[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: 42CFR60.20]

[Page 322-323]
 
                         TITLE 42--PUBLIC HEALTH
 
    CHAPTER I--PUBLIC HEALTH SERVICE, DEPARTMENT OF HEALTH AND HUMAN 
                                SERVICES
 
PART 60--HEALTH EDUCATION ASSISTANCE LOAN PROGRAM--Table of Contents
 
                           Subpart C--The Loan
 
Sec. 60.20  The Secretary's collection efforts after payment of a default claim.

    After paying a default claim on a HEAL loan, the Secretary attempts 
to collect from the borrower and any valid endorser in accordance with 
the Federal Claims Collection Standards (4 CFR parts 101 through 105), 
the Office of Management and Budget Circular A-129, issued May 9, 1985, 
and the Department's Claims Collection Regulation (45 CFR part 30). The 
Secretary attempts collection of all unpaid principal, interest, 
penalties, administrative costs, and other charges or fees, except in 
the following situations:

[[Page 323]]

    (a) The borrower has a valid defense on the loan. The Secretary 
refrains from collection against the borrower or endorser to the extent 
of any defense that the Secretary concludes is valid. Examples of a 
valid defense include expiration of the statute of limitations and 
infancy.
    (b) A school owes the borrower a refund for the period covered by 
the loan. In this situation, the Secretary refrains from collection to 
the extent of the unpaid refund if the borrower assigns to the Secretary 
the right to receive the refund.
    (c) The school or lender or holder is the subject of a lawsuit or 
Federal administrative proceeding. In this situation, if the Secretary 
determines that the proceeding involves allegations that, if proven, 
would provide the borrower with a full or partial defense on the loan, 
then the Secretary may suspend collection activity on all or part of a 
loan until the proceeding ends. The Secretary suspends collection 
activity only for so long as the proceeding is being energetically 
prosecuted in good faith and the allegations that relate to the 
borrower's defense are reasonably likely to be proven.
    (d) The borrower dies or becomes totally and permanently disabled. 
In this situation, the Secretary terminates all collection activity 
against the borrower. If the borrower dies or becomes totally and 
permanently disabled, the Secretary also terminates all collection 
activity against any endorser.

[48 FR 38988, Aug. 26, 1983, as amended at 52 FR 747, Jan. 8, 1987; 57 
FR 28795, June 29, 1992]