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JAN 1 3 1994
To: Schools, Lenders and Holders Participating in the Health Education Assistance Loan (HEAL) Program
Subject: HEAL Final Regulatory
Amendments Published December 21, 1993
Lender Policy Memorandum L-94-5
School Policy Memorandum S-94-5
Attached are amendments to the HEAL regulations that were published in the Federal Register on December 21, 1993 (58 FR 67346), and became effective upon publication. This rule amends the HEAL regulations as follows:
(1) Requires the lender to report a borrower's HEAL indebtedness to one or more national credit bureaus within 120 days of the date the final disbursement on the loan is made (42 CFR 60.33(h));
(2) Requires the Secretary to provide a lender, holder, or school with the opportunity for a hearing, in accordance with specified procedures, prior to terminating the lender's, holder's, or school's participation in the HEAL program (42 CFR 60.43 and 60.60);
(3) Authorizes a school to withhold services from a HEAL borrower who is in default on a HEAL loan received while enrolled in that school, except in instances where the borrower has filed for bankruptcy. Such services may include, but are not limited to, academic transcripts and alumni services (42 CFR 60.61(d));
(4) Requires that all academic and financial aid transcripts that are released on a defaulted HEAL borrower must indicate on the transcript that the borrower is in default on a HEAL loan (42 CFR 60.61(d));
(5) Stipulates that a defaulted HEAL borrower who satisfactorily resolves the default is responsible for providing evidence of such to the school, in order to have services restored or the reference to default removed from the transcripts (42 CFR 60.61(d)); and
Stipulates that a defaulted HEAL borrower who has filed for bankruptcy is responsible for providing the school with court documentation that verifies the filing for bankruptcy, upon the request of the school, in order to be exempt from having services withheld (42 CFR 60.61(d)).
Please contact the HEAL Branch at 301 443-1540 if you have any questions on these regulatory amendments.
Michael Heningburg
Director
Division of Student Assistance
