If a recipient fails to carry out their service obligation, the recipient shall be in default and shall repay the State the portion of the scholarship not forgiven. Repayment may be prorated if the recipient partially fulfills the obligation, as determined by the Office of Student Financial Assistance. Interest on the funds advanced shall accrue at an interest rate equal to the interest rate established by the United States Department of Education for the Federal Stafford Loan on the first day of July of each year. Interest shall begin accruing as of the date of a recipient’s graduation or termination from an institution of higher education.