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Setup Instructions |
NOV 2 1992
TO: Lenders/Holders Participating in the Health Education Assistance Loan (HEAL) Program
SUBJECT: Payment of "Low
Balance" Claims
HEAL Lender Policy Memorandum #93-2
We have recently reviewed and changed the policy to pay low balance default claims without requiring litigation. These claims result when a borrower does not completely pay-in-full his or her account in a lump sum payment and an outstanding balance less than $300 remains on the account, due to interest accrual of a few days.
The Department will pay default claims without a judgment where an outstanding balance of less than $300 remains on an account. However, the Department will require that documentation be provided indicating that the lender/holder has made a "good faith" effort to collect these remaining balances from the borrower. In this case, a "good faith" effort is a complete, clearly documented, due diligence cycle.
On accounts with balances less than $1,000 where borrowers have made regular payments but did not completely pay the account in-full, the Department will review each account on a case-by-case basis. The lenders/holders will be informed of the Department's review and decision. As above, documentation must be provided showing a "good faith" effort to collect these balances.
If you have questions concerning this policy, please call Mr. John Haczewski on (301) 443-0603. Thank you.
Sincerely,
Michael Heningburg
Director
Division of Student Assistance
