(a) When a participant fails to maintain an acceptable level of academic standing, is dismissed from the school for disciplinary reasons, or voluntarily terminates the course of study or program for which the scholarship was awarded before completing the course of study or program, the participant must, instead of performing any service obligation, pay to the United States an amount equal to all scholarship funds awarded under §68b.6. Payment of this amount must be made within 3 years of the date the participant becomes liable to make payment under this paragraph (a).

(b) If, for any reason not specified in §68b.11(b), a participant fails to begin or complete the period of obligated service incurred under §68b.7, including failing to comply with the applicable terms and conditions of a deferment granted by the Director, the participant must pay to the United States an amount determined by the penalties set forth in section 487D(e) of the Act. Payment of this amount shall be made within one year of the date that the participant failed to begin or complete the period of obligated service, as determined by the Director.