Section 1640-01-13-.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 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.Tenn. Comp. R. & Regs. 1640-01-13-.06
Original rule filed March 1, 2013; effective August 29, 2013.Authority: T.C.A. §§ 49-4-201, 49-4-204, and 49-4-706.