[Code of Federal Regulations]

[Title 34, Volume 1]

[Revised as of July 1, 2006]

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

[CITE: 34CFR30.60]



[Page 56-57]

 

                           TITLE 34--EDUCATION

 

PART 30_DEBT COLLECTION--Table of Contents

 

    Subpart E_What Costs and Penalties Does the Secretary Impose on 

                           Delinquent Debtors?

 

Sec.  30.60  What costs does the Secretary impose on delinquent debtors?



    Source: 53 FR 33425, Aug. 30, 1988, unless otherwise noted.





    (a) The Secretary may charge a debtor for the costs associated with 

the collection of a particular debt. These costs include, but are not 

limited to--

    (1) Salaries of employees performing Federal loan servicing and debt 

collection activities;

    (2) Telephone and mailing costs;

    (3) Costs for reporting debts to credit bureaus;

    (4) Costs for purchase of credit bureau reports;

    (5) Costs associated with computer operations and other costs 

associated with the maintenance of records;

    (6) Bank charges;

    (7) Collection agency costs;

    (8) Court costs and attorney fees; and

    (9) Costs charged by other Governmental agencies.

    (b) Notwithstanding any provision of State law, if the Secretary 

uses a collection agency to collect a debt on a contingent fee basis, 

the Secretary charges the debtor, and collects through the agency, an 

amount sufficient to recover--

    (1) The entire amount of the debt; and

    (2) The amount that the Secretary is required to pay the agency for 

its collection services.

    (c)(1) The amount recovered under paragraph (b) of this section is 

the entire amount of the debt, multiplied by the following fraction:

[GRAPHIC] [TIFF OMITTED] TC15NO91.009



    (2) In paragraph (c)(1) of this section, cr equals the commission 

rate the Department pays to the collection agency.

    (d) If the Secretary uses more than one collection agency to collect 

similar debts, the commission rate (cr) described in paragraph (c)(2) of 

this section is calculated as a weighted average of the commission rates 

charged by all collection agencies collecting similar debts, computed 

for each fiscal year based on the formula

[GRAPHIC] [TIFF OMITTED] TC15NO91.010





where--



    (1) Xi equals the dollar amount of similar debts placed by the 

Department with an individual collection agency as of the end of the 

preceding fiscal year;

    (2) Yi equals the commission rate the Department pays to that 

collection agency for the collection of the similar debts;



[[Page 57]]



    (3) Z equals the dollar amount of similar debts placed by the 

Department with all collection agencies as of the end of the preceding 

fiscal year; and

    (4) N equals the number of collection agencies with which the 

Secretary has placed similar debts as of the end of the preceding fiscal 

year.

    (e) If a debtor has agreed under a repayment or settlement agreement 

with the Secretary to pay costs associated with the collection of a debt 

at a specified amount or rate, the Secretary collects those costs in 

accordance with the agreement.

    (f) The Secretary does not impose collection costs against State or 

local governments under paragraphs (a) through (d) of this section.



(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3711(e), 

3717(e)(1), 3718))