. Repayment is required if the participant drops below the school’s required grades, is kicked out for discipline, quits the course early, does not get required professional licensing within the time set by the Secretary, or fails to keep Department employment while enrolled. If repayment is required under these rules, it replaces any service obligation the person would have owed. If the participant breaks their required service time, the government can recover an amount set by a formula that uses the total paid (plus interest at the maximum legal prevailing rate), the total months of required service, and the months actually served. No repayment is required for losing Department employment if the loss was due to a staffing adjustment. Any money the United States is owed must be paid within one year after the breach.