20 AAC 15.940 - Limitations on awarding loans
(a) A loan may not
be awarded for
(1) an educational program
that is a vocational or recreational in nature;
(2) flight instruction leading to
certification as a private pilot;
(3) a flight school program, unless the
student holds a private pilot's certificate at the time of application for the
loan;
(4) flight instruction for
type ratings or other proficiencies, unless the student holds a commercial
license at the time of application for the loan; or
(5) a program of study offered outside the
state in which the institution is located, unless the program's location is
based upon, and serves, a bona fide educational purpose.
(b) For attendance at a flight school
program, only one loan will be awarded to a student for each certification or
flight rating.
(c) Only one loan
will be awarded to a student to attend a non-flight career education program
that is 12 months or less in duration and that awards a single certificate or
degree.
(d) Once a borrower has
established residency under
AS
14.43.125(a), the borrower
does not lose residency status because of absence from the state for reasons
not allowed under that subsection for a period of no more than 12 consecutive
months if the borrower has a continuing intent to return to and remain
permanently in the state.
(e) For
the purposes of
AS
14.43.125(a)(6), it is
presumed that a person cannot repay a loan as it becomes due, and may only
obtain a loan in compliance with
AS
14.43.125(d), if the person
(1) is incarcerated full-time in a
correctional facility, as that term is defined in
AS
33.30.901, and the person's scheduled release
date is more than six months after the scheduled completion date of the career
education or degree for which the loan is requested; or
(2) is permanently disabled to an extent that
the person will not be able to receive income in an amount that would allow
repayment of the loan, and there is no reasonable medical possibility that the
condition of permanent disability will improve before the loan enters
repayment.
(f) For the
purposes of
AS
14.43.125(a)(7),
AS
14.43.172(c)(5), or
14.43.750(a)(1)(B),
a person has defaulted on a loan if any of the following has occurred:
(1) foreclosure upon or repossession of
collateral for a loan or installment contract;
(2) execution procedures initiated on an
unpaid loan or installment contract;
(3) entry of judgment accelerating the amount
due under a loan or installment contract;
(4) the discharge by a creditor of a debt or
installment contract due to nonpayment on a balance greater than
$250.
(g) If an
applicant's credit history, learned through a credit check or otherwise, shows
any of the following within the preceding two years, the applicant for a loan
may obtain the loan only in compliance with
AS
14.43.125(d):
(1) eviction from rental or leased housing
based on non-payment;
(2) two or
more credit accounts for which payments are currently three months or more past
due;
(3) checks returned for
insufficient funds on three or more occasions;
(4) lien for delinquent taxes that are not
satisfied within 24-months, unless disputed and dispute pending;
(5) two or more references of an account to a
credit collection agency; or
(6) an
unsatisfactory credit score based on the industry standard set by the credit
agency performing the review.
(h) The commission staff will perform a
credit history check on a loan applicant who
(1) is 21 years of age or older;
(2) is under 21 years of age if the
commission staff has cause to believe that adverse credit actions will appear
on the applicant's credit history;
(3) is under 21 years of age if the person
has one or more dependent children; or
(4) has attained independent financial status
by reaching the age of majority upon marriage under
AS
25.20.020 or being emancipated under
AS
09.55.590.
(i) In an appeal under
20 AAC 15.915 of a denial of loan
eligibility under
AS
14.43.125(a)(7) or (8), the
appellant may request that evidence of prior credit performance, in addition to
that considered under (f) and (g) of this section be considered to mitigate the
findings of the review of the applicant's credit history. The appellant must be
able to show that extraordinary circumstances beyond the applicant's control
led to the adverse credit history and that the applicant made good faith
efforts to pay the past debt, or that the credit history does not accurately
reflect the appellant's ability or willingness to pay debts as they become due.
If the appellant bases the appeal on the showing of extraordinary circumstances
that led to the adverse credit history, the appellant has the burden to show
that a good credit history existed before the extraordinary
occurrence.
(j) For purposes of
AS
14.43.125(d), a cosigner is
presumed to demonstrate an ability or willingness to pay an extension of credit
or loan as it becomes due if, at the time of the application for a loan, the
cosigner has a FICO score that is equal to or higher than the FICO score set by
the corporation or meets other FICO score - related credit criteria set by the
corporation.
Notes
Authority:AS 14.42.030
AS 14.43.105
AS 14.43.120
AS 14.43.125
AS 14.43.172
AS 14.43.300
AS 14.43.305
AS 14.43.320
AS 14.43.630
AS 14.43.640
AS 14.43.740
AS 14.43.750
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