22 Pa. Code § 121.9 - Administrative loan collection review procedures
(a) This section implements the
administrative loan collection review process authorized by the act of April
29, 1982 (P. L. 365, No. 102) (24 P. S. §
5104.3).
(b) Administrative loan collection procedure
for those loans which are held by the Agency and which are not reinsured by the
United States Secretary of Education is as follows:
(1) A borrower served with a statement of
claim shall file a response thereto within 30 days of receipt of the statement
of claim. The statement of claim shall inform the borrower of the nature and
the amount of the indebtedness, the intention of the Agency to initiate
proceedings to collect the debt through garnishment and an explanation of the
rights of the borrower under the law. The response shall set forth all defenses
and objections which the borrower has to the statement of claim and any
objections or defenses not so presented will be deemed to have been waived. The
response shall admit or deny all averments contained in the statement of claim.
An averment in a statement of claim will be deemed to be denied only if proof
thereof is demanded and the borrower states either that:
(i) After reasonable investigation, the
borrower is without knowledge or information sufficient to form a belief as to
the truth of the averment.
(ii) The
borrower is without that knowledge or information because the means of proof
are within the exclusive control of an adverse party or hostile
person.
(2) When a
borrower files a response to a statement of claim filed in the records of the
Agency, the borrower will be afforded an opportunity to enter into a written
agreement with the Agency, under terms agreeable to the head of the Agency or a
designee, to establish a repayment schedule. The borrower will be afforded a
hearing if he does not want to enter into a repayment schedule.
(3) Hearings will be conducted by a hearing
examiner appointed by the Chairperson of the Board of the Agency or, in the
event of the unavailability of the Chairperson, by the Vice Chairperson of the
Board of the Agency from a list maintained by the President and Chief Executive
Officer and will be held at the offices of the Agency in Harrisburg. The time
of the hearing will be fixed by the Agency within a reasonable time, as soon as
convenient, after the receipt of the borrower's response, allowing at least 15
days' notice to be given to the borrower and the borrower's attorney, if an
attorney has entered an appearance on behalf of the borrower. Notice of the
hearing will be sent to the borrower by the hearing examiner, specifying the
time and place for hearing. If a borrower wishes to request postponement of a
hearing, the borrower shall contact the hearing examiner and provide the
hearing examiner with valid reasons for the request. The hearing examiner may
approve or disapprove the request in the examiner's discretion.
(4) The borrower shall have the following
rights during the hearing:
(i) To present
testimony and arguments in person.
(ii) To be represented by an
attorney.
(iii) To confront and
cross-examine adverse witnesses.
(iv) To examine all documents and records
used by the Agency at the hearing. Copies of materials from the files of the
Agency relevant to the hearing shall be provided at a reasonable time prior to
the day of the hearing upon request without charge to the borrower.
(v) To have the Agency prove its claim by a
preponderance of the evidence.
(5) A request for a hearing may be dismissed
by the hearing examiner when it is withdrawn by a borrower in a writing
submitted to the hearing examiner. If a borrower fails to appear at a scheduled
hearing without good cause as determined by the hearing examiner, the request
for a hearing will be considered abandoned and will be dismissed with prejudice
by the hearing examiner.
(6) The
hearing examiner will have the following powers and duties:
(i) To administer oaths.
(ii) To question witnesses presented by the
Agency or the borrower.
(iii) To
hear the evidence submitted, review the documents presented, consider the
arguments and prepare a report.
(iv) To recommend in the report a proposed
adjudication and order, supported by findings of fact and conclusions of
law.
(v) To 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 within 60 days of the
hearing.
(7) 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 Agency will present its
case.
(iii) The borrower or the
borrower's attorney may cross-examine each witness.
(iv) The borrower or the borrower's attorney
will present the borrower's case.
(v) The Agency may cross-examine each witness
presented by the borrower.
(vi) The
hearing examiner may question any witness at any time.
(8) The borrower and the President and Chief
Executive Officer of the Agency shall 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.
(9) 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.
(10) Any form
of written communication to the Agency that may be reasonably construed as
exceptions, advising that the borrower is aggrieved and desires a review of the
hearing examiner's report, will be deemed exceptions to the proposed report
sufficient to initiate and constitute an appeal to the Board.
(11) When the Board receives notice of an
appeal, it will place the appeal on the meeting agenda of the Board at such
time in the future as the Board has received a stenographic record of the
hearing before the hearing examiner and has had an opportunity to review the
record. 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, before rendering a recommendation for action by the
Board. The Board will make the final order as appears to it just and
proper.
(12) 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. The President and Chief Executive
Officer may transfer the record and the order of default to the court of common
pleas of the district in which the borrower resides or, when residence within
this Commonwealth cannot be ascertained, to the Court of Common Pleas of
Dauphin County, to be entered as a judgment.
(13) Within 30 days of the mailing date set
forth in the notice of the final order by the Board the borrower who is
aggrieved by the final order may appeal the order to the court of common pleas
of the district in which the borrower resides or the Court of Common Pleas of
Dauphin County. Within 20 days after entry of judgment, the borrower may apply
to the court in which the judgment is entered to set aside such
judgment.
(14) If no appeal is
filed, the Agency may execute upon the wages, salaries or commissions in the
hands of an employer or other person including the borrower when self-employed
by serving a notice of its intent on the borrower and a notice of execution on
the employer. The notice of execution shall include the following:
(i) The total amount to be collected from the
borrower.
(ii) That the amount to
be remitted to the Agency for a given pay period shall be limited to 10% of the
borrower's disposable pay, that being any pay remaining after the deduction of
any amounts required by law to be withheld.
(iii) That the employer is not required to
vary its normal pay and disbursement cycles in order to comply with paragraph
(2).
(iv) That the employer will be
held liable for a civil penalty equivalent to the amount of the notice of
execution for wages not properly withheld after receipt of the notice of
execution.
(15) This
section affects 1 Pa. Code Part II (relating to General Rules of Administrative
Practice and Procedure) as follows:
(i)
Subsection (b)(1) supersedes 1 Pa. Code §35.14 (relating to orders to show
cause).
(ii) Subsection (b)(3)
supersedes 1 Pa. Code §§35.105 and 35.185 (relating to notice of
nonrulemaking proceedings; and designation of presiding officers). Subsection
(d) supplements 1 Pa. Code §
31.26 (relating to service on
attorneys).
(iii) Subsection
(b)(4)(i)-(iii) supplements 1 Pa. Code §35.126 (relating to presentation
by the parties); subsection (b)(4)(iv) supersedes 1 Pa. Code §35.169
(relating to copies to parties and agency).
(iv) Subsection (b)(6)(i)-(iii) supplements 1
Pa. Code §35.187 (relating to authority delegated to presiding officers);
subsection (b)(6)(iv) supersedes 1 Pa. Code §35.205 (relating to contents
of proposed reports); subsection (b)(6)(v) supersedes 1 Pa. Code §35.207
(relating to service of proposed reports).
(v) Subsection (b)(7) supplements 1 Pa. Code
§35.125 (relating to order of procedure).
(vi) Subsection (b)(8) supersedes 1 Pa. Code
§35.211 (relating to procedure to except to proposed report).
(vii) Subsection (b)(9) supplements 1 Pa.
Code §35.226 (relating to final orders).
(viii) Subsection (b)(11) supersedes 1 Pa.
Code §35.214 (relating to oral argument on exceptions).
Notes
The provisions of this § 121.9 issued under section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. § 5104); and section 1 of the act of January 25, 1966 (P. L. 1546, No. 541) (24 P. S. § 5151); amended under section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. § 5104); section 1 of the act of January 25, 1966 (P. L. 1546, No. 541) (24 P. S. § 5151); The Institutional Assistance Grants Act (24 P. S. §§ 5181-5189); the Urban and Rural Teacher Loan Forgiveness Act (24 P. S. §§ 5191-5197); and the Agriculture Education Loan Forgiveness Act (24 P. S. §§ 5198.1-5198.7).
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