§7699B Breach of Agreement: Liability

Summary

If a program participant refuses a scholarship payment or tells their school not to accept it, they must pay $1,500 to the United States. That $1,500 does not replace any required service time or other duties in the agreement. If a participant falls below the school’s required grades, is dismissed for discipline, or quits their program before finishing, they must repay the money paid for them. That repayment takes the place of any service obligation. If a participant does not finish the required service time, the United States can recover an amount using this formula: A = 3Φ (t−s/t). A is the amount to recover. Φ is the total paid for the participant plus interest calculated as if those payments were loans at the maximum legal prevailing rate set by the Treasurer. t is the total months of required service. s is the months actually served. No recovery under that formula if the participant lost the job because of a staffing adjustment. Any amount owed must be paid within one year after the breach.