[Code of Federal Regulations]
[Title 34, Volume 3]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 34CFR682.704]

[Page 804-805]
 
                           TITLE 34--EDUCATION
 
                         DEPARTMENT OF EDUCATION
 
PART 682--FEDERAL FAMILY EDUCATION LOAN (FFEL) PROGRAM--Table of Contents
 
  Subpart G--Limitation, Suspension, or Termination of Lender or Third-
 party Servicer Eligibility and Disqualification of Lenders and Schools
 
Sec. 682.704  Emergency action.

    (a) The Secretary, or a designated Departmental official, may take 
emergency action to stop the issuance of guarantee commitments by the 
Secretary and guarantee agencies and to withhold payment of interest 
benefits and special allowance to a lender if the Secretary--
    (1) Receives reliable information that the lender or a third-party 
servicer with which the lender contracts is in violation of applicable 
laws, regulations, special arrangements, agreements, or limitations 
entered into under the authority of statutes applicable to Title IV of 
the HEA pertaining to the lender's portfolio of loans;
    (2) Determines that immediate action is necessary to prevent the 
likelihood of substantial losses by the Federal Government, parent 
borrowers, or students; and
    (3) Determines that the likelihood of loss exceeds the importance of 
following the procedures for limitation, suspension, or termination.
    (b) The Secretary begins an emergency action by notifying the lender 
or third-party servicer, by certified mail, return receipt requested, of 
the action and the basis for the action.
    (c) The action becomes effective on the date the notice is mailed to 
the lender or third-party servicer.
    (d)(1) An emergency action does not exceed 30 days unless a 
limitation, suspension, or termination proceeding is begun before that 
time expires.
    (2) If a limitation, suspension, or termination proceeding is begun 
before the expiration of the 30-day period--
    (i) The emergency action may be extended until completion of the 
proceeding, including any appeal to the Secretary; and

[[Page 805]]

    (ii) Upon the written request of the lender or third-party servicer, 
the Secretary may provide the lender or servicer with an opportunity to 
demonstrate that the emergency action is unwarranted.

(Authority: 20 U.S.C. 1080, 1082, 1085, 1094)

[57 FR 60323, Dec. 18, 1992, as amended at 59 FR 22457, Apr. 29, 1994]