CFR > Title 45 - Public Welfare > SUBTITLE B—Regulations Relating to Public Welfare > CHAPTER II—OFFICE OF FAMILY ASSISTANCE (ASSISTANCE PROGRAMS), ADMINISTRATION FOR CHILDREN AND FAMILIES, DEPARTMENT OF HEALTH AND HUMAN SERVICES (parts 200 to 288) > PART 264—OTHER ACCOUNTABILITY PROVISIONS > SUBPART A—What Specific Rules Apply for Other Program Penalties? (§264.1 to §264.50) > 264.40—What happens if a State does not repay a Federal loan?

264.40—What happens if a State does not repay a Federal loan?

(a) If a State fails to repay the amount of principal and interest due at any point under a loan agreement developed pursuant to section 406 of the Act:
(1) The entire outstanding loan balance, plus all accumulated interest, becomes due and payable immediately; and
(2) We will reduce the SFAG payable for the immediately succeeding fiscal year quarter by the outstanding loan amount plus interest.
(b) Neither the reasonable cause provisions at § 262.5 of this chapter nor the corrective compliance plan provisions at § 262.6 of this chapter apply when a State fails to repay a Federal loan.