RULES AND REGULATIONS
Title 22--EDUCATION
PENNSYLVANIA HIGHER EDUCATION
ASSISTANCE AGENCY
[22 PA. CODE CH. 121]
State Grant Program; Early Childhood Education Professional Loan Forgiveness Program
[30 Pa.B. 3924] The Pennsylvania 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 (1965), No. 541) (24 P. S. § 5151); The Institutional Assistance Grants Act (24 P. S. §§ 5181--5189); and the Urban and Rural Teacher Loan Forgiveness Act (24 P. S. §§ 5191--5197); and the Agriculture Education Loan Forgiveness Act (24 P. S. §§ 5198--5198.7), is amending §§ 121.1, 121.2, 121.7--121.9, 121.21, 121.32, 121.33, 121.42, 121.48 and 121.56 and adding §§ 121.10 and 121.401--121.406.
Purpose of Regulations
The changes affect the State Grant Program (24 P. S. § 5152.1); Loan Programs (24 P. S. §§ 5104--5112); and the Early Childhood Education Professional Loan Forgiveness Program (24 P. S. §§ 7103--7106).
Public Comment
Written comments, suggestions and objections were solicited within a 30-day period of 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. The 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. Section 121.1--Definitions--Clarity
Comment:
It was requested that the term ''Board of Directors'' be changed to ''Board'' in § 121.10(b).
Response:
The phrase ''Board of Directors'' was replaced with the word ''Board'' in § 121.10. For consistency purposes we also made this change in §§ 121.8, 121.9 and 121.42.
Comment:
Section 121.10(b)(2) contains a definition of ''borrower.''
Response:
Definition of ''borrower'' was added to § 121.1
Comment:
Section 121.10(b)(1)(i) contains a definition of ''disposable pay.''
Response:
Although the referenced section was removed from the final version of the regulation as it is part of 20 U.S.C.A § 1095a, which has been incorporated by reference, the definition of ''disposable pay'' was added to § 121.1 since the term appears elsewhere in the regulations.
Comment:
Section 121.10(b)(1)(viii) (which is now § 121.10(b)(2)), does not clearly define ''timely request.''
Response:
The phrase ''make a timely request for hearing'' was replaced with ''request for a hearing within 20 days of the mailing of the notice.''
2. Section 121.10(b)(1)(x) (which is now § 121.10(b)(3)).
Comment:
Written and oral requests for a hearing--clarity.
Response:
The first sentence was restructured into two sentences as suggested.
By way of further response, a ''written hearing'' is conducted by review of written documents submitted by both the borrower and the Agency. The hearing examiner reviews all exhibits and written statements offered and then issues his ruling based on the hearing examiner's review of the documents without any oral testimony.
3. Section 121.10(b)(1)(xi) (which is now § 121.10(b)(4)) and (xii).
Comment:
Issuance of an order of withholding--clarity.
Response:
The phrase ''from the date of receipt of the borrower's hearing request'' was added to the last sentence of § 121.10(b)(1)(xi) (which is now § 121.10(b)(4)). Subparagraph (xii) was removed from the final version of the regulation as it is part of 20 U.S.C.A. § 1095a.
4. Section 121.10(b)(1)(xiii) (which is now § 121.10 (b)(5)).
Comment:
Hearing examiners--clarity.
Response:
The phrase ''including an administrative law judge'' was deleted.
5. Section 121.10(b)(1)(xix)--(xxi) (which is now § 121.(b) (11)--(13)).
Comment:
Hearing procedures--clarity. Questions were received regarding who rules on exceptions, the hearing examiner or the Board of Directors: Does the hearing examiner issue a proposed report or a final report? And, finally, are proceedings before the Board of Directors considered the last stage in the adjudicatory process or the first level of administrative appeal?
Response:
The hearing examiner issues a proposed final order. The proposed order is then reviewed and accepted or rejected by the Board. Proceedings before the Board of Directors are considered the last stage in the adjudicatory process.
6. Section 121.10(b)(1)(i), (vi) and (xxii). Wage garnishment procedures involving employers--clarity.
Comment:
A subsection should be created titled ''employer provisions.''
Response:
This was no longer necessary with the incorporation by reference of 20 U.S.C.A § 1095a.
Comment:
A question was received regarding whether the ''garnishment notice'' mentioned in subsection (b)(1)(ix) is another term used for the ''order of withholding'' mentioned in subparagraph (viii).
Response:
The term ''garnishment notice'' was replaced with the term ''order of withholding.''
Comment:
A subsection should be created relating to Agency actions with employers.
Response:
A new subsection (c) was created.
7. Section 121.10(b)(1)(ii)--(v).
Borrower rights--clarity
Comment:
A question was received regarding whether the opportunities offered by the borrower in subparagraphs (iii)--(v) are included in the written notice described in subparagraph (ii).
Response:
Subparagraphs (iii)--(v) were removed as they are no longer necessary with the incorporation by reference of 20 U.S.C.A § 1095a. The answer to this question is, however, that the information is indeed included in the written notice.
8. Section 121.10
Comment:
Need and clarity. Incorporate by reference section 488A of the Higher Education Act of 1995 (20 U.S.C.A. § 1095a), rather than recite portions of the statutory provision.
Response:
20 U.S.C.A. § 1095a was incorporated by reference as suggested and the repeated portions of the statutory provisions of the regulation were removed.
121.10(b)(1)(i) has been removed as it corresponds to 20 U.S.C.A § 1095a(a)(1)
121.10(b)(1)(ii) has been removed as it corresponds to 20 U.S.C.A § 1095a(a)(2)
121.10(b)(1)(iii) has been removed as it corresponds to 20 U.S.C.A § 1095a(a)(3)
121.10(b)(1)(iv) has been removed as it corresponds to 20 U.S.C.A § 1095a(a)(4)
121.10(b)(1)(v) has been removed as it corresponds to 20 U.S.C.A § 1095a(a)(5)
121.10(b)(1)(vi) has been removed as it corresponds to 20 U.S.C.A § 1095a(a)(6)
121.10(b)(1)(vii) has been removed as it corresponds to 20 U.S.C.A § 1095a(a)(7)
121.10(b)(1)(ix) has been removed as it corresponds to 20 U.S.C.A § 1095a(c)
121.10(b)(1)(xii) has been removed as it corresponds to 20 U.S.C.A § 1095a(b)
121.10(b)(1)(xxii) has been removed as it corresponds to 20 U.S.C.A § 1095a(a)(8)
9. Section 121.33--Approved Program of Study in Higher Education Grant Program
Comment:
Comments were received from the House Education Committee and Montgomery County Community College regarding the percentage of classroom instruction time needed for course eligibility for a State grant recipient.
Response:
We continue to monitor all available sources of information in this regard and will adjust the percentage as soon as it is deemed appropriate.
10. Section 121.401--Application of Existing Agency Regulations
Comment:
Need and clarity.
Response:
The phrase ''except those provisions inconsistent with this subchapter'' has been removed. The reference to Subchapter B has also been deleted.
11. Section 121.403--Loan Forgiveness
Comment:
Clarity
Response:
The phrase ''in accordance with the procedures established by the Agency'' was replaced with ''to the lender/servicer in March and September.'' Additionally, the requirements for time periods and maximum amounts have been structured as subsections within the section.
12. Section 121.406--Lottery
Comment:
Economic impact and clarity. A question was received regarding how the applicant will know what Agency requirements must be met to be eligible for the lottery.
Response:
The phrase ''Agency requirements'' was replaced with § 121.402 in § 121.406(b). This refers the applicant to the eligibility requirements.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on March 28, 1998, the Agency submitted a copy of the notice of proposed rulemaking, published at 28 Pa.B. 1535, IRRC and to the House Education Committee and the Senate Education Committee for review and comment.
In compliance with section 5(c), the Agency also provided IRRC and the Committees with copies of all comments received as well as other documentation. In preparing this final-form regulations the Agency has considered the comments received from IRRC, the Committees and the public.
These final-form regulations were deemed approved by the House and Senate Education Committees on June 14, 2000. IRRC met on June 22, 2000, and approved the final-form regulations in accordance with section 5(c) of the Regulatory Review Act.
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, 121.2, 121.7--121.9, 121.21, 121.32, 121.33, 121.42, 121.48, 121.56 and by adding §§ 121.10 and 121.401--121.406 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: For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 30 Pa.B. 3534 (July 8, 2000).)
Fiscal Note: Fiscal Note 58-23 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 § 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--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.
Borrower--All endorsers on loans authorized by this chapter.
Disposable pay--That part of the borrower's compensation from an employer remaining after the deduction of any amounts required by law to be withheld.
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, the Higher Education Amendments of 1992 (Pub. L. No. 102-325), 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 all 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 or was a cadet or midshipman at one of the service academies 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 was activated for duty. ROTC students, cadets or midshipmen currently attending the service academies, 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) A permanent resident alien of the United States, a temporary resident who intends to become a United States citizen or resident, or a refugee in the United States for other than a temporary purpose. For the purposes of this paragraph, the United States includes the 50 states, the District of Columbia, Puerto Rico, Virgin Islands, Guam, American Samoa, the Trust Territory of the Pacific Islands and the Northern Mariana Islands.
§ 121.7. Notice of denial and preliminary review procedures.
(a) If the Agency staff determines that eligibility for financial assistance should be denied, the applicant or recipient shall be notified in writing of the determination, the grounds therefor, and his right to appeal from the decision of the Agency staff.
(b) All appeals from the decisions of the Agency staff will be reviewed initially by an Administrative Review Committee composed of staff personnel of the Agency designated by the President and Chief Executive Officer. The Administrative Review Committee may grant eligibility in cases it deems proper. This subsection supersedes 1 Pa. Code § 35.20 (relating to appeals from actions of the staff).
(c) When the Agency through its Administrative Review Committee denies an applicant or recipient eligibility for financial assistance, the applicant or recipient may obtain a review of the Agency's determination by the Committee on Appeals. The Committee on Appeals will determine whether or not the applicant or recipient is eligible for financial assistance.
(d) An appeal to the Committee on Appeals shall be filed on or before the 60th day after the date on which notification of the determination by which he is aggrieved was delivered personally to the applicant or recipient or mailed to him at his last known post office address. The Committee on Appeals may waive this requirement in its discretion.
(e) The appeal shall be filed in the offices of the Agency at Harrisburg, and shall include the following information:
(1) The name, address and Social Security number of the applicant or recipient.
(2) The date of the decision being appealed.
(3) The reasons for appeal.
(4) The signature of the applicant or recipient.
(f) Use of the prescribed appeal form is not mandatory to initiate an appeal. Any written notice that may reasonably be construed as a request for an appeal, delivered or mailed to a authorized representative or to any office of the Agency within the prescribed 60-day appeal period, advising that the applicant or recipient is aggrieved and apparently desires a review of the determination denying him financial assistance, shall be deemed to initiate and constitute an appeal. Thereafter, the applicant or recipient shall perfect the appeal by filing a completed appeal form within a reasonable time after instructions for filing the appeal form have been delivered or mailed to him at his last known post office address. The date of initiation of an appeal delivered by mail, either on the prescribed appeal form or by any other form of written communication, will be determined from the postmark appearing upon the envelope in which the appeal form or written communication was mailed.
(g) Appeal forms may be obtained from any local field office of the Agency or at the offices of the Agency at Harrisburg. Assistance in completing and filing the appeal form can be obtained at any local field office of the Agency or at the offices of the Agency in Harrisburg.
§ 121.8. Applicant and recipient appeals and hearings.
(a) An applicant or recipient who is aggrieved by a determination of the Committee on Appeals denying him eligibility for financial assistance may file an appeal to the Board.
(b) An appeal to the Board shall be filed on or before the 15th day after the date on which notification of the determination by which he is aggrieved was delivered personally to the applicant or recipient or mailed to him at his last known post office address.
(c) Use of the prescribed appeal form is not mandatory to initiate an appeal. Any written notice that may reasonably be construed as a request for an appeal, delivered or mailed to a duly authorized representative or to any office of the Agency within the prescribed 15-day appeal period, advising that the applicant or recipient is aggrieved and apparently desires a review of the determination denying him financial assistance, will be deemed to initiate and constitute an appeal. Thereafter, the applicant or recipient shall perfect the appeal by filing a completed appeal form within a reasonable time after instructions for filing the appeal form have been delivered or mailed to him at his last known post office address. The date of initiation of an appeal delivered by mail, either on the prescribed appeal form or by any other form of written communication, will be determined from the postmark appearing upon the envelope in which the appeal form or written communication was mailed.
(d) The appeal may be heard by the Board or, at its direction, 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. The hearing examiner or the Board will schedule the appeal promptly for hearing and give the applicant or recipient at least 7 days' notice of the hearing. The notice will specify the date, hour and place of hearing.
(e) Hearings will be held at the offices of the Agency in Harrisburg. During the hearing, the applicant or recipient will be given the opportunity to submit testimony or evidence, or both, in support of his contentions. The applicant or recipient will also have the right to present oral and written argument and to cross-examine any witnesses offered by the Agency. This subsection supplements 1 Pa. Code § 35.126 (relating to presentation by the parties).
(f) Where a hearing examiner has been appointed, he shall prepare or cause the preparation of a verbatim transcript of the hearing, develop findings of fact and conclusions of law, and forward these directly to the Board for review and final decision. This subsection supplements 1 Pa. Code §§ 35.131 and 35.202 (relating to recording of proceedings; and proceedings in which proposed reports are prepared).
(g) The Board will make an order or determination as appears just and proper from the evidence submitted.
(h) Notice of the decision of the Board will be mailed promptly to the applicant or recipient at his last known post office address.
(i) Where the decision of the Board is in favor of the applicant or recipient, he shall be eligible for retroactive financial assistance payments for the period during which such assistance was temporarily delayed.
(j) The decision of the Board on an appeal will become final 10 days after the date thereof. Within 30 days after the decision of the Board becomes final, the applicant or recipient may file an appeal therefrom with Commonwealth Court.
§ 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).
§ 121.10. Administrative wage garnishment procedures for Federal loans.
(a) This section implements and incorporates by reference the Federal administrative wage garnishment process authorized under section 488A of the Higher Education Act of 1965 (20 U.S.C.A. § 1095a) and 34 CFR 682.410(b)(10) (relating to fiscal, administrative, and enforcement requirements).
(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.
(c) The agency will sue any employer for any amount that the employer, after receipt of the order of withholding provided by the Agency, fails to withhold from wages owed and payable to an employe under the employer's normal pay and disbursement cycle.
(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).
SECONDARY SCHOOL GRADUATION § 121.21. Requirement for higher education grant applicants.
(a) A State higher education grant applicant shall be a graduate of or attending an approved secondary school, or be a recipient of a Commonwealth secondary school diploma
(b) An approved secondary school shall be any public or private secondary school, located in this Commonwealth or elsewhere, including foreign institutions and United States schools overseas, which in the judgment of the Department of Education provides a course of instruction at the secondary level and maintains standards of instruction substantially equivalent to the standards of instruction of the public high schools located in this Commonwealth.
(c) For purposes of the State Higher Education Grant Program, an approved secondary school shall also include any home education program that is accredited by any home schooling accreditation agency approved by the Department of Education. If the home education program lacks the requisite accreditation, certification by the appropriate local school official attesting that the home education program is in compliance with section 1327.1 of the Public School Code of 1949 (24 P. S. § 13-1327.1) shall be submitted to the Agency by the appropriate local school official.
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