; and (II) if the borrower qualifies for the reduction requested under subclause (I), shall pay the sum calculated under such subclause at such time and in such manner as required by the Secretary; (ii) if the borrower does not qualify for a reduction under clause (i) or does not request such a reduction, shall pay to the Secretary an amount equal to the difference between such amounts within the 30-day period beginning on the date of receipt by the borrower of the borrower’s annual statement described in section 499E(a)(3) for such year; or (iii) if the borrower fails to pay the amount owed by the borrower as calculated under clause (ii) within the 30-day period, shall be charged a penalty equal to 2 percent of such amount for each month (prorated based on the percentage of a month such penalty is charged) that such amount is owed or until the borrower defaults on the loan for which such amount is owed, whichever occurs first. (B) Default A loan for which an amount is owed under subparagraph (A) and that is not paid within 270 days after the date of receipt by the borrower of the borrower’s annual statement described in section 499E(a)(3) shall be considered to be in default. (g) Overpayments If, as of the last day of a taxable year, the sum of the payments made on a borrower’s annual repayment amount for such year is greater than the total amount of the borrower’s annual repayment amount for such year, the Secretary shall— (1) refund the overpayment amount, if the borrower notifies the Secretary, within the 90-day period beginning on the date of receipt of the borrower’s annual statement described in section 499E(a)(3) for such year and in a manner prescribed by the Secretary, that the borrower desires to have the overpayment amount refunded