34 CFR 674.46 - Litigation procedures.
(1) If the collection efforts described in§ 674.45 do not result in the repayment of a loan, the institution shall determine at least once every two years whether—
(i) The total amount owing on the borrower's account, including outstanding principal, accrued interest, collection costs and late charges on all of the borrower's Federal Perkins,NDSL and National Defense Student Loans held by that institution, is more than $500;
(A) The borrower has sufficient assets attachable under State law to satisfy a major portion of the oustanding debt; or
(B) The borrower has income from wages or salary which may be garnished under applicable State law sufficient to satisfy a major portion of the debt over a reasonable period of time;
(v) The expected cost of litigation, including attorney's fees, does not exceed the amount which can be recovered from the borrower.
(2) The institution shall sue the borrower if it determines that the conditions in paragraph (a)(1) of this section are met.
(3) The institution may sue a borrower in default, even if the conditions in paragraph (a)(1) of this section are not met.
(1) All litigation costs, including attorney's fees, court costs and other related costs, to the extent permitted under applicable law; and
(ii) Invested in low-risk income-producing securities, such as obligations issued or guaranteed by the United States.
(2) An institution shall exercise the level of care required of a fiduciary with regard to these deposits and investments.
(d) If the institution is unable to collect the full amount owing on the loan after following the procedures set forth in§§ 674.41 through 674.46, the institution may—
(1) Submit the account to the Secretary for assignment in accordance with the procedures in§ 674.50; or
[52 FR 45555, Nov. 30, 1987, as amended at 59 FR 61412, 61415, Nov. 30, 1994; 67 FR 67077, Nov. 1, 2002]
Title 34 published on 2014-07-01.
No entries appear in the Federal Register after this date, for 34 CFR Part 674.