Underwriting Manual: TX
18.04
Schools--Higher Education Facilities Act
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18.04.1
In General
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| The Higher Education Facilities Act provides generally for federal grants to public or nonprofit colleges, universities and technical schools to aid in the construction of academic facilities. The Act, however, reserves to the United States a right to recover a proportionate share of the grant at any time within twenty years of the completion of the facility if (1) the institution has ceased to be public or nonprofit, or (2) the facility has ceased to be used for academic purposes. |
| The right of recovery afforded to the Government thus operates much as a direct restraint on alienation or use of the facility, and it is important to note that the right may be asserted against a “successor in title” as well as the original institution. |
| Accordingly, where the examination of title disclosed that a college, university or other institution of higher education is now in title, or has been in title since the effective date of the Act, a special exception should be included in the title commitment or policy. |