Appropriations for any fiscal year for grants, loans, contracts, or other payments under any applicable program may, in accordance with regulations of the Secretary, be made available for obligation by the recipient on the basis of an academic or school year differing from such fiscal year.

Any funds under any applicable program which, pursuant to paragraph (1), are available for obligation and expenditure in the year succeeding the fiscal year for which they were appropriated shall be obligated and expended in accordance with—

(1) Notwithstanding any other provision of law, unless enacted in specific limitation of the provisions of this subsection, any funds from appropriations to carry out any programs to which this chapter is applicable during any fiscal year, which are not obligated and expended by educational agencies or institutions prior to the beginning of the fiscal year succeeding the fiscal year for which such funds were appropriated shall remain available for obligation and expenditure by such agencies and institutions during such succeeding fiscal year.

Any funds under any applicable program which, pursuant to paragraph (1), are available for obligation and expenditure in the year succeeding the fiscal year for which they were appropriated shall be obligated and expended in accordance with—

(A) the Federal statutory and regulatory provisions relating to such program which are in effect for such succeeding fiscal year, and

(B) any program plan or application submitted by such educational agencies or institutions for such program for such succeeding fiscal year.

If any funds appropriated to carry out any applicable program are not obligated pursuant to a spending plan submitted in accordance with section 1341(a) of title 31 and become available for obligation after the institution of a judicial proceeding seeking the release of such funds, then such funds shall be available for obligation and expenditure until the end of the fiscal year which begins after the termination of such judicial proceeding.

(Pub. L. 90–247, title IV, § 421, formerly § 405, Jan. 2, 1968, 81 Stat. 815; Pub. L. 91–230, title IV, § 401(a)(5), (7), (8), Apr. 13, 1970, 84 Stat. 165; renumbered § 414, Pub. L. 92–318, title III, § 301(a)(1), June 23, 1972, 86 Stat. 326; renumbered § 412, and amended Pub. L. 93–380, title V, § 506(a)(1)(D), (E), Aug. 21, 1974, 88 Stat. 562; Pub. L. 94–273, § 3(12), Apr. 21, 1976, 90 Stat. 376; Pub. L. 95–112, § 5, Sept. 24, 1977, 91 Stat. 912; Pub. L. 95–561, title XII, § 1245, Nov. 1, 1978, 92 Stat. 2354; renumbered § 421 and amended Pub. L. 103–382, title II, §§ 212(b)(1), 232, Oct. 20, 1994, 108 Stat. 3913, 3914.)