[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: 42CFR60.34]



[Page 333]

 

                         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.

    (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]