[Code of Federal Regulations]
[Title 42, Volume 1]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR57.215]

[Page 268-269]
 
                         TITLE 42--PUBLIC HEALTH
 
    CHAPTER I--PUBLIC HEALTH SERVICE, DEPARTMENT OF HEALTH AND HUMAN 
                                SERVICES
 
PART 57--GRANTS FOR CONSTRUCTION OF TEACHING FACILITIES, EDUCATIONAL IMPROVEMENTS, SCHOLARSHIPS AND STUDENT LOANS--Table of Contents
 
               Subpart C--Health Professions Student Loans
 
Sec. 57.215  Records, reports, inspection, and audit.

    (a) Each Federal capital contribution and Federal capital loan is 
subject to the condition that the school must maintain those records and 
file with the Secretary those reports relating to the operation of its 
health professions student loan funds as the Secretary may find 
necessary to carry out the purposes of the Act and these regualtions. A 
school must submit required reports to the Secretary within 45 days of 
the close of the reporting period.
    (1) A school which fails to submit a required report for its Federal 
capital

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contribution fund within 45 days of the close of the reporting period:
    (i) Shall be prohibited from receiving new Federal capital 
contributions;
    (ii) Must place the revolving fund and all subsequent collections in 
an insured interest-bearing account; and
    (iii) May make no loan disbursements.

The above restrictions apply until the Secretary determines that the 
school is in compliance with the reporting requirement.
    (2) A school that fails to submit a complete report within 6 months 
of the close of the reporting period will be subject to termination. The 
Secretary will provide the school with a written notice specifying his 
or her intention to terminate the school's participation in the program 
and stating that the school may request, within 30 days of the receipt 
of this notice, a formal hearing. If the school requests a hearing, it 
must within 90 days of the receipt of the notice, submit material, 
factual issues in dispute to demonstrate that there is cause for a 
hearing. These issues must be both substantive and relevant. The hearing 
will be held in the Washington, DC metropolitan area. The Secretary will 
deny a hearing if:
    (i) The request for a hearing is untimely (i.e., fails to meet the 
30-day requirement);
    (ii) The school does not provide a statement of material, factual 
issues in dispute within the 90-day required period; or
    (iii) The statement of factual issues in dispute is frivolous or 
inconsequential.

In the event that the Secretary denies a hearing, the Secretary will 
send a written denial to the school setting forth the reasons for 
denial. If a hearing is denied, or if as a result of the hearing, 
termination is still determined to be necessary, the school will be 
terminated from participation in the program and will be required to 
return the Federal share of the revolving fund to the Department. A 
school terminated for failure to submit a complete report within 6 
months of the close of the reporting period must continue to pursue 
collections and may reapply for participation in the program once it has 
submitted the overdue report.
    (3) The school must also comply with the requirements of 45 CFR part 
74 and section 798(e) of the Act concerning recordkeeping, audit, and 
inspection.
    (b) The following student records must be retained by the school for 
5 years after an individual student ceases to be a full-time student:
    (1) Approved student applications for health professions student 
loans;
    (2) Documentation of the financial need of applicants; and
    (3) Copy of financial aid transcript(s).
    (c) The following repayment records for each individual borrower 
must be retained for at least 5 years from the date of retirement of a 
loan:
    (1) The amount and date of each loan;
    (2) The amount and date of each payment or cancellation;
    (3) Records of periods of deferment;
    (4) Date, nature and result of each contact with the borrower or 
proper endorser in the collection of an overdue loan;
    (5) Copies of all correspondence to or from the borrower and 
endorser;
    (6) Copies of all correspondence with collection agents related to 
the individual borrower;
    (7) Copies of all correspondence with a credit bureau related to an 
individual borrower; and
    (8) Copies of all correspondence relating to uncollectible loans 
which have been written off by the Federal Government or repaid by the 
school.
    (d) The school must also retain other records as the Secretary may 
prescribe. In all cases where questions have arisen as a result of a 
Federal audit, the records must be retained until resolution of all 
questions.
    (e) Institutional officials who have information which indicates the 
potential or actual commission of fraud or other offenses against the 
United States, involving these loan funds, should promptly provide this 
information to the appropriate Regional Office of Inspector General for 
Investigations.

(Approved by the Office of Management and Budget under control number 
0915-0047)

[48 FR 25070, June 3, 1983, as amended at 50 FR 34421, Aug. 23, 1985; 53 
FR 46549, Nov. 17, 1988; 56 FR 19294, Apr. 26, 1991; 57 FR 45734, Oct. 
5, 1992; 61 FR 6123, Feb. 16, 1996]

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