[Code of Federal Regulations] [Title 34, Volume 3] [Revised as of July 1, 2007] From the U.S. Government Printing Office via GPO Access [CITE: 34CFR682.406] [Page 748-749] TITLE 34--EDUCATION CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION PART 682_FEDERAL FAMILY EDUCATION LOAN (FFEL) PROGRAM--Table of Contents Subpart D_Administration of the Federal Family Education Loan Programs by a Guaranty Agency Sec. 682.406 Conditions for claim payments from the Federal Fund and for reinsurance coverage. (a) A guaranty agency may make a claim payment from the Federal Fund and receive a reinsurance payment on a loan only if-- (1) The lender exercised due diligence in making, disbursing, and servicing the loan as prescribed by the rules of the agency; (2) With respect to the reinsurance payment on the portion of a loan represented by a single disbursement of loan proceeds-- (i) The check for the disbursement was cashed within 120 days after disbursement; or (ii) The proceeds of the disbursement made by electronic funds transfer or master check in accordance with Sec. 682.207(b)(1)(ii) (B) and (C) have been released from the restricted account maintained by the school within 120 days after disbursement; (3) The lender provided an accurate collection history and an accurate payment history to the guaranty agency with the default claim filed on the loan showing that the lender exercised due diligence in collecting the loan through collection efforts meeting the requirements of Sec. 682.411, including collection efforts against each endorser; (4) The loan was in default before the agency paid a default claim filed thereon; (5) The lender filed a default claim thereon with the guaranty agency within 90 days of default; (6) The lender resubmitted a properly documented default claim to the guaranty agency not later than 60 days from the date the agency had returned that claim due solely to inadequate documentation, except that interest accruing beyond the 30th day after the date the guaranty agency returned the claim is not reinsured unless the lender files a claim for loss on the loan with the guarantor together with all required documentation, prior to the 30th day; (7) The lender satisfied all conditions of guarantee coverage set by the agency, unless the agency reinstated guarantee coverage on the loan following the lender's failure to satisfy such a condition pursuant to written policies and procedures established by the agency; (8) The agency paid or returned to the lender for additional documentation a default claim thereon filed by the lender within 90 days of the date the lender filed the claim or, if applicable, the additional documentation, except that interest accruing beyond the 60th day after the date the lender originally filed the claim is not reinsured; (9) The agency submitted a request for the payment on a form required by the Secretary no later than 30 days following payment of a default claim to the lender; (10) The loan was legally enforceable by the lender when the agency paid a claim on the loan to the lender; (11) The agency exercised due diligence in collection of the loan in accordance with Sec. 682.410(b)(6); (12) The agency and lender, if applicable, complied with all other Federal requirements with respect to the loan including-- (i) Payment of origination fees; (ii) For Consolidation loans disbursed on or after October 1, 1993, and prior to October 1, 1998, payment on a monthly basis, of an interest payment rebate fee calculated on an annual basis and equal to 1.05 percent of the unpaid principal and accrued interest on the loan; (iii) For Consolidation loans for which the application was received by the lender on or after October 1, 1998 and prior to February 1, 1999, payment on a monthly basis, of an interest payment rebate fee calculated on an annual basis and equal to 0.62 percent of the unpaid principal and accrued interest on the loan; (iv) For Consolidation loans disbursed on or after February 1, 1999, payment of an interest payment rebate [[Page 749]] fee in accordance with paragraph (a)(12)(ii) of this section; and (v) Compliance with all default aversion assistance requirements in Sec. 682.404(a)(2)(ii). (13) The agency assigns the loan to the Secretary, if so directed, in accordance with the requirements of Sec. 682.409; and (14) The guaranty agency certifies to the Secretary that diligent attempts have been made by the lender and the guaranty agency under Sec. 682.411(h) to locate the borrower through the use of effective skip-tracing techniques, including contact with the schools the student attended. (b) Notwithstanding paragraph (a) of this section, the Secretary may waive his right to refuse to make or require repayment of a reinsurance payment if, in the Secretary's judgment, the best interests of the United States so require. The Secretary's waiver policy for violations of paragraph (a)(3) or (a)(5) of this section is set forth in appendix D to this part. (c) In evaluating a claim for insurance or reinsurance, the issue of confirmation of subsequent loans under an MPN will not be reviewed and a claim will not be denied based on the absence of any evidence relating to confirmation in a particular loan file. However, if a court rules that a loan is unenforceable solely because of the lack of evidence of a confirmation process or processes, insurance and reinsurance benefits must be repaid. (Approved by the Office of Management and Budget under control number 1845-0020) (Authority: 20 U.S.C. 1078, 1078-1, 1078-2, 1078-3, 1082) [57 FR 60323, Dec. 18, 1992, as amended at 58 FR 9119, Feb. 19, 1993; 59 FR 25746, May 17, 1994; 59 FR 33356, June 28, 1994; 59 FR 61429, Nov. 30, 1994; 61 FR 60486, Nov. 27, 1996; 64 FR 18980, Apr. 16, 1999; 64 FR 58629, Oct. 29, 1999; 64 FR 58963, Nov. 1, 1999; 65 FR 65620, Nov. 1, 2000; 66 FR 34764, June 29, 2001; 71 FR 45708, Aug. 9, 2006]