; and (B) the number of eligible students enrolled in the eligible institution for the preceding year. (2) Subsequent increases For each succeeding year after the first year of the grant program under this subpart, each participating eligible institution shall receive a grant in the amount determined under paragraph (1) for such year, except that in no case shall the amount of the per-student rebate for an eligible institution increase by more than 3 percent as compared to the amount of such rebate for the preceding year. (3) Limitations (A) Maximum per-student rebate No eligible institution participating in the grant program under this subpart shall receive a per-student rebate amount for any year that is greater than the national average of annual tuition and fees at public 4-year institutions of higher education for such year, as determined by the Secretary. (B) First-year tuition and fees During the first year of participation in the grant program under this subpart, no eligible institution may increase tuition and fees at a rate greater than any annual increase at the eligible institution in the previous 5 years. (4) Students enrolled less than full-time The Secretary shall develop and implement a formula for making adjustments to grant amounts under this subpart based on the number of eligible students at each eligible institution enrolled less than full-time and the associated tuition and fees charged to such students in proportion to the degree to which each such student is not attending on a full-time basis. (c) Application An eligible institution that desires a grant under this subpart shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require. (d) Use of funds Funds awarded under this subpart to a participating eligible institution shall be used to waive or significantly reduce tuition and fees for eligible students by an amount not to exceed the annual per-student rebate amount. Such funds under this subpart may only be used