; and (iii) books and supplies, in an amount not exceeding $1,000. (C) Graduate student need The term graduate student need means, with respect to a graduate student for a fiscal year, the lesser of the following: (i) The amount equal to (except the amount computed by this clause shall not be less than zero)— (I) the average cost of attendance for the preceding fiscal year, minus (II) each such graduate student’s expected family contribution (computed in accordance with part F of this title) for the preceding fiscal year. (ii) The total loan limit for a Federal Direct Unsubsidized Stafford Loan. (D) Undergraduate student need The term undergraduate student need means, with respect to an undergraduate student for a fiscal year, the lesser of the following: (i) The total of the amount equal to (except the amount computed by this clause shall not be less than zero)— (I) the average cost of attendance for the fiscal year, minus (II) each such undergraduate student’s expected family contribution (computed in accordance with part F of this title) for the preceding fiscal year. (ii) The total loan limit for a Federal Direct Unsubsidized Stafford Loan and a Federal Direct Loan. (e) Return of surplus allocated funds (1) In general Except with respect to funds returned under subsection (a)(3), if an institution returns to the Secretary any portion of the sums allocated to such institution under this section for any fiscal year, the Secretary shall reallot such excess to institutions that used at least 10 percent of the total amount of funds granted to such institution under this section to compensate students employed during a qualified period of nonenrollment (as such term is defined in section 443(f)) on the same basis as excess eligible amounts are allocated under subsection (d). (2) Use of funds Funds received by institutions pursuant to this subsection shall be used to compensate students employed in work-based learning positions. (3) Retained funds (A) Amount returned If an institution returns more than 10 percent of