Section 80. Noncompliance with scholarship agreement

A. A scholar found to be in noncompliance with the scholarship agreement entered shall:

1. Repay the amount of scholarship funds received, prorated according to the fraction of the work obligation not completed, as determined by the council;

2. Pay a simple, per annum interest charge of 5.0% on the outstanding principal as determined by the council; and

3. Pay all reasonable collection costs as determined by the council.

B. A scholar required to repay his scholarship shall:

1. Enter repayment status on the first day of the first calendar month after:

a. The council has determined that the scholar is no longer enrolled in an eligible course of study, but not before six months has elapsed since the scholar was enrolled in such course of study;

b. The date the scholar informs the council that he does not plan to fulfill the work obligation; or

c. The latest date on which the scholar must have begun working in order to have completed the work obligation within 10 years after completing the postsecondary education for which the scholarship was awarded, as determined by the council.

2. Make monthly payments to the council that cover principal, interest, and any collection costs according to a schedule established by the council that calls for minimum payments of $100 per month and to complete repayment within 10 years after the scholar enters repayment status.

C. The interest charge specified in subdivision A 2 of this section accrues from:

1. The date of the initial scholarship payment if the council has determined that the scholar is no longer enrolled in an eligible course of study or completed an eligible course of study but never became employed as a shipyard worker; or

2. The day after the last day of the scholarship period for which the work obligation has been fulfilled.

D. The council shall capitalize any accrued interest at the time it establishes a scholar's repayment schedule.

E. The council may approve less than $100 minimum monthly payments or forgive partial interest charges due to extenuating circumstances.

F. The council may approve a reduction in interest charges for scholars making consistent on-time monthly payments that meet or exceed the minimum required amount.

G. A scholar is not considered in violation of the repayment schedule established by the council during the time he is:

1. Serving on active duty as a member of the armed services of the United States or serving as a member of VISTA or the Peace Corps for a period not in excess of three years;

2. Accompanying a spouse who is serving on active duty as a member of the armed services of the United States or serving as a member of VISTA or the Peace Corps for a period not in excess of three years;

3. Experiencing health conditions that impede his ability to perform requisite service in a shipyard setting for a period not to exceed three years;

4. Unable to secure employment by reason of the care required by a disabled child, spouse, or parent for a period not in excess of 12 months; or

5. Unable to satisfy the terms of the repayment schedule established by the council and is also seeking and unable to find full-time employment as a shipyard worker in Virginia for a single period not to exceed 27 months.

H. To qualify for any of the exceptions in subsection G of this section, a scholar must notify the council of his claim to the exception and provide supporting documentation as required by the council.

I. During the time a scholar qualifies for any of the exceptions specified in subsection G of this section, he need not make the scholarship repayments and interest does not accrue.

J. The council shall extend the 10-year scholarship repayment period by a period equal to the length of time a scholar meets any of the exceptions in subsection G of this section or if a scholar's inability to complete the scholarship repayments within this 10-year period because of his financial condition has been established to the council's satisfaction.

K. The council shall cancel a scholar's repayment obligation if it determines that:

1. On the basis of a sworn affidavit of a qualified physician, the scholar is unable to work on a full-time basis because of an impairment that is expected to continue indefinitely or result in death; or

2. On the basis of a death certificate or other evidence conclusive under state law, the scholar has died.

Historical Notes

Derived from Volume 23, Issue 22, eff. July 1, 2007; Errata, 23:23 VA.R. 3975 July 23, 2007.

Statutory Authority

§ 23-220.01 of the Code of Virginia.