(b) Loan collection procedure for those loans
which are held by the
Agency and which qualify as loans under the Federal
Family Education Loan Program (FFELP) are as follows:
(1) If the Agency decides to garnish the
disposable pay of a borrower who is not making payments on a loan held by the
Agency, on which the United States Secretary of Education (Secretary) has paid
a reinsurance claim, it shall do so in accordance with the procedures in
section 488A of the Higher Education Act of 1965.
(2) Unless the Agency receives information
that justifies a delay or cancellation of the order of withholding, it will
send an order of withholding to the employer within 20 days after the borrower
fails to request a hearing within 20 days of the date of mailing of the notice,
or if a timely request for a hearing is made by the borrower, within 20 days
after a final decision is made by the Agency to proceed with
garnishment.
(3) The Agency will
provide a hearing if the borrower submits a written request for a hearing on
the existence or amount of the debt or the terms of the repayment schedule. The
borrower may request an oral hearing or a written hearing. The time and
location of the hearing will be established by the Agency. An oral hearing may,
at the borrower's option, be conducted either in-person or by telephone
conference. Telephonic charges are the responsibility of the Agency.
(4) If the borrower's written request is
received by the Agency on or before the 15th day following the borrower's
receipt of the notice the Agency may not issue an order of withholding until
the borrower has been provided the requested hearing. For purposes of this
subsection, in the absence of evidence to the contrary, a borrower will be
considered to have received the notice 5 days after it was mailed by the
Agency. The Agency will provide a hearing to the borrower in sufficient time to
permit a decision to be rendered within 60 days from the day of receipt of the
borrower's hearing request.
(5) The
hearing examiner appointed by the
Agency to conduct the hearing may be any
qualified individual not under the supervision or control of the
President and
Chief Executive Officer of the
Agency and have the power and duty to:
(i) Administer oaths.
(ii) Question witnesses presented by the
Agency or by the borrower.
(iii)
Hear evidence submitted, review the documents presented, consider arguments and
prepare a report.
(iv) Recommend in
the report a proposed adjudication and order, supported by findings of fact and
conclusions of law.
(v) Provide
copies of the report to the President and Chief Executive Officer of the Agency
and to the borrower or the borrower's attorney of record at the earliest
practicable date, but not later than 60 days after the Agency's receipt of the
borrower's hearing request.
(6) The proceedings of a hearing will be
conducted in the following order:
(i) The
hearing examiner will state the purpose of the hearing, the procedure to be
followed, and the manner in which the report will be transmitted to the
parties.
(ii) The borrower or the
borrower's attorney will present the borrower's case.
(iii) The Agency may cross-examine each
witness presented by the borrower.
(iv) The Agency will present its
case.
(v) The borrower or the
borrower's attorney may cross-examine each witness presented by the
Agency.
(vi) The hearing examiner
may question any witness at any time.
(7) The borrower and the President and Chief
Executive Officer of the Agency will each have the right to file exceptions to
the hearing examiner's report within 15 days after the service of a copy of the
report. Failure to file exceptions within the time allowed shall constitute a
waiver of all objections to the report.
(8) The period of time may, for good cause,
be extended upon motion made before the expiration of the 15-day time period
and filed with the hearing examiner.
(9) The period of time may be extended upon
motion made after the expiration of the 15-day time period where reasonable
grounds are shown for failure to act. The motion shall be filed with the
hearing examiner.
(10) Requests for
the extension to time in which to file briefs shall be filed with the hearing
examiner at least 5 days before the time fixed for filing the briefs.
(11) Upon consideration of the record, the
hearing examiner's report, and any exceptions and briefs filed by the borrower
and the President and Chief Executive Officer of the Agency, the Board will
enter a final order.
(12) When the
Board receives notice of an appeal, it will place the appeal on the meeting
agenda of the Board after the Board has reviewed a stenographic record of the
hearing before the hearing examiner. The Board may delegate to the review
committee, comprised of three or more Board members designated by the
Chairperson of the Board, the responsibility to review the record and hearing
examiner's report to the Board and to make a recommendation for action by the
Board. The review committee will provide an opportunity for the borrower and
the Agency to present oral argument, when requested by either party, before
rendering a recommendation for action by the Board. Oral argument may be
conducted either in-person or by telephone conference. Telephonic charges are
the responsibility of the Agency. The Board will make a final order that is
just and proper.
(13) Notice of the
entry of a final order by the Board will be mailed promptly to the borrower at
the borrower's last known post office address.
(d) This section affects 1 Pa. Code Part II
(relating to General Rules of Administrative Practice and Procedure) as
follows:
(1) Subsection (b)(3) supersedes 1
Pa. Code §
35.105 (relating to notice of
nonrulemaking proceedings).
(2)
Subsection (b)(5)(i)-(iii) supplements 1 Pa. Code §
35.187 (relating to authority
delegated to presiding officers); subsection (b)(5)(iv) supersedes 1 Pa. Code §
35.205 (relating to contents of
proposed reports); subsection (b)(5)(v) supersedes 1 Pa. Code §
35.207 (relating to service of
proposed reports).
(3) Subsection
(b)(6) supplements 1 Pa. Code §
35.125 (relating to order of
procedure).
(4) Subsection (b)(7)
supersedes 1 Pa. Code §
35.211 (relating to procedure to
except to proposed reports).
(5)
Subsection (b)(8)-(10) supersedes 1 Pa. Code §
31.15(a)
(relating to extensions of time) and supplements 1 Pa. Code Chapter 35,
Subchapter D (relating to motions).
(6) Subsection (b)(11) supplements 1 Pa. Code
§
35.226 (relating to final
orders).
(7) Subsection (b)(12)
supersedes 1 Pa. Code §
35.214 (relating to oral argument
on exceptions).