Sec. 2206.3. Methods of payment

(a) Institutions of higher education, except during the initial year a school offers approved programs, shall select, from the payment methods described below, the method by which the institution chooses to receive award payments for the benefit of eligible students during each academic year. During the initial year a school offers approved programs, such school shall not be eligible for the prepayment method of payment.

(b) Prepayment method.

(1) Awards may be prepaid to institutions, for the benefit of eligible students who have submitted applications for awards, by means of a single check or electronic funds transfer in an amount representing a percentage of the total amount of awards which would be payable if the institution certified to the corporation the eligibility of every student appearing on the roster of applicants provided to the institution. Except as provided herein, prepayments shall be made no sooner than 30 days before the start of any term, and shall be made only for rosters or applicants for the summer term issued prior to September 30th, for the fall term issued prior to November 30th, for the winter term issued prior to February 28th and for the spring term issued prior to April 30th of the academic year. Payments relating to rosters issued after these dates shall be made by the lump sum payment method. The percentage to be utilized by the corporation for each institution for each term of the academic year shall be determined by the president and, except as provided in subdivision (d) of this section, shall be the percentage as determined by the following calculation:

(i) certified value of institution's rosters for the corresponding term of the prior academic year which have been submitted to the corporation by a date to be established by the president, divided by:

(ii) value of all rosters for the corresponding term of the prior academic year submitted to the institution for certification at least 60 days prior to the date to be established by the president in accordance with subparagraph (i) of this paragraph.

(2) The prepayment to be made based upon the resultant percentage shall be determined by reference to the table below:

When historical certification		TAP prepayment
rate is		percentage is
Greater than or equal to	but less than
93%	100%	90%
88%	93%	85%
83%	88%	80%
78%	83%	75%
73%	78%	70%
68%	73%	65%
63%	68%	60%
58%	63%	55%
53%	58%	50%
48%	53%	45%
43%	48%	40%
38%	43%	35%
33%	38%	30%
28%	33%	25%
23%	28%	20%
18%	23%	15%
13%	18%	10%
0%	13%	0%

(3) In the event that a new program is created in an existing institution and a separate payment plan is to be used for that new program, the prepayment percentage shall be the same percentage utilized for the existing institution or 75 percent whichever is lower. Should the existing institution include more than one program with different prepayment percentages, the prepayment for the new program shall be the percentage for that program within the institution most closely associated with the new program or 75 percent, whichever is lower.

(4) The term prepayment percentages for each institution shall be recalculated for each new academic year or when deemed necessary by the president pursuant to the provisions of this subdivision.

After the institution's certification of eligibility, additional payments, if any, shall be made to the institution, for the benefit of eligible students, or refunds of overpaid amounts shall be made by the institution to the corporation.

(c) Lump sum payment method.

Awards may be paid to institutions, for the benefit of eligible students, by means of a single check or electronic funds transfer in an amount representing the value of awards to students whose eligibility has been certified to the corporation by the institution. A single check will be issued, payable to the institution, after the corporation has received and reviewed the roster of applicants whose eligibility has been certified by the institution for a term.

(d) Disqualification from prepayment.

The president, for good cause, may disqualify an institution from participating in the prepayment method set forth in subdivision (b) of this section or where the institution has a history of delinquency in refunding excess prepayments, reduce an institution's prepayment percentage to a rate lower than that determined by the method set forth in that subdivision. Good cause shall include revision of the institution's academic calendar or revision of the institution's programs of study where such revision has an effect upon the calculation of the prepayment percentage, a finding of insufficient administrative practices at the institution, the assertion of a claim of refund from the institution pursuant to Part 2007 of this Subchapter, suspension of the license of any school pursuant to section 5001(5)(c) of the Education Law, the placement of any school on probation pursuant to section 5001(6) of the Education Law (for the duration of the probationary period), the providing of notice by any school of its intent to close or cease operation as required by section 5001(8), of the Education Law, the establishment of a trust fund by any school if required by the commissioner pursuant to section 5008 of the Education Law, or other good cause established to the satisfaction of the president. A disqualified institution shall be afforded an opportunity for a hearing within 30 days after such disqualification provided that a written request therefor is served on the corporation within 10 days of notice of such disqualification.