REFUND POLICY.

SEC. 485. REFUND POLICY. (a) Refund Policies and Requirements.— Part G of title IV of the Act is further amended by inserting after section 484A the following new section: “SEC. 484B. INSTITUTIONAL REFUNDS. “(a) Refund Policy Required.— Each institution of higher education participating in a program under this title shall have in effect a fair and equitable refund policy under which the institution refunds unearned tuition, fees, room and board, and other charges to a student who received grant, loan, or work assistance under this title, or whose parent received a loan made under section 428B on behalf of the student, if the student— “(1) does not register for the period of attendance for which the assistance was intended; or “(2) withdraws or otherwise fails to complete the period of enrollment for which the assistance was provided. “(b) Determinations.— The institution’s refund policy shall be considered to be fair and equitable for purposes of this section if that policy provides for a refund in an amount of at least the largest of the amounts provided under— “(1) the requirements of applicable State law; “(2) the specific refund requirements established by the institution’s nationally recognized accrediting agency and approved by the Secretary; or “(3) the pro rata refund calculation described in subsection (d), except that this paragraph will not apply to the institution’s refund policy for any student whose date of withdrawal from the institution is after the 60 percent point (in time) in the period of enrollment for which the student has been charged. “(c) Definitions.— (1) As used in this section, the term ‘pro rata refund’ means a refund by the institution to a student attending such institution for the first time of not less than that portion of the tuition, fees, room and board, and other charges assessed the student by the institution equal to the portion of the period of enrollment for which the student has been charged that remains on the last day of attendance by the student, rounded downward to the nearest 10 percent of that period, less any unpaid charges owed by the student for the period of enrollment for which the student has been charged, and less a reasonable administrative fee not to exceed the lesser of 5 percent of the tuition, fees, room and board, and other charges assessed the student, or $100. 106 STAT. 620 “(2) For purposes of paragraph (1), “the portion of the period of enrollment for which the student has been charged that remains’, shall be determined— “(A) in the case of a program that is measured in credit hours, by dividing the total number of weeks comprising the period of enrollment for which the student has been charged into the number of weeks remaining in that period as of the last recorded day of attendance by the student; “(B) in the case of a program that is measured in clock hours, by dividing the total number of clock hours comprising the period of enrollment for which the student has been charged into the number of clock hours remaining to be completed by the student in that period as of the last recorded day of attendance by the student; and “(C) in the case of a correspondence program, by dividing the total number of lessons comprising the period of enrollment for which the student has been charged into the total number of such lessons not submitted by the student”.