RULES AND REGULATIONS
Title 22--EDUCATION
HIGHER EDUCATION ASSISTANCE AGENCY
[22 PA. CODE CH. 121]
Loan Program Amendments
[26 Pa.B. 3321] The Higher Education Assistance Agency (Agency), under authority contained in 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 act of July 18, 1974 (P. L. 483, No. 174) (24 P. S. §§ 5181--5189), the act of July 1, 1988 (P. L. 1259, No. 155) (24 P. S. §§ 5191--5197) and the act of June 26, 1992 (P. L. 322, No. 64) (24 P. S. §§ 5198.1--5198.7) is amending Chapter 121 (relating to student financial aid).
The changes affect the State Grant Program (24 P. S. § 5152.1), Institutional Assistance Grants Program (24 P. S. §§ 5181--5197), Loan Programs (24 P. S. § 5104), Urban and Rural Teacher Loan Forgiveness Program (24 P. S. §§ 5191--5197) and the Agricultural Education Loan Forgiveness Program (24 P. S. §§ 5198.1--5198.7).
Public Comment
Written comments, suggestions and objections were solicited within a 30-day period after the publication date. As a result of the comments received from the Independent Regulatory Review Commission (IRRC) and the standing committees, numerous revisions were made to the proposed amendments. These final-form regulations now include language revisions to clarify the meaning of various sections. The revisions do not, however, enlarge the original purpose of the proposed rulemaking.
Summary of Changes
Comments 1. Comment:
The House Education Committee (Committee) inquired into the potential fiscal impact upon the Commonwealth due to the adoption and implementation of these amendments.
Response:
There should be no additional impact upon the Commonwealth due to the adoption and implementation of these amendments.
2. Comment:
The Committee inquired as to whether the Agency planned to promulgate regulations for the Keystone Stafford Loan Program.
Response:
No additional regulations will be promulgated in relation to the Keystone Stafford Loan Program.
3. Comment:
The Committee and IRRC recommended including within the final-form regulations provisions relating to the eligibility of part-time students for State Grants, and addressing the qualifications for scholarship awards as provided for by the General Assembly under Act 1994-83.
Response:
The Agency has complied with these recommendations by including within the final-form version of these amendments to §§ 121.5, 121.6 and 121.49 (relating to enrollment; denial of eligibility for financial assistance; and duration of State higher education grants).
4. Comment:
Section 121.1. Definitions--IRRC made a number of recommendations including: that the Agency define the acronym ''PLUS''; that the Agency delete the term ''Executive Director'' and replace it with the term ''President and Chief Executive Officer''; that the Agency modify the definition of ''full-time basis''; that the Agency establish a separate definition for the ''Federal Family Education Loan Program'' in the final-form version of the rulemaking; and, that the Agency add a definition of ''emergency action.''
Response:
''Federal PLUS Loan''--Federal legislation no longer contains a reference to ''PLUS'' as an acronym; therefore, the definition as written complies with Federal law and regulations.
''President and Chief Executive Officer''--The Agency has complied with IRRC's recommendations.
''Full-time basis (except for purposes of the Federal Stafford Loan and the Federal PLUS Loan Programs)''--The Agency has deleted this term from the definition section, and included in § 121.5 of the final rulemaking the substantive provisions referenced by IRRC.
''Federal Family Education Loan (FFEL) Program''--The Agency has added a definition of ''Federal Family Education Loan Program.''
''Emergency action''--The Agency has added a definition to § 121.1.
5. Comment:
Section 121.31. Approved institutions in Federal Stafford Loan and Federal PLUS Loan Programs. Section 121.91. Approved lending institutions in Federal Stafford Loan, Federal PLUS Loan, Federal Consolidation Loan Programs. IRRC and the Committee had several comments concerning these sections, including that the Agency include provisions for standards of conduct in §§ 121.31 and 121.191 of the proposed amendments; that the Agency delineate with greater specificity the additional administrative requirements with which institutions are required to comply; that the Agency provide that institutions requesting a hearing may do so at least 5 business days prior to the effective date of the suspension; that the Agency indicate that § 121.191(h)(2) refers specifically to lending institutions; that the Agency indicate the manner in which decisions to limit, suspend or terminate institutional participation will be conveyed; that the section provides the Board of Directors the authority to order oral argument; that the section provide that the decision of the Board of Directors is final upon mailing; and, that the section provides that notices of appeal are to be filed within 30-calendar days after the entry of the order from which the appeal is taken.
Response:
The Agency has incorporated into these final-form regulations the recommendations made by the Committee and IRRC.
6. Comment:
Section 121.32. Approved institutions in higher education grant program. The Committee and IRRC recommended that the Agency provide greater specificity in the regulation as to additional administrative requirements that the Agency will promulgate. IRRC expressed concerns with subsection (b)(1) requiring that colleges and universities outside this Commonwealth be operated not-for-profit and subsection (b)(3) which requires that trade, technical or business schools located outside this Commonwealth be operated not-for-profit. IRRC indicated that the proposal is silent on not-for-profit requirements for colleges and universities within this Commonwealth, hospital schools of nursing within this Commonwealth and outside this Commonwealth, and for trade, technical or business schools located within this Commonwealth. The Commission requested that the Agency explain the purpose of the not-for-profit requirement and the rationale for its application to institutions located outside this Commonwealth.
Response:
The Agency has, within these final-form regulations, clarified the additional administrative requirements. As to the Commission's concern with the exclusion of profit-making schools located outside this Commonwealth, the rationale for this distinction is based upon the Agency's historical concern with the absence of adequate oversight of the such out-of-State institutions on a National basis. Within this Commonwealth, the oversight is provided by the State Board of Private Licensed Schools and the Department of Education. Moreover, the Commonwealth has a legitimate interest in enhancing the ability of residents to elect enrollment in a Pennsylvania postsecondary institution. Under its enabling legislation, the Board of Directors has the authority to establish program parameters. Furthermore, the Agency notes that this section is consistently applied to institutions located within this Commonwealth and to those located outside this Commonwealth, although it is not the same for both.
7. Comment:
Section 121.34. Institutional appeals and hearings (other than the Federal Family Educational Loan Program). This section provides for appeals and hearings by an educational institution in cases where the Agency suspends the processing of student aid requests or ceases disbursement of funds to the institution. IRRC recommended that the Agency establish a time frame within which to schedule appeals.
Response:
The Agency has modified this section in the final rulemaking to provide that appeals will be scheduled for hearing within 30 days from the date on which the appeal is filed.
8. Comment:
Section 121.61. Submission and processing of applications. This section provides direction to a student in obtaining a loan application packet. IRRC recommended that the language of this provision be modified to indicate that the information provided on the form will be used to determine the eligibility of the applicant to receive a Federal Stafford Loan. IRRC also recommended that the title of Subchapter C, Loan Guaranty Program, be replaced with the subchapter title ''Federal Stafford Loan Program'' which would be consistent with the name change provided in the subchapter.
Response:
The Agency has complied with IRRC's recommendations.
9. Comment:
Section 121.131. Submission and processing of applications. Section 121.181. Submission and processing of applications. These sections provide direction for submission and processing of applications for the PLUS Program and the Consolidation Loan Program, respectively. IRRC recommended a change to this provision to clarify that it is the information provided on the form that is used to determine the eligibility of the applicant rather than the form itself. IRRC additionally recommended that § 121.181 set forth language indicating that a lender shall provide an adverse action notice to the borrower if loan assistance is denied.
Response:
The Agency has complied with the Commission's recommendations.
10. Comment:
Section 121.201. Application of Existing Agency Regulations. This provision states that the regulations contained in Subchapters A and B apply to applicants in the Urban and Rural Teacher Loan Forgiveness Program ''except those provisions which are inconsistent with this subchapter.'' The Commission recommended that the Agency either specifically cite to inconsistent provisions or delete this phrase from the final form version of the rulemaking.
Response:
The Agency has deleted this phrase from the final-form version of the rulemaking.
11. Comment:
Section 121.204. Teaching Commitment. IRRC recommended that the Agency refine in the final-form version the reference to ''other criteria for eligibility.''
Response:
The Agency has revised this subsection to address IRRC's concerns.
12. Comment:
Section 121.302. Application of existing Agency Regulations. This section states that enumerated sections of the higher education grant regulations apply to applicants in the Agricultural Loan Forgiveness Program ''except those provisions which are inconsistent with this subchapter.'' IRRC recommended that inconsistent provisions either be specifically cited, or that this phrase be deleted from the final-form version of the rulemaking.
Response:
The Agency has deleted this provision from the final-form version of the rulemaking.
13. Comment:
Section 121.304. Loan forgiveness. This section contains provisions for eligibility for payment of loans by the Agency. Applicants engaged in the mixed practice of veterinary medicine are required to spend a portion of their activity in the protection and enhancement of agricultural animal health and productivity. IRRC recommended that the Agency add a provision to this section clarifying that the Agency will forgive a proportional part of the applicant's loan commensurate with the portion of activity conducted in the protection and enhancement of agricultural animal health and productivity.
Response:
The Agency has indicated that the portion of work devoted to farm animals defines only the eligibility requirements of the applicant; there is no correlation in the statute between the amount of time the applicant spends working with farm animals and the payment of a portion of the debt by the Agency. Therefore, the section in its proposed form is consistent with the statute. The Agency has interpreted the term ''a proportional part of the applicant's loan'' to mean the maximum amount permitted by law or some amount less than the maximum, depending on the outstanding loan balance. The Department of Agriculture agrees with the Agency's interpretation of the act.
14. Comment:
Section 121.305. Employment verification. IRRC recommended that the statement ''other criteria for eligibility'' as contained in § 121.305 either be deleted or that any additional criteria for eligibility be clearly stated.
Response:
The Agency has revised the section to address the Commission's concerns.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on May 2, 1995, the Agency submitted a copy of the notice of proposed rulemaking, published at 25 Pa.B. 1860 (May 13, 1995), to IRRC and the House Education Committee and the Senate Education Committee for review and comment. In compliance with section 5(b.1) of the Regulatory Review Act, the Agency also provided IRRC and the Committees with copies of the comments received as well as other documentation.
In preparing these final-form regulations, the Agency has considered the comments received from IRRC, the Committees and the public.
In accordance with section 5(c) of the Regulatory Review Act, these final-form regulations were deemed approved by the House Education Committee and the Senate Education Committee on April 29, 1996. IRRC met on May 2, 1996, and approved the regulations.
Findings
The Agency finds that:
(1) Public notice of the Agency's intention to adopt the amendments was given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.
(2) The amendments adopted by this order are necessary and appropriate for the administration of the act.
Order
The Agency, acting under its authorizing statute, therefore, orders that:
(a) The regulations of the Agency, 22 Pa. Code Chapter 121, are amended by amending §§ 121.1--121.3, 121.5, 121.6, 121.31, 121.32, 121.34, 121.35, 121.44, 121.49, 121.50, 121.55, 121.61, 121.65, 121.69, 121.70, 121.72, 121.121, 121.123, 121.124, 121.131, 121.135, 121.137, 121.139--121.142, 121.181--121.184 and 121.191; by deleting §§ 121.66 and 121.136; and by adding §§ 121.201--121.207 and 121.301--121.306, to read as set forth in Annex A.
(b) The Agency shall submit this order and Annex A to the Office of Attorney General for approval as required by law.
(c) The Agency shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(d) This order shall be effective upon publication in the Pennsylvania Bulletin.
MICHAEL H. HERSHOCK,
President and Chief Executive Officer(Editor's Note: The following sections, amended in this document, were not included in the proposal at 25 Pa.B. 1860 (May 13, 1995): §§ 121.5, 121.6, 121.49 and 121.50.
(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 26 Pa.B. 2369 (May 18, 1996).)
Fiscal Note: Fiscal Note 58-22 remains valid for the final adoption of the subject regulations.
Annex A
TITLE 22. EDUCATION
PART VIII. HIGHER EDUCATION
ASSISTANCE AGENCY
CHAPTER 121. STUDENT FINANCIAL ASSISTANCE
Subchapter A. GENERAL PROVISIONS
MISCELLANEOUS § 121.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Academic term--A semester, trimester or quarter.
Academic year--A period that begins on the first day of classes or examinations and that is a minimum of 30 weeks of instructional time during which, for an undergraduate educational program, a full-time student is expected to complete at least 24 semester or trimester hours or 36 quarter hours at a school which measures program length in credit hours or at least 900 clock hours at a school which measures program length in clock hours.
Agency or PHEAA--The Pennsylvania Higher Education Assistance Agency.
Board--The Board of Directors of the Agency.
Emergency action--Immediate action undertaken against institutions by the President and Chief Executive Officer in a manner consistent with § 121.31(d) (relating to approved institutions in Federal Stafford Loan and Federal PLUS Loan Programs) to withhold the processing of loan applications of the institution; and in a manner consistent with § 121.191(d) (relating to administrative loan collection review procedures) against a lending institution to withhold the processing of loan applications for students borrowing through the institution.
Federal Consolidation Loan--A loan made in accordance with section 428C of the Higher Education Act of 1965 (20 U.S.C.A. § 1078-3).
Federal Family Education Loan (FFEL) Program--The loan program (formerly called the Guaranteed Student Loan (GSL) Program) authorized by Title IV-B of the Higher Education Act of 1965 (20 U.S.C.A. §§ 1071--1087-2), including the Federal Stafford Loan, Federal PLUS, Federal Supplemental Loans for Students (Federal SLS) and Federal Consolidation Loan Programs, in which lenders use their own funds to make loans to enable students or their parents to pay the costs of the student's attendance at eligible institutions.
Federal PLUS Loan--A loan made in accordance with section 428B of the Higher Education Act of 1965 (20 U.S.C.A. § 1078-2).
Federal Stafford Loan--A loan made in accordance with section 428, if subsidized, or section 428H, if unsubsidized, of the Higher Education Act of 1965 (20 U.S.C.A. §§ 1078 and 1078-8).
Full-time basis (except for purposes of the Federal Stafford Loan and Federal PLUS Loan Programs)--The equivalent of 12 semester credits or 450 clock hours of instruction per academic term. If the schedule of a program of study offered on a clock-hour basis does not permit the equivalent of 450 clock hours of instruction per term, full-time enrollment shall be defined as 24 clock hours of instruction per week.
Full-time basis (for purposes of the Federal Stafford Loan and Federal PLUS Loan Programs only)--To be considered enrolled on a full-time basis, a student shall be carrying a full-time academic work load (other than by correspondence) as determined by the institution under a standard applicable to the students enrolled in a particular educational program. The student's work load may include any combination of courses, work, research or special studies that the institution considers sufficient to classify the student as a full-time student. For undergraduate students, an institution's minimum standard shall equal or exceed one of the following minimum requirements:
(i) Twelve semester hours or 12 quarter hours per academic term in an educational program using a semester, trimester or quarter system.
(ii) Twenty-four semester hours or 36 quarter hours per academic year in an educational program using credit hours but not using a semester, trimester or quarter system or the prorated equivalent for a program of less than 1 academic year.
(iii) Twenty-four clock hours per week for an educational program using clock hours.
(iv) A series of courses or seminars that equals 12 semester hours or 12 quarter hours in a maximum of 18 weeks.
(v) The work portion of a cooperative education program in which the amount of work performed is equivalent to the academic work load of a full-time student.
(vi) Other requirements as prescribed by Federal regulations.
Guaranteed Student Loan Program--A Federal loan guaranty program administered by the Agency that enables qualified students to secure long-term educational loans to meet the costs of postsecondary education. On July 23, 1992, Federal law (Pub.L. No. 102-325), the Higher Education Amendments of 1992, changed the name of the program to The Federal Family Education Loan Program. Whenever the term is used in this chapter, it refers to and shall be regarded as, ''The Federal Family Education Loan Program.''
Guardian--For purposes of determining domicile, a person other than a parent with whom an applicant has lived and in whose continuous direct care and control the applicant has been for a period of at least 2 years.
Half-time basis--At least 1/2 the work load of a full-time student, except students enrolled solely in an eligible program of study by correspondence cannot be considered more than half time.
Hearing examiner--A neutral third party, not an employe or staff member of the Agency, appointed by a designated Agency official to conduct hearings on Agency matters, consider written materials, weigh the evidence presented and issue impartial decisions.
Parent (for purposes of borrowing under the Federal PLUS Loan Program)--A student's mother or father or legal guardian. An adoptive parent is considered to be the person's mother or father.
President and Chief Executive Officer--The President and Chief Executive Officer of the Agency.
Quarter--A period of approximately 11 weeks normally comprising 1/3 of the academic year.
SAT--The College Entrance Examination Board's Scholastic Assessment Test.
Semester--A period of approximately 17 weeks normally comprising 1/2 of the academic year.
Trimester--A period of approximately 15 weeks normally comprising 1/2 of the academic year.
Veteran--A person who engaged in active service in the United States Army, Navy, Air Force, Marines or Coast Guard and was released under a condition other than dishonorable, or will be by June 30 of the academic year for which the application is made, or who was a National Guard or Reserve enlistee who participated in Operation Desert Shield/Storm and was discharged from active duty. ROTC students, cadets or midshipmen at the service academies, National Guard or Reserve enlistees participating in Operation Desert Shield/Storm and not yet discharged from active duty, National Guard or Reserve enlistees who were not activated for duty, or those currently serving in the United States Armed Forces and will continue to serve through June 30 of the academic year for which application is made are not considered veterans.
§ 121.2. Citizenship.
To be eligible for a Federal Family Education Loan, a student or parent borrower shall be, on or before the date of filing the loan guaranty application, one of the following:
(1) A citizen or National of the United States.
(2) In the United States for other than a temporary purpose and intending to become a permanent resident thereof; except that a student who is a permanent resident alien attending an educational institution outside the United States is not eligible to receive a Federal Stafford Loan or to have the parent of the student receive a Federal PLUS Loan on behalf of the student. For the purposes of this paragraph, the United States includes the District of Columbia, Puerto Rico, Virgin Islands, Guam, American Samoa, the Trust Territories of the Pacific and the Northern Mariana Islands.
§ 121.3. Discrimination prohibited.
The race, religious creed, color, sex, National origin, ancestry, handicap, age or marital status of a student or parent applicant will not be factors of consideration for eligibility except to the extent that adjustments or allowances based on marital status may be necessary within the State Higher Education Grant and the Federal Family Education Loan Programs to properly reflect the ability of the family to finance costs of education.
§ 121.5. Enrollment.
(a) Student and parent loans. For a student or a parent of a student to be eligible for a loan guaranty, a student shall be or be about to be enrolled in an approved institution of higher learning on at least a half-time basis and be maintaining satisfactory progress as determined by the school.
(b) Higher education grants. To be eligible for a State higher education grant, a student shall be or be about to be enrolled in an approved institution of higher learning on at least a half-time basis. In addition, the President and Chief Executive Officer may treat students as full time if unusual circumstances would not permit the student to comply with the exact full-time basis requirements as defined in § 121.1 (relating to definitions). In these instances, the President and Chief Executive Officer will thereafter notify the Board of his action.
§ 121.6. Denial of eligibility for financial assistance.
(a) To be eligible for a State higher education grant, a student applicant or recipient shall have and maintain satisfactory character. In determining whether an applicant or recipient has satisfactory character, the Agency may consider, among other factors, convictions of any of the following offenses:
(1) A criminal offense which under the laws of the United States or any state constitutes a felony.
(2) A criminal offense which under the laws of the Commonwealth constitutes murder of the first degree, felony of the first degree, felony of the second degree, felony of the third degree, misdemeanor of the first degree, misdemeanor of the second degree or misdemeanor of the third degree.
(3) A violation of section 13 of The Controlled Substance, Drug, Device and Cosmetic Act (35 P. S. § 780-113), except for section 13(a)(31) (35 P. S. § 780-113(a)(31)) thereof.
(b) If a State grant applicant is incarcerated, which shall be interpreted to mean confinement in a prison but to exclude residence in a ''halfway house'' under a so-called prerelease program, the applicant will not be eligible for State grant aid until the applicant has been released from incarceration.
(c) An applicant for any form of financial assistance may be denied eligibility if the Agency determines that the applicant or another member of the applicant's family upon whom the applicant depends for support has submitted fraudulent information to the Agency.
(d) An applicant for any form of financial assistance may be denied eligibility if the Agency determines that the applicant has used educational loan funds for other than educational purposes.
(e) Eligibility for financial assistance may be denied to a person who owes a refund in a grant program as described in the Higher Education Act of 1965, act of November 8, 1965 (Pub.L. No. 89-329, 79 Stat. 1219), or on a State higher education grant.
(f) Nothing in this section limits the freedom of a student to verbal or other lawful expression of individual views or opinions.
(g) A student denied financial assistance under this section shall be afforded full recourse through an appeal to the Committee on Appeals, the Board and the courts to seek reinstatement of assistance if the assistance is determined to have been improperly denied.
EDUCATIONAL INSTITUTIONS § 121.31. Approved institutions in Federal Stafford Loan and Federal PLUS Loan Programs.
(a) To be approved, an institution shall comply with the following:
(1) The institution shall be approved by the United States Secretary of Education as an eligible institution for participation in the Federal Stafford Loan or Federal PLUS Loan Programs.
(2) The institution shall have executed an Assurance of Compliance with 42 U.S.C.A. § 2000d-1 (1974) and filed it with the United States Secretary of Education.
(3) The institution shall have executed and filed with the Agency an agreement, on a form provided by the Agency, to report to or advise the Agency if the institution has knowledge of the name and address of Commonwealth resident students who are recipients or beneficiaries of Agency-administered aid who have been convicted in any court of record of any criminal offense which under the laws of the United States or of the Commonwealth would constitute a felony committed after October 29, 1969. Institutional knowledge shall be facts contained in the academic, disciplinary or financial student records of the institution and facts known to the dean of students, director of financial aid and president of the institution or persons occupying these positions by titles designated by the institution.
(b) The institution shall comply with 34 CFR 668.82 (relating to standard of conduct) and other laws and regulations governing the Federal Stafford Loan and PLUS Loan Programs.
(c) Mailing dates and receipt dates referenced in this section shall be evidenced by United States Postal Service receipts. If an institution refuses or fails to accept a notice mailed as set forth in this section, the Agency shall consider the notice as being received on the date that the institution refuses or fails to accept the notice as noted by the United States Postal Service.
(d) The following provisions deal with emergency action:
(1) The President and Chief Executive Officer may take emergency action as follows against an institution under which the processing of loan applications for students at the institution is withheld if the President and Chief Executive Officer:
(i) Receives information, determined by an Agency official to be reliable, that the institution is violating applicable laws, regulations, special arrangements, agreements or limitations.
(ii) Determines that immediate action is necessary to prevent misuse of funds of the programs authorized by Title IV of the Higher Education Act of 1965 (20 U.S.C.A. §§ 1071--1099c-1).
(iii) Determines that the likelihood of loss outweighs the importance of awaiting completion of procedures set forth for suspension, limitation or termination in subsection (e).
(2) The Agency will begin an emergency action by notifying the institution by certified mail, with return receipt requested, of the emergency action and the basis on which the action is taken. The institution shall have an opportunity to show cause that the emergency action is unwarranted via submission of written documentation to the President and Chief Executive Officer. The effective date of the action shall be the date on which the notice is mailed to the institution.
(3) An emergency action may not exceed 30 calendar days unless a suspension, limitation or termination proceeding is begun under this section before the expiration of that period. In this case, the period may be extended until the completion of that proceeding, including any appeal to the Board of Directors.
(e) The following provisions deal with suspension, limitation or termination:
(1) The President and Chief Executive Officer may suspend the eligibility of an institution to participate in the Federal Stafford Loan and Federal PLUS Loan Programs if the institution violates any applicable laws, regulations, special arrangements or agreements. The suspension may not exceed 60-calendar days unless the institution and the President and Chief Executive Officer agree to an extension if the institution has not requested a hearing or the Agency begins a limitation or termination proceeding under this section.
(i) A designated Agency official will notify the institution by certified mail, with return receipt requested, of the Agency's intent to suspend the institution from the Federal Stafford Loan and Federal PLUS Loan Programs, citing the consequences of that action and identifying the alleged violations on which the proposed action is based. The initially designated beginning date of suspension shall be at least 20-calendar days from the date the letter of intent is mailed.
(ii) The institution subject to the suspension notice may request in writing a hearing before a hearing examiner or submit written material for consideration by the designated Agency official. If the institution submits written material or requests a hearing at least 5-calendar days prior to the effective date of suspension, the designated suspension date shall automatically be delayed until after a final determination is made.
(iii) If the institution does not request a hearing but submits written material, the designated Agency official will review the material and notify the institution that either the proposed suspension is dismissed or the suspension is effective as of a specified date.
(iv) If the institution requests a hearing at least 5-calendar days prior to the effective date of suspension, the date of the hearing will be scheduled at least 15-calendar days after receipt of the request.
(A) A hearing examiner selected by the President and Chief Executive Officer will conduct the hearing at the Agency's principal office, and a written record shall be made.
(B) The hearing examiner will consider the written material presented before the hearing and the evidence presented at the hearing.
(C) The hearing examiner will issue a decision to either uphold the suspension or to dismiss it and inform the President and Chief Executive Officer and institution of this decision in writing within 30-calendar days of the conclusion of the hearing.
(D) The hearing examiner's decision is final unless appealed under subsection (g). If the decision is in favor of suspension, the Agency will send a notice to the institution which sets forth the effective date of the suspension.
(E) If the Agency begins a limitation or termination proceeding before the suspension period ends, the suspension period may be extended until the completion of the new proceeding.
(F) The President and Chief Executive Officer will inform the United States Department of Education of actions taken or decisions made by the Agency in regard to the suspension so the United States Department of Education can take appropriate action.
(v) In accordance with 1 Pa Code §§ 35.111--35.116 (relating to prehearing conferences), at any time prior to or during the hearings, the Agency may schedule a conference with the parties.
(2) If the institution violates any applicable laws, regulations, special arrangements or agreements, the President and Chief Executive Officer may limit the number or percentage of borrowers who may receive loan guaranties to attend an institution; may limit, for a stated period of time, the percentage of an institution's total receipts from tuition and fees derived from loan guaranties; may impose a requirement that an institution obtain a bond in a specified amount to assure its ability to meet its financial obligations to borrowers who receive loan guaranties; or may impose other conditions deemed to be reasonable and appropriate.
(i) A designated Agency official will notify the institution by certified mail, with return receipt requested, of the Agency's intent to limit the institution's participation in the Federal Stafford Loan and Federal PLUS Loan Programs, citing the consequences of that action and identifying the alleged violations on which the proposed action is based. The initially designated beginning date of limitation shall be at least 20-calendar days from the date the letter of intent is mailed.
(ii) The institution subject to the limitation notice may request in writing a hearing before a hearing examiner or submit written material for consideration by the designated Agency official. If the institution submits written material or requests a hearing at least 5-calendar days prior to the effective date of the limitation, the designated limitation date shall automatically be delayed until after a final determination is made.
(iii) If the institution does not request a hearing but submits written material, the designated Agency official will review the material and notify the institution that either the proposed limitation is dismissed or the limitation is effective as of a specified date.
(iv) If the institution requests a hearing at least 5-calendar days prior to the effective date of limitation, the date of the hearing shall be at least 15-calendar days after receipt of the request.
(A) A hearing examiner selected by the President and Chief Executive Officer will conduct the hearing at the Agency's principal office, and a written record shall be made.
(B) The hearing examiner will consider the written material presented before the hearing and the evidence presented at the hearing.
(C) The hearing examiner will issue a decision to either uphold the limitation or to dismiss it and inform the President and Chief Executive Officer and the institution of this decision in writing within 30-calendar days of the conclusion of the hearing.
(D) The hearing examiner's decision is final unless appealed under subsection (g). If the decision is in favor of limitation, the Agency will send a notice to the institution which sets forth the effective date of the limitation.
(E) If the Agency begins a termination proceeding before the limitation period ends, the limitation period may be extended until completion of the new proceeding.
(F) The President and Chief Executive Officer will inform the United States Department of Education of actions taken or decisions made by the Agency in regard to the limitation so the United States Department of Education can take appropriate action.
(v) In accordance with 1 Pa. Code §§ 35.111--35.116, at any time prior to or during the hearings, the Agency may schedule a conference with the parties.
(3) The President and Chief Executive Officer may terminate an institution's eligibility to participate in the Federal Stafford Loan and Federal PLUS Loan Programs, if the institution violates any applicable laws, regulations, special arrangements or agreements. Termination prohibits the future guaranty of Federal Stafford Loans and Federal PLUS Loans to borrowers attending the institution.
(i) A designated Agency official will notify the institution by certified mail, with return receipt requested, of the Agency's intent to terminate the institution from the Federal Stafford Loan and Federal PLUS Loan Programs, citing the consequences of that action and identifying the alleged violations on which the proposed action is based. The initially designated beginning date of termination shall be at least 20-calendar days from the date the letter of intent is mailed.
(ii) The institution subject to the termination notice may request in writing a hearing before a hearing examiner or submit written material for consideration by the designated Agency official. If the institution submits written material or requests a hearing no less than 5- calendar days prior to the effective date of termination, the designated termination date shall automatically be delayed until after a final determination is made.
(iii) If the institution does not request a hearing but submits written material, the designated Agency official will review the material and notify the institution that either the proposed termination is dismissed or the termination is effective as of a specified date.
(iv) If the institution requests a hearing at least 5-calendar days prior to the effective date of termination, the date of the hearing shall be at least 15-calendar days after receipt of the request.
(A) A hearing examiner selected by the President and Chief Executive Officer will conduct the hearing at the Agency's principal office, and a written record shall be made.
(B) The hearing examiner will consider the written material presented before the hearing and the evidence presented at the hearing.
(C) The hearing examiner will issue a decision to either uphold the termination or to dismiss it and inform the President and Chief Executive Officer and institution of this decision in writing within 30-calendar days of the conclusion of the hearing.
(D) The hearing examiner's decision is final unless appealed under subsection (g). If the decision is in favor of termination, the Agency will send a notice to the institution which sets forth the effective date of termination.
(E) The President and Chief Executive Officer will inform the United States Department of Education of any actions taken or decisions made by the Agency in regard to the termination so the United States Department of Education can take appropriate action.
(v) In accordance with 1 Pa. Code §§ 35.111--35.116, at any time prior to or during the hearings, the Agency may schedule a conference with the parties.
(f) An institution may lose its eligibility to participate in the Federal Stafford Loan and Federal PLUS Loan Programs through other than emergency action, suspension, limitation or termination. This may occur under one or more of the following conditions:
(1) Change in ownership, administration or directorship of the institution that results in a change of control, in which case the loss of eligibility continues until the institution reestablishes eligibility as determined by the United States Secretary of Education.
(2) Permanent closure of the institution or its termination of approved educational programs.
(3) Action taken by the United States Secretary of Education under applicable Federal regulations to limit, suspend or terminate the institution's eligibility.
(g) The Agency and the institution have the right to appeal the decision of the hearing examiner to the Board of Directors of the Agency within 20-calendar days after the receipt of a copy of the decision, which shall be done by certified mail.
(1) Written notice of appeal and the material submitted in support shall be addressed to the Chairperson of the Board of Directors at the Agency's principal address, with a copy to the other party.
(2) The appealing party has 20-calendar days from the date of the notice of appeal to submit exceptions to the hearing examiner's decision and supporting briefs and statements.
(3) The opposing party has 20-calendar days from receipt of the appealing party's exceptions and brief to respond.
(4) When the Chairperson of the Board receives notice of an appeal, the Chairperson will place the appeal on the meeting agenda of the Board at a time in the future that the Board has received a record of the hearing and the briefs and supporting materials and has had an opportunity to review the record. Before issuing a final order, the Board of Directors will review the record and hearing examiner's decision and may order oral argument.
(5) Notice of a final order by the Board of Directors will be mailed promptly to the institution, the Agency and the United States Department of Education.
(6) The decision of the Board of Directors will become final upon mailing. Within 30-calendar days after the decision of the Board of Directors becomes final, the institution may file an appeal with Commonwealth Court.
(h) An institution whose eligibility to participate was limited may not apply for removal of the limitation before the expiration of 12 months from the effective date of the limitation.
(1) After the minimum limitation period, the institution may request removal of the limitation. The request shall be in writing and be supported by documented evidence that the institution has corrected the violations on which the limitation was based.
(2) Within 60-calendar days after receipt of the request, the President and Chief Executive Officer will respond to the institution by granting the request, denying the request or granting the request subject to other limitation.
(i) An institution whose eligibility to participate has been terminated may file a request of reinstatement 18 months after the effective date of the termination. To be reinstated, an institution shall:
(1) Demonstrate to the President and Chief Executive Officer's satisfaction that it has corrected the violations on which termination was based and repaid funds which it had improperly received.
(2) Meet the requirements for participation in the Federal Stafford Loan and Federal PLUS Loan Programs.
(3) Enter into a new participation agreement with the Agency.
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