§264.40. What happens if a State does not repay a Federal loan?
45 C.F.R. § 264.40
If a State fails to repay the amount of principal and interest due at any point under a loan agreement developed pursuant to section 406 of the Act:
The entire outstanding loan balance, plus all accumulated interest, becomes due and payable immediately; and
We will reduce the SFAG payable for the immediately succeeding fiscal year quarter by the outstanding loan amount plus interest.
Neither the reasonable cause provisions at § 262.5 of this chapter nor the corrective compliance plan provisions at § 262.6 of this chapter apply when a State fails to repay a Federal loan.
Notes, amendments, and revision history
Authority
Authority: 31 U.S.C. 7501 et seq.; 42 U.S.C. 608, 609, 654, 1302, 1308, and 1337.
Source
Source: 64 FR 17896, Apr. 12, 1999, unless otherwise noted.