§7699B Breach of Agreement: Liability

Summary

If a participant who is not covered by the student rule refuses a scholarship payment or tells their school not to accept it, they must pay $1,500 to the United States. That $1,500 is in addition to any other service duty or obligation they still owe. If a participant, while still in school, falls below the school's required grades (as the school decides), is expelled for discipline, or quits before finishing the program, they must repay the total amount that was paid for them. That payment replaces any required service. If a participant fails to finish their required service, the amount the United States can recover is A = 3Φ × (t − s) / t, where A is the amount to recover; Φ is the total paid for the participant plus interest calculated as if those amounts were loans at the maximum legal prevailing rate set by the Treasurer; t is the total months of required service; and s is the months actually served. A participant does not owe this repayment if they lose their Department job because of a staffing reduction. Any money owed must be paid within one year after the breach.