[Code of Federal Regulations]

[Title 42, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR60.20]



[Page 329]

 

                         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:

    (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]