Subchapter A. GENERAL PROVISIONS

MISCELLANEOUS

Sec.

121.1.    Definitions.
121.2.    Citizenship.
121.3.    Discrimination prohibited.
121.4.    Denial of eligibility to loan defaulters.
121.5.    Enrollment.
121.6.    Denial of eligibility for financial assistance.
121.7.    Notice of denial and preliminary review procedures.
121.8.    Applicant and recipient appeals and hearings.
121.9.    Administrative loan collection review procedures.
121.10.    Administrative wage garnishment procedures for Federal loans.
121.11.    [Reserved].
121.12.    [Reserved].
121.13.    [Reserved].
121.14.    [Reserved].
121.15.    [Reserved].

SECONDARY SCHOOL GRADUATION

121.21.    Requirement for higher education grant applicants.
121.22.    Early admission students.

EDUCATIONAL INSTITUTIONS

121.31.    Approved institutions in Federal Stafford Loan and Federal PLUS Loan Programs.
121.32.    Approved institution in higher education grant program.
121.33.    Approved program of study in higher education grant program.
121.34.    Institutional appeals and hearings (for other than the Federal Family Education Loan Programs).
121.35.    Payment of interest on Federal Stafford Loans and Federal PLUS Loans.

Cross References

   This subchapter cited in 22 Pa. Code §  121.111 (relating to application of existing Agency regulations); 22 Pa. Code §  121.121 (relating to application of existing Agency regulations); 22 Pa. Code §  121.151 (relating to application of existing Agency regulations); 22 Pa. Code §  121.201 (relating to application of existing Agency regulations); 22 Pa. Code §  121.302 (relating to application of existing Agency regulations); and 22 Pa. Code §  121.401 (relating to application of existing agency regulations).

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—Semester, trimester or quarter.

   Academic year—A period that begins on the first day of classes and ends on the last scheduled day of final 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.

   College entrance examination—A Nationally-recognized standardized test used to assess college readiness chosen at the Agency’s sole discretion to rank students who demonstrate the greatest potential to perform at the highest level of academic achievement.

   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.

   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 service member who was activated for Federal duty by Presidential order. ROTC students, cadets or midshipmen currently attending the service academies, National Guard or Reserve enlistees who were not activated for Federal duty by Presidential order 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.

Authority

   The provisions of this §  121.1 issued under the act of July 12, 1981 (P. L. 264, No. 89) (24 P. S. § §  5102.1 and 5104(1.2)); amended under section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. §  5104); sections 1 and 6(e) of the act of January 25, 1966 (P. L. 1546, No. 541) (24 P. S. § §  5151 and 5156(e)); 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).

Source

   The provisions of this §  121.1 adopted February 27, 1969; amended December 27, 1974, effective December 28, 1974, 4 Pa.B. 2699; amended May 21, 1976, effective May 22, 1976, 6 Pa.B. 1134; amended October 28, 1977, effective October 29, 1977, 7 Pa.B. 3195; amended July 3, 1980, effective July 5, 1980, 10 Pa.B. 2874; amended June 19, 1981, effective June 20, 1981, 11 Pa.B. 2116; amended August 7, 1981, effective August 8, 1981, 11 Pa.B. 2760; amended March 26, 1982, effective March 27, 1982, 12 Pa.B. 1043; amended June 9, 1989, effective June 10, 1989, 19 Pa.B. 2428; amended July 12, 1996, effective July 13, 1996, 26 Pa.B. 3321; amended August 4, 2000, effective August 5, 2000, 30 Pa.B. 3924; amended July 31, 2015, effective August 1, 2015, 45 Pa.B. 4163. Immediately preceding text appears at serial pages (268140) to (268143).

Cross References

   This section cited in 22 Pa. Code §  121.5 (relating to enrollment); 22 Pa. Code §  121.44 (relating to required family financial data); 22 Pa. Code §  121.151 (relating to application of existing Agency regulations); 22 Pa. Code §  121.201 (relating to application of existing Agency regulations); 22 Pa. Code §  121.302 (relating to application of existing Agency regulations); and 22 Pa. Code §  121.401 (relating to application of existing agency regulations).

§ 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.

Authority

   The provisions of this §  121.2 issued under the act of July 12, 1981 (P. L. 264, No. 89) (24 P. S. § §  5102.1 and 5104(1.2)); 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).

Source

   The provisions of this §  121.2 adopted February 27, 1969; reserved February 16, 1973, effective February 17, 1973, 3 Pa.B. 325; added July 27, 1973, effective July 28, 1973, 3 Pa.B. 1427; amended December 27, 1974, effective December 28, 1974, 4 Pa.B. 2699; amended May 21, 1976, effective May 22, 1976, 6 Pa.B. 1134; amended November 10, 1978, effective November 11, 1978, 8 Pa.B. 3084; amended August 7, 1981, effective August 8, 1981, 11 Pa.B. 2760; amended March 26, 1982, effective March 27, 1982, 12 Pa.B. 1043; amended July 12, 1996, effective July 13, 1996, 26 Pa.B. 3321; amended August 4, 2000, effective August 5, 2000, 30 Pa.B. 3924. Immediately preceding text appears at serial pages (218119) to (218120).

§ 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 Program to properly reflect the ability of the family to finance costs of education.

Authority

   The provisions of this §  121.3 amended under section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. §  5104); sections 1 and 6(e) of the act of January 25, 1966 (P. L. 1546, No. 541) (24 P. S. § §  5151 and 5156(e)); 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).

Source

   The provisions of this §  121.3 adopted February 27, 1969; amended May 21, 1976, effective May 22, 1976, 6 Pa.B. 1134; amended August 7, 1981, effective August 8, 1981, 11 Pa.B. 2760; amended March 26, 1982, effective March 27, 1982, 12 Pa.B. 1043; amended November 18, 1988, effective November 19, 1988, 18 Pa.B. 5155; amended July 12, 1996, effective July 13, 1996, 26 Pa.B. 3321; amended July 31, 2015, effective August 1, 2015, 45 Pa.B. 4163. Immediately preceding text appears at serial pages (268144) to (268145).

Cross References

   This section cited in 22 Pa. Code §  121.151 (relating to application of existing Agency regulations); 22 Pa. Code §  121.201 (relating to application of existing Agency regulations); 22 Pa. Code §  121.302 (relating to application of existing Agency regulations); and 22 Pa. Code §  121.401 (relating to application of existing agency regulations).

§ 121.4. Denial of eligibility to loan defaulters.

 (a)  A higher education applicant who has defaulted on an educational loan guaranteed or reinsured by the Federal government, the government of any state or institution is ineligible for an award or a disbursement of funds unless the applicant has repaid the loan in whole or in part and, in the judgment of the Agency, did not make the repayment merely to gain grant eligibility or unless the applicant otherwise shows good cause why grant eligibility should be reinstated. This includes programs administered by the United States Department of Education or PHEAA when awards have been converted to loans due to failure to meet eligibility or service requirements and the loan is in default status.

 (b)  Applicants denied eligibility under this section shall be entitled to review of the denial in accordance with the procedure for review and appeals as provided in § §  121.7 and 121.8 (relating to notice of denial and preliminary review procedures; and applicant and recipient appeals and hearings).

Authority

   The provisions of this §  121.4 issued under the act of July 12, 1981 (P. L. 264, No. 89) (24 P. S. § §  5102.1 and 5104(1.2)); amended under section 6(e) of the act of January 25, 1966 (P. L. 1546, No. 541) (24 P. S. §  5156(e)).

Source

   The provisions of this §  121.4 adopted February 27, 1969; amended February 16, 1973, effective February 17, 1973, 3 Pa.B. 325; amended November 23, 1973, effective November 24, 1973, 3 Pa.B. 2719; amended December 27, 1974, effective December 28, 1974, 4 Pa.B. 2699; amended August 22, 1975, effective August 23, 1975, 5 Pa.B. 2189; amended June 19, 1981, effective June 20, 1981, 11 Pa.B. 2116; amended March 26, 1982, effective March 27, 1982, 12 Pa.B. 1043; amended July 31, 2015, effective August 1, 2015, 45 Pa.B. 4163. Immediately preceding text appears at serial pages (268145) to (268146).

Cross References

   This section cited in 22 Pa. Code §  121.151 (relating to application of existing Agency regulations); 22 Pa. Code §  121.201 (relating to application of existing Agency regulations); 22 Pa. Code §  121.302 (relating to application of existing Agency regulations); and 22 Pa. Code §  121.401 (relating to application of existing agency regulations).

§ 121.5. Enrollment.

 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 this action.

Authority

   The provisions of this §  121.5 issued under the act of July 12, 1981 (P. L. 264, No. 89) (24 P. S. § §  5102.1 and 5104(1.2)); amended under section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. §  5104); sections 1 and 6(e) of the act of January 25, 1966 (P. L. 1546, No. 541) (24 P. S. § §  5151 and 5156(e)); 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).

Source

   The provisions of this §  121.5 adopted February 27, 1969; amended November 23, 1973, effective November 24, 1973, 3 Pa.B. 2719; amended May 21, 1976, effective May 22, 1976, 6 Pa.B. 2907; amended July 3, 1980, effective July 5, 1980, 10 Pa.B. 2874; amended August 7, 1981, effective August 8, 1981, 11 Pa.B. 2760; amended March 26, 1982, effective March 27, 1982, 12 Pa.B. 1043; amended July 12, 1996, effective July 13, 1996, 26 Pa.B. 3321; amended July 31, 2015, effective August 1, 2015, 45 Pa.B. 4163. Immediately preceding text appears at serial page (268146).

Cross References

   This section cited in 22 Pa. Code §  121.151 (relating to application of existing Agency regulations).

§ 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.

Authority

   The provisions of this §  121.6 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 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).

Source

   The provisions of this §  121.6 adopted March 24, 1972, effective March 25, 1972, 2 Pa.B. 506; amended November 10, 1978, effective November 11, 1978, 8 Pa.B. 3086; amended March 28, 1980, effective March 29, 1980, 10 Pa.B. 1385; amended September 21, 1984, effective September 22, 1984, 14 Pa.B. 3426; amended June 9, 1989, effective June 10, 1989, 19 Pa.B. 2428; amended July 12, 1996, effective July 13, 1996, 26 Pa.B. 3321. Immediately preceding text appears at serial pages (138267) to (138269).

Cross References

   This section cited in 22 Pa. Code §  121.151 (relating to application of existing Agency regulations); 22 Pa. Code §  121.201 (relating to application of existing Agency regulations); 22 Pa. Code §  121.302 (relating to application of existing Agency regulations); and 22 Pa. Code §  121.401 (relating to application of existing agency regulations).

§ 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 writing at the Agency offices in Harrisburg, and must include the following information:

   (1)  The name, address and PHEAA account 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.

Authority

   The provisions of this §  121.7 issued under act of July 12, 1981 (P. L. 264, No. 89) (24 P. S. § §  5102.1 and 5104(1.2)); amended under section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. §  5104); sections 1 and 6(e) of the act of January 25, 1966 (P. L. 1546, No. 541) (24 P. S. § §  5151 and 5156(e)); 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).

Source

   The provisions of this §  121.7 adopted March 24, 1972, effective March 25, 1972, 2 Pa.B. 506; amended November 23, 1973, effective November 24, 1973, 3 Pa.B. 2722; amended August 25, 1978, effective August 26, 1978, 8 Pa.B. 2338; amended August 7, 1981, effective August 8, 1981, 11 Pa.B. 2760; amended August 4, 2000, effective August 5, 2000, 30 Pa.B. 3924; amended July 31, 2015, effective August 1, 2015, 45 Pa.B. 4163. Immediately preceding text appears at serial pages (268148) to (268149).

Cross References

   This section cited in 22 Pa. Code §  121.4 (relating to denial of eligibility to loan defaulters); 22 Pa. Code §  121.53 (relating to forfeiture of award); 22 Pa. Code §  121.151 (relating to application of existing Agency regulations); 22 Pa. Code §  121.201 (relating to application of existing Agency regulations); 22 Pa. Code §  121.302 (relating to application of existing Agency regulations); and 22 Pa. Code §  121.401 (relating to application of existing agency regulations).

§ 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 of Directors.

 (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)  Any written notice that may reasonably be construed as a request for an appeal, delivered or mailed to PHEAA’s Office of General Counsel within the prescribed 15-day appeal period, advising that the applicant or recipient is aggrieved and requests a review of the determination denying him financial assistance, will be deemed to initiate and constitute an appeal. The date of initiation of an appeal delivered by mail will be determined from the postmark appearing upon the envelope in which the 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.

 

Authority

   The provisions of this §  121.8 issued 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); sections 3 and 4(1.2) of the act of July 12, 1981 (P. L. 264, No. 89) (24 P. S. § §  5102.1 and 5104(1.2)); amended under section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. §  5104); sections 1 and 6(e) of the act of January 25, 1966 (P. L. 1546, No. 541) (24 P. S. § §  5151 and 5156(e)); 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).

Source

   The provisions of this §  121.8 adopted March 24, 1972, effective March 25, 1972, 2 Pa.B. 506; amended May 21, 1976, effective May 22, 1976, 6 Pa.B. 1134; amended August 25, 1978, effective August 26, 1978, 8 Pa.B. 2338; amended August 7, 1981, effective August 8, 1981, 11 Pa.B. 2760; amended February 22, 1985, effective February 23, 1985, 15 Pa.B. 670; amended August 4, 2000, effective August 5, 2000, 30 Pa.B. 3924; amended July 31, 2015, effective August 1, 2015, 45 Pa.B. 4163. Immediately preceding text appears at serial pages (268149) to (268151).

Cross References

   This section cited in 22 Pa. Code §  121.4 (relating to denial of eligibility to loan defaulters); 22 Pa. Code §  121.53 (relating to forfeiture of award); and 22 Pa. Code §  121.151 (relating to application of existing Agency regulations); 22 Pa. Code §  121.201 (relating to application of existing Agency regulations); 22 Pa. Code §  121.302 (relating to application of existing Agency regulations); and 22 Pa. Code §  121.401 (relating to application of existing agency regulations).

§ 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).

Authority

   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).

Source

   The provisions of this §  121.9 adopted February 11, 1983, effective February 12, 1983, 13 Pa.B. 704; amended February 22, 1985, effective February 23, 1985, 15 Pa.B. 670; amended October 4, 1991, effective October 5, 1991, 21 Pa.B. 4637; amended August 4, 2000, effective August 5, 2000, 30 Pa.B. 3924. Immediately preceding text appears at serial pages (218127) to (218130).

§ 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).

Authority

   The provisions of this §  121.10 issued 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).

Source

   The provisions of this §  121.10 adopted August 4, 2000, effective August 5, 2000, 30 Pa.B. 3924.

§ 121.11. [Reserved].

Source

   The provisions of this §  121.11 adopted February 27, 1969; reserved February 16, 1973, effective February 17, 1973, 3 Pa.B. 325. Immediately preceding text appears at serial page (3237).

§ 121.12. [Reserved].

Source

   The provisions of this §  121.12 adopted February 27, 1969; reserved February 16, 1973, effective February 17, 1973, 3 Pa.B. 325. Immediately preceding text appears at serial page (3237).

§ 121.13. [Reserved].

Source

   The provisions of this §  121.13 adopted February 27, 1969; reserved February 16, 1973, effective February 17, 1973, 3 Pa.B. 325. Immediately preceding text appears at serial page (3238).

§ 121.14. [Reserved].

Source

   The provisions of this §  121.14 adopted February 27, 1969; reserved February 16, 1973, effective February 17, 1973, 3 Pa.B. 325. Immediately preceding text appears at serial page (3238).

§ 121.15. [Reserved].

Source

   The provisions of this §  121.15 adopted February 27, 1969; reserved February 16, 1973, effective February 17, 1973, 3 Pa.B. 325. Immediately preceding text appears at serial page (3238).

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 or other State-issued general equivalency diplomas.

 (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 Pennsylvania 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 secondary schools 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 Pennsylvania 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.

Authority

   The provisions of this §  121.21 amended under section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. §  5104); sections 1 and 6(e) of the act of January 25, 1966 (P. L. 1546, No. 541) (24 P. S. § §  5151 and 5156(e)); 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).

Source

   The provisions of this §  121.21 adopted February 27, 1969; amended November 23, 1973, effective November 24, 1973, 3 Pa.B. 2719; amended December 27, 1974, effective December 28, 1974, 4 Pa.B. 2699; amended August 4, 2000, effective August 5, 2000, 30 Pa.B. 3924; amended July 31, 2015, effective August 1, 2015, 45 Pa.B. 4163. Immediately preceding text appears at serial page (268159).

Cross References

   This section cited in 22 Pa. Code §  121.151 (relating to application of existing Agency regulations).

§ 121.22. Early admission students.

 Student applicants who leave a State approved secondary school prior to their senior year and are admitted for the academic year or a portion thereof, immediately following their secondary school studies, to an approved institution of higher learning as early admission students shall be considered as first-year collegiate applicants and in compliance with the secondary school graduation requirement for purposes of State higher education grant eligibility if the school district of the school that the applicant had attended certified that:

   (1)  The applicant left senior high school in accordance with policies and procedures previously established by the superintendent and the board of school directors to attend an approved institution of higher learning.

   (2)  The high school diploma will be awarded upon the applicant’s successful completion of the requirements set forth by the local board of school directors.

Authority

   The provisions of this §  121.22 amended under the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. §  5104); sections 1 and 6(e) of the act of January 25, 1966 (P. L. 1546, No. 541) (24 P. S. § §  5151 and 5156(e)); the act of October 11, 1972 (P. L. 899, No. 213) (24 P. S. §  5161); the act of October 11, 1972 (P. L. 909, No. 216) (24 P. S. §  5171); and The Institutional Assistance Grants Act (24 P. S. § §  5181—5190).

Source

   The provisions of this §  121.22 adopted February 27, 1969; amended December 27, 1974, effective December 28, 1974, 4 Pa.B. 2699; amended May 21, 1976, effective May 22, 1976, 6 Pa.B. 1134; amended July 29, 1977, effective July 30, 1977, 7 Pa.B. 2137; amended December 7, 1990, effective December 8, 1990, 20 Pa.B. 6044; amended July 31, 2015, effective August 1, 2015, 45 Pa.B. 4163. Immediately preceding text appears at serial pages (268159) to (268160).

Cross References

   This section cited in 22 Pa. Code §  121.151 (relating to application of existing Agency regulations).

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.

Authority

   The provisions of this §  121.31 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 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).

Source

   The provisions of this §  121.31 adopted February 27, 1969; amended June 2, 1978, effective June 3, 1978, 8 Pa.B. 1532; amended July 3, 1980, effective July 5, 1980, 10 Pa.B. 2874; amended August 7, 1981, effective August 8, 1981, 11 Pa.B. 2760; amended March 26, 1982, effective March 27, 1982, 12 Pa.B. 1043; amended January 16, 1987, effective January 17, 1987, 17 Pa.B. 249; amended October 16, 1987, effective October 17, 1987, 17 Pa.B. 4120; amended July 12, 1996, effective July 13, 1996, 26 Pa.B. 3321. Immediately preceding text appears at serial pages (161808) to (161810).

Cross References

   This section cited in 22 Pa. Code §  121.1 (relating to definitions).

§ 121.32. Approved institution in higher education grant program.

 (a)  To be eligible for a State higher education grant, an applicant shall enroll in a program approved under §  121.33 (relating to approved program of study in higher education grant program) and shall attend an institution of higher education approved by the Agency for enrollment of grant recipients under the State Higher Education Grant Program

 (b)  To be approved, an institution shall be other than a school of theology or a theological seminary as determined by the Agency, be located in the United States or any of its territories and comply with the following:

   (1)  If the institution is a college or university located within this Commonwealth, the institution shall be approved by the Pennsylvania Department of Education and shall be accredited or a recognized candidate for accreditation with an accrediting body recognized by the United States Department of Education or the Council for Higher Education Accreditation and its successors; if the college or university is located outside this Commonwealth, the institution shall be degree-granting, shall be operated not-for-profit, shall be legally authorized to do business by the appropriate state licensing or approval authority in the state in which it is doing business and shall be fully accredited by an accrediting body recognized by the United States Department of Education or the regional institutional accrediting body recognized by the Council for Higher Education Accreditation and its successors responsible for accreditation in the state where the college or university is conducting its educational program.

   (2)  If the institution is a hospital school of nursing located within this Commonwealth, the institution shall be initially, provisionally or fully approved by the Pennsylvania State Board of Nursing and shall be accredited by the National League for Nursing Accrediting Commission, the Commission on Collegiate Nursing Education or other accrediting body recognized by the United States Department of Education for the accreditation of nursing schools; if located outside this Commonwealth, the institution shall be legally authorized to do business by the appropriate state licensing or approval authority in the state in which it is doing business and shall be accredited by the National League for Nursing Accrediting Commission, the Commission on Collegiate Nursing Education or any other accrediting body recognized by the United States Department of Education for the accreditation of nursing schools.

   (3)  If the institution is a trade, technical or business school located within this Commonwealth, the institution shall be approved by the Pennsylvania Department of Education or shall currently be, and shall have been throughout the preceding 24 months, licensed by the Pennsylvania State Board of Private Licensed Schools and shall be accredited by an accrediting body recognized by the United States Department of Education or the Council for Higher Education Accreditation and its successors, except that this requirement for licensure and accreditation may be waived by the President and Chief Executive Officer for branch campuses of an institution that have been operating satisfactorily in this Commonwealth for 2 years or more; if the institution is located outside this Commonwealth, it shall be degree-granting, shall be operated not-for-profit and shall be fully accredited by the United States Department of Education or the regional institutional accrediting body recognized by the Council for Higher Education Accreditation and its successors responsible for accreditation in the state where the institution is conducting its educational program.

   (4)  The institution shall have executed an Assurance of Compliance with section 602 of the Civil Rights Act of 1964 (42 U.S.C.A. §  2000d-1 (1974)) and filed it with the United States Secretary of Education.

   (5)  The institution shall have executed and filed with the Agency an agreement on a form provided by the Agency to report or advise the Agency if the institution has knowledge of the name and address of Commonwealth resident students who are recipients of Agency-administered aid who have been convicted in a court of record of a 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 or facts known to persons occupying positions of authority such as the dean of students, director of financial aid or president of the institution.

   (6)  When a change in ownership of an approved institution occurs, the new owner shall notify the Agency in writing of the change in ownership within 30 days of the effective date of the change. The new owner shall execute and file with the Agency an agreement on a form provided by the Agency to assume responsibility for repayment of State grant funds to the Agency or payment of State grant funds to eligible students, as designated by the Agency, made necessary by the failure of the previous owner to follow Agency procedures and requirements. An institution that fails to execute this agreement will be required to wait 24 months before being considered for approval in the State Grant Program.

   (7)  The institution shall comply with other administrative requirements as the Agency may legally promulgate, as shall be set forth in the State Grant Certification Procedures and the State Grant Program Policy Manual which will be made available to institutions on an annual basis.

 (c)  Approved institutions for an academic year shall be those on record as of the preceding August 1 for the ensuing academic year.

 (d)  Approval of an institution after August 1 will become effective the following August 1 with two exceptions:

   (1)   To be effective for the ensuing summer term, approval shall be obtained prior to May 1.

   (2)  In the light of the particular circumstances related to the institution’s approval and the funding and application processing conditions of the Agency, the President and Chief Executive Officer may make the approval effective on a date prior to August 1.

 (e)  The President and Chief Executive Officer may suspend the processing of aid request forms of State grant applicants or cease further disbursement of State grant funds to an approved institution, or both, when, in the judgment of the President and Chief Executive Officer, the institution’s compliance with the conditions required for approval or the institution’s continued eligibility or operation is in question and the action is deemed necessary to protect the interests of the student aid applicants, the Commonwealth or the Agency. This subsection may also be invoked upon a change in ownership, administration or directorship of the institution.

 (f)  An institution’s approved status may be terminated by the President and Chief Executive Officer when any of the conditions required for approval cease to be met.

 (g)  In suspending or withdrawing the approval of an institution, the President and Chief Executive Officer may authorize continuation of eligibility determination and grant disbursement for State grant renewal applicants.

Authority

   The provisions of this §  121.32 amended under section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. §  5104); sections 1 and 6(e) of the act of January 25, 1966 (P. L. 1546, No. 541) (24 P. S. § §  5151 and 5156(e)); 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).

Source

   The provisions of this §  121.32 adopted November 23, 1973, effective November 24, 1973, 3 Pa.B. 2719; amended October 28, 1977, effective October 29, 1977, 7 Pa.B. 3195; amended June 2, 1978, effective June 3, 1978, 8 Pa.B. 1532; amended June 7, 1985, effective June 8, 1985, 15 Pa.B. 2102; amended November 1, 1985, effective November 2, 1985, 15 Pa.B. 3933; amended September 4, 1987, effective September 5, 1987, 17 Pa.B. 3600; amended October 16, 1987, effective October 17, 1987, 17 Pa.B. 4120; amended October 4, 1991, effective October 5, 1991, 21 Pa.B. 4637; amended July 12, 1996, effective July 13, 1996, 26 Pa.B. 3321; amended August 4, 2000, effective August 5, 2000, 30 Pa.B. 3924; amended July 31, 2015, effective August 1, 2015, 45 Pa.B. 4163. Immediately preceding text appears at serial pages (268167) to (268168) and (269161).

Cross References

   This section cited in 22 Pa. Code §  121.33 (relating to approved program of study in higher education grant program); and 22 Pa. Code §  121.151 (relating to application of existing Agency regulations).

§ 121.33. Approved program of study in higher education grant program.

 To be eligible for a State higher education grant, an applicant shall enroll in a program of study approved by the Agency and offered by an institution approved by the Agency under §  121.32 (relating to approved institution in higher education grant program) for participation in the State Higher Education Grant Program. An approved program of study shall comply with the following:

   (1)  An approved program of study shall be a program of instruction of at least 2 academic years which shall be the equivalent of at least 60 semester credit hours or at least 1,800 clock hours of instruction (1,500 clock hours in the case of programs leading to the associate degree in specialized technology or the associate degree in specialized business offered by institutions of higher education located within this Commonwealth) except that, other than for those community college programs which are measured in credit hours, programs not leading to a degree shall be measured in clock hours, with at least 30 semester credit hours or 900 clock hours earned through instruction within the classroom, and shall be presented over a calendar of at least 15 months.

   (2)  An approved program of study shall require that at least 50% of the credits needed for completion of the program at the approved institution be earned through instruction within the classroom.

   (3)  If offered at a trade, technical or business school located within this Commonwealth, an approved program of study shall be approved by the Pennsylvania Department of Education or by the Pennsylvania State Board of Private Licensed Schools.

   (4)  An approved program of study shall be on the approved list as of August 1 for the ensuing academic year. Approval after August 1 will become effective the following August 1 with two exceptions:

     (i)   To be effective for the ensuing summer term, approval must be obtained prior to May 1.

     (ii)   In the light of the particular circumstances related to the approval of the program of study and the funding and application processing conditions of the Agency, the President and Chief Executive Officer may make the approval effective on a date prior to August 1.

Authority

   The provisions of this §  121.33 issued 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); section 1 of the act of October 11, 1972 (P. L. 899, No. 213) (24 P. S. §  5161); and section 1 of the act of October 11, 1972 (P. L. 909, No. 216) (24 P. S. §  5171); amended under section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. §  5104); sections 1 and 6(e) of the act of January 25, 1966 (P. L. 1546, No. 541) (24 P. S. § §  5151 and 5156(e)); 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).

Source

   The provisions of this §  121.33 adopted March 24, 1972, effective March 25, 1972, 2 Pa.B. 506; amended August 22, 1975, effective August 23, 1975, 5 Pa.B. 2189; amended October 28, 1977, effective October 29, 1977, 7 Pa.B. 3195; amended March 31, 1978, effective April 1, 1978, 8 Pa.B. 832; amended March 30, 1979, effective March 31, 1979, 9 Pa.B. 1128; amended March 11, 1983, effective March 12, 1983, 13 Pa.B. 975; amended June 7, 1985, effective June 8, 1985, 15 Pa.B. 2102; amended October 16, 1987, effective October 17, 1987, 17 Pa.B. 4120; amended June 9, 1989, effective June 10, 1989, 19 Pa.B. 2428; amended August 4, 2000, effective August 5, 2000, 30 Pa.B. 3924; amended July 31, 2015, effective August 1, 2015, 45 Pa.B. 4163. Immediately preceding text appears at serial pages (269161) to (269162).

Cross References

   This section cited in 22 Pa. Code §  121.32 (relating to approved institutions in higher education grant program); and 22 Pa. Code §  121.151 (relating to application of existing Agency regulations).

§ 121.34. Institutional appeals and hearings (for other than the Federal Family Education Loan Programs).

 (a)  If the President and Chief Executive Officer suspends the processing of student aid request forms for students at an approved institution or ceases disbursement of funds to an approved institution, the institution will be notified in writing of the action and the grounds therefor and will be afforded an opportunity to contend to the Agency that the processing of aid request forms or disbursement of funds should be resumed and to submit relevant data in support of this contention.

 (b)  If the President and Chief Executive Officer of the Agency determines that an institution is not an eligible institution within the meaning of this chapter for a program administered by the Agency, the institution will be notified in writing of the determination, the grounds therefor and its right to appeal from the decision.

 (c)  An institution which is aggrieved by the determination of the President and Chief Executive Officer that it is not an eligible institution may file an appeal of that determination to the Board. This subsection supersedes 1 Pa. Code §  35.20 (relating to appeals from actions of the staff).

 (d)  An appeal shall be filed on or before the 15th day after the date on which notification of the determination by which the institution was aggrieved was mailed to it at its post office address registered with the Agency.

 (e)  The appeal may be heard by the Board or, at its direction, by a hearing examiner appointed by the Chairperson of the Board or, in the event of the unavailability of the Chairperson, by the Vice Chairperson of the Board, from a list maintained by the President and Chief Executive Officer. The hearing examiner or the Board will schedule the appeal for hearing within 30 days from the date on which the appeal is filed and will give the institution at least 7 days’ notice of the hearing. The notice will specify the date, hour and place of hearing.

 (f)  Hearings will be held at the offices of the Agency in Harrisburg, Pennsylvania. During the hearing, the institution will be given the opportunity to submit relevant evidence in support of its contentions. The institution shall also have the right to present oral and written argument and to cross-examine witnesses which are offered by the Agency. This subsection supplements 1 Pa. Code §  35.126 (relating to presentation by the parties).

 (g)  The hearing examiner or the Board will prepare or cause the preparation of a verbatim transcript of the hearing. When the appeal is heard by a hearing examiner, findings of fact and conclusions of law shall also be prepared, and the transcript, findings and conclusions shall be forwarded directly to the Board for review and a final decision by the Board. This subsection supplements 1 Pa. Code §  35.131 (relating to recording of proceedings) and supersedes 1 Pa. Code §  35.202 (relating to proceedings in which proposed reports are prepared).

 (h)  The Board will make an order or determination as shall appear just and proper from all the evidence submitted. Notice of the decision of the Board will be mailed promptly to the institution at the post office address which is registered with the Agency.

 (i)  The decision of the Board will become final 10 days after the date thereof. Within 30 days after the decision of the Board becomes final, the institution may file an appeal therefrom with Commonwealth Court.

Authority

   The provisions of this §  121.34 issued 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); and sections 3 and 4(1.2) of the act of July 12, 1981 (P. L. 264, No. 89) (24 P. S. § §  5102.1 and 5104(1.2)); 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 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).

Source

   The provisions of this §  121.34 adopted October 28, 1977, effective October 29, 1977, 7 Pa.B. 3195; amended August 7, 1981, effective August 8, 1981, 11 Pa.B. 2760; amended February 22, 1985, effective February 23, 1985, 15 Pa.B. 670; amended October 16, 1987, effective October 17, 1987, 17 Pa.B. 4120; amended October 4, 1991, effective October 5, 1991, 21 Pa.B. 4637; amended July 12, 1996, effective July 13, 1996, 26 Pa.B. 3321. Immediately preceding text appears at serial pages (161814) to (161816).

Cross References

   This section cited in 22 Pa. Code §  121.151 (relating to application of existing Agency regulations).

§ 121.35. Payment of interest on Federal Stafford Loans and Federal PLUS Loans.

 (a)  The Agency will require an educational institution to repay to the appropriate lending institution the interest that has accrued on Federal Stafford Loan or Federal PLUS Loan funds under the following circumstances:

   (1)  A borrower receives loan assistance for which he is not eligible because of the educational institution’s negligent or willful false certification of a student’s loan eligibility.

   (2)  If the educational institution violates State or Federal regulations in its release of Federal Stafford Loan or Federal PLUS Loan funds to a borrower.

   (3)  If the educational institution is required to make a loan refund as specified in Federal regulations and does not make the refund within the time frame specified in the regulations.

 (b)  The interest amount that the Agency will require to be repaid under the circumstances described in subsection (a) will be based on the maximum interest rate allowed under Federal law governing the particular loan and will be calculated over the following time periods:

   (1)  For the condition described in subsection (a)(1), from the date of disbursement of the loan funds until the date the ineligible principal portion is repaid.

   (2)  For the condition described in subsection (a)(2), from the date of release of the loan funds until the date the principal portion of the loan funds in question is repaid.

   (3)  For the condition described in subsection (a)(3), from the latest date, as specified in Federal regulations, that a refund should have been made until the date the refund actually is made.

 (c)  Educational institutions required to pay interest will receive written notice as to the reason the interest is owed and the amount to be remitted to the Agency. The educational institution will have a maximum of 60 days from the date of the written notice to respond to the Agency.

 (d)  Failure of the educational institution to respond to the notice specified in subsection (c) or to repay the particular interest amount requested will lead the Agency to refer the case to the United States Secretary of Education for further enforcement action.

Authority

   The provisions of this §  121.35 issued under section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. §  5104); 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 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).

Source

   The provisions of this §  121.35 adopted July 22, 1988, effective July 23, 1988, 18 Pa.B. 3208; amended July 12, 1996, effective July 13, 1996, 26 Pa.B. 3321. Immediately preceding text appears at serial pages (161816) to (161817).

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