(a) If an institution responsible for a Federal Perkins Loan fund closes or no longer wants to participate in the program, the Secretary directs the institution to take the following steps to protect the outstanding loans and the Federal interest in that Fund:
(1) A capital distribution of the liquid assets of the Fund according to section 466(c) of the Act.
(2) The assignment of the outstanding loans to the United States.
(b) An institution that assigns outstanding loans under this paragraph relinquishes its interest in those loans.
[52 FR 45747, Dec. 1, 1987, as amended at 59 FR 61415, Nov. 30, 1994; 60 FR 61814, Dec. 1, 1995; 67 FR 67076, Nov. 1, 2002]