(2) ONE OR MORE YEARS OF SERVICE.—If a 
circumstance described in subparagraph (D) or (E) 
of subsection (g)(2) occurs after the completion of 
one or more years of a post-award employment obli-
gation under this section, the total amount of schol-
arship awards received by the individual under this 
section, reduced by the ratio of the number of years 
of service completed divided by the number of years 
of service required, shall— 
(A) be repaid; or 
(B) be treated as a loan to be repaid in ac-
cordance with subsection (j). 
(j) REPAYMENTS.—A loan described in subsection (i) 
shall— 
(1) be treated as a Federal Direct Unsubsidized 
Stafford Loan under part D of title IV of the High-
er Education Act of 1965 (20 U.S.C. 1087a et seq.); 
and 
(2) be subject to repayment, together with in-
terest thereon accruing from the date of the scholar-
ship award, in accordance with terms and conditions 
specified by the Secretary of Defense (in consulta-
tion with the Secretary of Education, Secretary of 
State, and Secretary of Homeland Security) in regu-
lations promulgated to carry out this subsection. 
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(k) COLLECTION OF REPAYMENT.— 
(1) IN GENERAL.—In the event that a scholar-
ship recipient is required to repay the scholarship 
award under this section, the covered institution pro-
viding the scholarship shall— 
(A) determine the repayment amounts and 
notify the recipient and the Secretary of De-
fense of the amounts owed; and 
(B) collect the repayment amounts within 
a period of time as determined by the Secretary 
of Defense, or the repayment amounts shall be 
treated as a loan in accordance with subsection 
(j). 
(2) RETURNED TO TREASURY.—Except as pro-
vided in paragraph (3), any repayment under this 
subsection shall be returned to the Treasury of the 
United States. 
(3) RETAIN PERCENTAGE.—A covered institu-
tion may retain a percentage of any repayment the 
institution collects under this subsection to defray 
administrative costs associated with the collection. 
The Secretary of Defense shall establish a single, 
fixed percentage that will apply to all eligible enti-
ties. 
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(l) EXCEPTIONS.—The Secretary of Defense may 
provide for the partial or total waiver or suspension of any 
service or payment obligation by an individual under this 
section whenever compliance by the individual with the ob-
ligation is impossible or would involve extreme hardship 
to the individual, or if enforcement of such obligation with 
respect to the individual would be unconscionable. 
(m) EVALUATION AND REPORT.—The Secretary of 
Defense shall evaluate and report periodically to Congress 
on the success of recruiting individuals for scholarships 
under this section and on hiring and retaining those indi-
viduals in the public sector workforce. 
(n) COVERED INSTITUTION DEFINED.—In this sec-
tion, the term ‘‘covered institution’’ has the meaning given 
that term in section 262(g)(2) of the National Defense 
Authorization Act for Fiscal Year 2020 (Public Law 116– 
92). 
Æ 
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