38 U.S.C. § 7617 — Breach of agreement: liability

submitted 38 years ago by Pub. L. 100-322 to r/title-38-VETERANS-BENEFITS · 578 words · no verdicts yet

in plain englishAI-generated · not legal advice

If a Scholarship Program participant refuses scholarship payments, drops out, gets dismissed, or fails required licensing, they owe the government money instead of service. This law also gives the formula for calculating damages when someone breaks their service agreement partway through.

(a) Refusing payment. A participant (other than one covered by subsection (b)) who refuses to accept a scholarship payment, or tells their school not to accept one, owes the United States $1,500 in liquidated damages. This is on top of, not instead of, any service or other duty under their agreement. (b) Owing back the scholarship. A participant owes the United States everything paid to them or on their behalf if any of these happen: they fail to keep acceptable grades, as their school decides under the Secretary's rules; their school dismisses them for discipline reasons; they voluntarily quit their training before finishing it; if training to be a physician, they fail to finish the post-graduate training needed for board-certification eligibility; they fail to get licensed to practice medicine, osteopathy, dentistry, podiatry, or optometry, fail to become a licensed registered nurse, or fail to meet a license requirement for any other patient-care role, within a time set by the Secretary's rules; or, for a part-time student, they fail to keep working at a VA health-care facility while enrolled. Owing this money replaces any service obligation from the agreement — it's one or the other, not both. (c) The damages formula for breaking the service obligation. If a participant fails, for any reason, to finish the required period of obligated service, the United States can recover an amount "A" using this formula, applied step by step: First find "Φ" — add up all the money paid to or for the participant under this subchapter, plus the interest that money would have earned if it had been a loan at the maximum legal rate (as the U.S. Treasurer determines). Next find "t" — the total number of months of obligated service required, including any extra months added under section 7616(b)(4). Then find "s" — the number of months of that service the participant actually completed, counted under section 7613. Now compute A using: A equals 3 times Φ, times the fraction (t minus s) over t. In other words: subtract the months served from the total months owed, divide that by the total months owed, and multiply the result by three times Φ. Whatever amount is owed must be paid to the United States within one year of the date the agreement was broken.

the actual law source: uscode.house.gov ↗public domain

(a)

A participant in the Scholarship Program (other than a participant described in subsection (b) of this section) who fails to accept payment, or instructs the educational institution in which the participant is enrolled not to accept payment, in whole or in part, of a scholarship under the agreement entered into under section 7603 of this title shall be liable to the United States for liquidated damages in the amount of $1,500. Such liability is in addition to any period of obligated service or other obligation or liability under the agreement.

(b)

A participant in the Scholarship Program shall be liable to the United States for the amount which has been paid to or on behalf of the participant under the agreement if any of the following occurs:

(1)

The participant fails to maintain an acceptable level of academic standing in the educational institution in which the participant is enrolled (as determined by the educational institution under regulations prescribed by the Secretary).

(2)

The participant is dismissed from such educational institution for disciplinary reasons.

(3)

The participant voluntarily terminates the course of training in such educational institution before the completion of such course of training.

(4)

In the case of a participant who is enrolled in a program or education or training leading to employment as a physician, the participant fails to successfully complete post-graduate training leading to eligibility for board certification in a specialty.

(5)

The participant fails to become licensed to practice medicine, osteopathy, dentistry, podiatry, or optometry in a State, fails to become licensed as a registered nurse in a State, or fails to meet any applicable licensure requirement in the case of any other health-care personnel who provide either direct patient-care services or services incident to direct patient-care services, during a period of time determined under regulations prescribed by the Secretary.

(6)

In the case of a participant who is a part-time student, the participant fails to maintain employment, while enrolled in the course of training being pursued by such participant, as a Department employee permanently assigned to a Department health-care facility.

Liability under this subsection is in lieu of any service obligation arising under the participant’s agreement.

(c)

(1)

If a participant in the Scholarship Program breaches the agreement by failing (for any reason) to complete such participant’s period of obligated service, the United States shall be entitled to recover from the participant an amount determined in accordance with the following formula:

 t−s

A=3Φ A——B

In such formula:

(A)

“A” is the amount the United States is entitled to recover.

(B)

“Φ” is the sum of (i) the amounts paid under this subchapter to or on behalf of the participant, and (ii) the interest on such amounts which would be payable if at the time the amounts were paid they were loans bearing interest at the maximum legal prevailing rate, as determined by the Treasurer of the United States.

(C)

“t” is the total number of months in the participant’s period of obligated service, including any additional period of obligated service in accordance with section 7616(b)(4) of this title.

(D)

“s” is the number of months of such period served by the participant in accordance with section 7613 of this title.

(2)

Any amount of damages which the United States is entitled to recover under this section shall be paid to the United States within the one-year period beginning on the date of the breach of the agreement.

Source credit: (Added Pub. L. 100–322, title II, § 216(b), May 20, 1988, 102 Stat. 524, § 4317; renumbered § 7617 and amended Pub. L. 102–40, title IV, § 402(b)(1), (d)(1), May 7, 1991, 105 Stat. 238, 239; Pub. L. 102–83, § 4(a)(3), (4), (b)(1), (2)(E), Aug. 6, 1991, 105 Stat. 404, 405; Pub. L. 115–182, title III, § 301(b), June 6, 2018, 132 Stat. 1463.)

history & why it existsrecord from the source credit

1988Enacted · Pub. L. 100-322 · 102 Stat. 524
1991Amended · Pub. L. 102-40 · 105 Stat. 238, 239
1991Amended · Pub. L. 102-83 · 105 Stat. 404, 405
2018Amended · Pub. L. 115-182 · 132 Stat. 1463

A history note hasn’t been published yet. The record shows enactment by Pub. L. 100-322 on 1988-05-20.

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