[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: 42CFR60.42]

[Page 335]
 
                         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. 60.42  Records, reports, inspection, and audit requirements for HEAL lenders and holders.

    (a) Records. (1) A lender or holder must keep complete and accurate 
records of each HEAL loan which it holds. The records must be organized 
in a way that permits them to be easily retrievable and allows the ready 
identification of the current status of each loan. The required records 
include:
    (i) The loan application;
    (ii) The original promissory note;
    (iii) The repayment schedule agreement;
    (iv) Evidence of each disbursement of loan proceeds;
    (v) Notices of changes in a borrower's address and status as a full-
time student;
    (vi) Evidence of the borrower's eligibility for a deferment;
    (vii) The borrower's signed statement describing his or her rights 
and responsibilities in connection with a HEAL loan;
    (viii) The documents required for the exercise of forbearance;
    (ix) Documentation of the assignment of the loan; and
    (x) Evidence of a borrower's creditworthiness, including the 
borrower's credit report.
    (2) The lender or holder must maintain for each borrower a payment 
history showing the date and amount of each payment received on the 
borrower's behalf, and the amounts of each payment attributable to 
principal and interest. A lender or holder must also maintain for each 
loan a collection history showing the date and subject of each 
communication with a borrower or endorser for collection of a delinquent 
loan. Furthermore, a lender or holder must keep any additional records 
which are necessary to make any reports required by the Secretary.
    (3) A lender or holder must retain the records required for each 
loan for not less than 5 years following the date the loan is repaid in 
full by the borrower. However, in particular cases the Secretary may 
require the retention of records beyond this minimum period. A lender or 
holder must keep the original copy of an unpaid promissory note, but may 
store all other records in microform or computer format.
    (4) The lender or holder must maintain accurate and complete records 
on each HEAL borrower and related school activities required by the HEAL 
program. All HEAL records shall be maintained under security and 
protected from fire, flood, water leakage, other environmental threats, 
electronic data system failures or power fluctuations, unauthorized 
intrusion for use, and theft.
    (b) Reports. A lender or holder must submit reports to the Secretary 
at the time and in the manner required by the Secretary.
    (c) Inspections. Upon request, a lender or holder must afford the 
Secretary, the Comptroller General of the United States, and any of 
their authorized representatives access to its records in order to 
assure the correctness of its reports.
    (d) The lender or holder must comply with the Department's biennial 
audit requirements of section 705 of the Act.
    (e) Any lender or holder who has information which indicates 
potential or actual commission of fraud or other offenses against the 
United States, involving these loan funds, must promptly provide this 
information to the appropriate Regional Office of Inspector General for 
Investigations.

(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 750, Jan. 8, 1987; 57 
FR 28798, June 29, 1992]