[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: 42CFR60.42]



[Page 341-342]

 

                         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.



[[Page 342]]



    (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]