 |
|
|
|
|
|
|
|
 |
|
||||||
 |
 |
 |
 |
 |
|
||
 |
|
||||||
 |
|
||||||
 |
|
||||||
 |
||
 |
||
 |
||
|
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
October 5, 2005
To: Lenders and Holders Participating in the Health Education Assistance Loan (HEAL) Program
Subject: Updated Payment
of "Low Balance" Claims
HEAL Lender Policy Memorandum L-2006-1
We recently reviewed and changed the policy to pay low balance default claims without requiring litigation. This policy L-2006-1 supercedes our previous low balance policy, L-1993-2. We increased the outstanding balance limit from $300 to $1,000 and removed the reference to the limited amount of interest accrual being part of the outstanding balance. Also eliminated is the case-by-case review of borrowers who did not make regular payments. This revised policy now defines low balance claims as those where a borrower does not completely pay-in-full his or her account in a lump sum payment and an outstanding balance less than $1,000 remains on the account.
The Department will pay default claims without a judgment where an outstanding balance of less than $1,000 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.
If you have questions concerning this policy, please call Mr. Dick Horton on (301) 443-1541.
Sincerely,
Henry López, Jr.
Director
Division of Health Careers Diversity and Development
