Tenn. Comp. R. & Regs. 1640-01-17-.06 - COLLECTIONS
(1) Due diligence requirements shall consist
of the following:
(a) Provide the recipient
with a signed copy of the promissory note.
(b) Notify the recipient of the repayment
requirements during the grace period.
(c) Notify the recipient of repayment
requirements during an approved period of deferment.
(d) Attempt to contact the recipient on no
less than three separate occasions during the two hundred and seventy (270) day
period in which no payments are received, beginning with the thirtieth (30th)
day of delinquency and subsequent contacts no less than ninety (90) days
apart.
(2) TSAC's
collection activity will begin when the recipient is no longer honoring the
repayment obligation. TSAC will exercise due diligence to contact the student
to resolve the delinquency.
(3)
TSAC will consider a recipient to be delinquent if the recipient fails to make
an installment payment within thirty (30) days of the due date. Upon
delinquency, TSAC will attempt to contact the recipient to give notice of the
delinquency, inform the recipient of the consequences of default, and encourage
the recipient to make payments as provided under the promissory note.
(4) TSAC will consider a recipient to be in
default if the recipient fails make a payment for a period of two hundred
seventy (270) consecutive days.
(5)
Once the recipient is in default, TSAC may take one or more of the following
actions:
(a) Assign the defaulted loan(s) to a
collection agency.
1. Collection costs may be
added to the defaulted loan at a rate not to exceed twenty (20%) of the
original principal balance. Payments on the combined principal, interest, and
collection costs shall not exceed an amount determined to be reasonable and
affordable.
(b) Report
to credit bureaus the default status of each loan.
(c) Make the student ineligible for state
student aid programs.
(d) Submit an
order of suspension, denial, or revocation to the appropriate licensing board
for any Tennessee-issued professional license held by the recipient.
Notes
Authority: T.C.A. ยงยง 49-4-201, 49-4-204, and 49-4-212.
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