EXCESS CAPITAL RULE.

SEC. 467. EXCESS CAPITAL RULE. (a) Recapture of Certain Loan funds.— Section 467 of the Act is amended by adding at the end thereof the following new subsection: “(c) Perkins Loan Revolving Fund.— (1) There is established a Perkins Loan Revolving Fund which shall be available without fiscal year limitation to the Secretary to make payments under this part, in accordance with paragraph (2) of this subsection. There shall be deposited in the Perkins Revolving Loan Fund— “(A) all funds collected by the Secretary on any loan referred, transferred, or assigned under paragraph (5)(A), (5)(B)(i), or (6) of section 463(a); “(B) all funds collected by the Secretary on any loan referred under paragraph (5)(B)(ii) of section 463(a); “(C) all funds paid to the Secretary under section 466(c)(1)(A); “(D) all funds from a student loan fund under this part received by the Secretary as the result of the closure of an institution of higher education; “(E) all funds received by the Secretary as a result of an audit of a student loan fund established under this part; and “(F) all funds which have been appropriated and which the Secretary determines are not necessary for carrying out section 465, relating to the cancellation of certain loans under this part for qualifying service. “(2) Notwithstanding any other provision of law, the Secretary shall, from the Perkins Loan Revolving Fund established under paragraph (1), pay allocations of additional capital contributions to eligible institutions of higher education in accordance with section 462, except that funds described in subparagraph (B) of paragraph (1) shall be repaid to the institution of higher education which referred the loan, as specified in section 463(a)(5)(B)(ii). The Secretary shall make the payments required by this paragraph in a manner designed to maximize the availability of capital loan funds under this part”. (b) Conforming Amendment.— The heading of section 467 of the Act is amended to read as follows: 106 STAT. 585 “collection of defaulted loans: perkins loans revolving fund”.