 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER IV--STUDENT ASSISTANCE
 
   Part A--Grants to Students in Attendance at Institutions of Higher 
                                Education
 
     subpart 3--federal supplemental educational opportunity grants
 
Sec. 1070b-2. Agreements with institutions; selection of 
        recipients
        

(a) Institutional eligibility

    Assistance may be made available under this subpart only to an 
institution which--
        (1) has, in accordance with section 1094 of this title, an 
    agreement with the Secretary applicable to this subpart;
        (2) agrees that the Federal share of awards under this subpart 
    will not exceed 75 percent of such awards, except that the Federal 
    share may be exceeded if the Secretary determines, pursuant to 
    regulations establishing objective criteria for such determinations, 
    that a larger Federal share is required to further the purpose of 
    this subpart; and
        (3) agrees that the non-Federal share of awards made under this 
    subpart shall be made from the institution's own resources, 
    including--
            (A) institutional grants and scholarships;
            (B) tuition or fee waivers;
            (C) State scholarships; and
            (D) foundation or other charitable organization funds.

(b) Eligibility for selection

    Awards may be made under this subpart only to a student who--
        (1) is an eligible student under section 1091 of this title; and
        (2) makes application at a time and in a manner consistent with 
    the requirements of the Secretary and that institution.

(c) Selection of individuals and determination of amount of awards

    (1) From among individuals who are eligible for supplemental grants 
for each fiscal year, the institution shall, in accordance with the 
agreement under section 1094 of this title, and within the amount 
allocated to the institution for that purpose for that year under 
section 1070b-3 of this title, select individuals who are to be awarded 
such grants and determine, in accordance with section 1070b-1 of this 
title, the amounts to be paid to them.
    (2)(A) In carrying out paragraph (1) of this subsection, each 
institution of higher education shall, in the agreement made under 
section 1094 of this title, assure that the selection procedures--
        (i) will be designed to award supplemental grants under this 
    subpart, first, to students with exceptional need, and
        (ii) will give a priority for supplemental grants under this 
    subpart to students who receive Pell Grants and meet the 
    requirements of section 1091 of this title.

    (B) For the purpose of subparagraph (A), the term ``students with 
exceptional need'' means students with the lowest expected family 
contributions at the institution.

(d) Use of funds for less-than-full-time students

    If the institution's allocation under this subpart is directly or 
indirectly based in part on the financial need demonstrated by students 
who are independent students or attending the institution on less than a 
full-time basis, then a reasonable proportion of the allocation shall be 
made available to such students.

(e) Use and transfer of funds for administrative expenses

    An agreement entered into pursuant to this section shall provide 
that funds granted to an institution of higher education may be used 
only to make payments to students participating in a grant program 
authorized under this subpart, except that an institution may use a 
portion of the sums allocated to it under this subpart to meet 
administrative expenses in accordance with section 1096 of this title.

(Pub. L. 89-329, title IV, Sec. 413C, as added Pub. L. 99-498, title IV, 
Sec. 401(a), Oct. 17, 1986, 100 Stat. 1329; amended Pub. L. 102-325, 
title IV, Sec. 403(d)-(f), July 23, 1992, 106 Stat. 506; Pub. L. 103-
208, Sec. 2(b)(25), Dec. 20, 1993, 107 Stat. 2459; Pub. L. 105-244, 
title IV, Sec. 406(b), Oct. 7, 1998, 112 Stat. 1665.)


                            Prior Provisions

    A prior section 1070b-2, Pub. L. 89-329, title IV, Sec. 413C, as 
added Pub. L. 92-318, title I, Sec. 131(b)(1), June 23, 1972, 86 Stat. 
253; amended Pub. L. 94-482, title I, Sec. 122(b), Oct. 12, 1976, 90 
Stat. 2094; Pub. L. 96-374, title IV, Sec. 403(d), Oct. 3, 1980, 94 
Stat. 1405, related to selection of recipients of supplemental 
educational opportunity grants and agreements with institutions, prior 
to the general revision of this part by Pub. L. 99-498.


                               Amendments

    1998--Subsec. (d). Pub. L. 105-244 amended heading and text of 
subsec. (d) generally. Prior to amendment, text read as follows: ``If 
the institution's allocation under this subpart is directly or 
indirectly based in part on the financial need demonstrated by students 
who are independent students or attending the institution less than full 
time and if the total financial need of all such students attending the 
institution exceeds 5 percent of the total financial need of all 
students attending such institution, then at least 5 percent of such 
allotment shall be made available to such students.''
    1993--Subsec. (d). Pub. L. 103-208 substituted ``and'' for ``, a 
reasonable proportion of the institution's allocation shall be made 
available to such students, except that'' and ``5 percent of the total 
financial need'' for ``5 percent of the need''.
    1992--Subsec. (a)(2). Pub. L. 102-325, Sec. 403(d), amended par. (2) 
generally. Prior to amendment, par. (2) read as follows: ``agrees that 
the Federal share of awards under this subpart will not exceed--
        ``(A) 95 percent of such awards in fiscal year 1989,
        ``(B) 90 percent of such awards in fiscal year 1990, and
        ``(C) 85 percent of such awards in fiscal year 1991,
except that the Federal share may be exceeded if the Secretary 
determines, pursuant to regulations establishing objective criteria for 
such determinations, that a larger Federal share is required to further 
the purpose of this subpart; and''.
    Subsec. (d). Pub. L. 102-325, Sec. 403(e), inserted ``who are 
independent students or'' after ``demonstrated by students'' and 
inserted before period at end ``, except that if the total financial 
need of all such students attending the institution exceeds 5 percent of 
the need of all students attending such institution, then at least 5 
percent of such allotment shall be made available to such students''.
    Subsec. (e). Pub. L. 102-325, Sec. 403(f), struck out before period 
at end ``, and may transfer such funds in accordance with the provisions 
of section 1095 of this title''.


                    Effective Date of 1998 Amendment

    Amendment by Pub. L. 105-244 effective Oct. 1, 1998, except as 
otherwise provided in Pub. L. 105-244, see section 3 of Pub. L. 105-244, 
set out as a note under section 1001 of this title.


                    Effective Date of 1993 Amendment

    Amendment by Pub. L. 103-208 effective on and after July 1, 1994, 
see section 5(b)(6) of Pub. L. 103-208, set out as a note under section 
1051 of this title.


                    Effective Date of 1992 Amendment

    Amendment by Pub. L. 102-325 effective July 23, 1992, except that 
changes in subsec. (a)(2) of this section, relating to Federal share for 
supplemental educational opportunity grant program, applicable to funds 
provided for such program for award years beginning on or after July 1, 
1993, see section 410 of Pub. L. 102-325, set out as a note under 
section 1070a of this title.


                             Effective Date

    Section effective Oct. 17, 1986, except as otherwise provided, see 
section 2 of Pub. L. 99-498, set out as a note under section 1001 of 
this title.
    Section 401(b)(5) of Pub. L. 99-498 provided that: ``Section 
413C(c)(2) of the Act [20 U.S.C. 1070b-2(c)(2)] as amended by this 
section shall apply to the awarding of grants under subpart 2 of part A 
of title IV of the Act [this subpart] for periods of enrollment 
beginning on or after July 1, 1987.''

                  Section Referred to in Other Sections

    This section is referred to in sections 1070b, 1070b-1 of this 
title.
