[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: 42CFR60.34]

[Page 326-327]
 
                         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 D--The Lender and Holder
 
Sec. 60.34  HEAL loan account servicing.

    HEAL loan account servicing involves the proper maintenance of 
records, and the proper review and management of accounts. Generally 
accepted account servicing standards ensure that collections are 
received and accounted for, delinquent accounts are identified promptly, 
and reports are produced comparing actual results to previously 
established objectives.

[[Page 327]]

    (a) Borrower inquiries. A lender or holder must respond on a timely 
basis to written inquiries and other communications from a borrower and 
any endorser of a HEAL loan.
    (b) Conversion of loan to repayment status. (1) At least 30 and not 
more than 60 days before the commencement of the repayment period, the 
lender or holder must contact the borrower in writing to establish the 
terms of repayment. Lenders or holders may not charge borrowers for the 
additional interest or other charges, penalties, or fees that accrue 
when a lender or holder does not contact the borrower within this time 
period and a late conversion results.
    (2) Terms of repayment are established in a written schedule that is 
made a part of, and subject to the terms of, the borrower's original 
HEAL note.
    (3) The lender or holder may not surrender the original promissory 
note to the borrower until the loan is paid in full. At that time, the 
lender or holder must give the borrower the original promissory note.
    (c) Borrower contacts. The lender or holder must notify each 
borrower by a written contact, which has an address correction request 
on the envelope, of the balance owed for principal, interest, insurance 
premiums, and any other charges or fees owed to the lender, at least 
every 6 months from the time the loan is disbursed. The lender or holder 
must use this notice to remind the borrower of the option, without 
penalty, to pay all or part of the principal and accrued interest at any 
time.
    (d) Skip-tracing. If, at any time, the lender or holder is unable to 
locate a borrower, the lender or holder must initiate skip-tracing 
procedures as described in Sec. 60.35(a)(2).

(Approved by the Office of Management and Budget under control numbers 
0915-0043 and 0915-0108)

[48 FR 38988, Aug. 26, 1983, as amended at 52 FR 748, Jan. 8, 1987; 57 
FR 28796, June 29, 1992]