; (2) develop an application process and eligibility criteria for the award of loans under the program; (3) approve applications for loans under the program based on the eligibility criteria and allocations made under paragraph (1); and (4) designate maritime training institutions at which loans made under the program may be used. (e) Designation of maritime training institutions (1) In general In designating maritime training institutions under subsection (d)(4), the Secretary— (A) may include Federal, State, and commercial training institutions and nonprofit training organizations, including centers of excellence designated under section 51706; (B) shall designate institutions based on geographic diversity and scope of classes offered; (C) shall ensure that designated institutions have the ability to administer the program; and (D) shall ensure that designated institutions meet requirements to provide training instruction for appropriate Coast Guard-approved training instruction. (2) Exclusions The Secretary— (A) may exclude from participation in the program a maritime training institution that has had severe performance deficiencies, including deficiencies demonstrated by audits or program reviews conducted during the 5 calendar years immediately preceding the present year; (B) shall exclude from participation in the program a maritime training institution that has delinquent or outstanding debts to the United States, unless such debts are being repaid under or in accordance with a repayment arrangement satisfactory to the United States, or the Secretary in the Secretary’s discretion determines that the existence or amount of any such debts has not been finally determined by the appropriate Federal agency; (C) may exclude from participation in the program a maritime training institution that has failed to comply with quality standards established by the Department of Labor, the Coast Guard, or a State