Title 20 . Miscellaneous Boards and Commissions

Chapter 15 . Mental Health Trust Authority

Section 705. Applicant eligibility

20 AAC 15.705. Applicant eligibility

(a) A borrower of an Alaska supplemental education loan (ASEL) must meet the eligibility requirements of as 14.43.172 and 14.43.173 and

(1) must be enrolled and admitted into an eligible program of study on at least a half-time basis;

(2) must maintain satisfactory academic progress as determined by the school's policy;

(3) may not be in default on any federal or state education loan; and

(4) if the individual is eligible to participate in the AlaskAdvantage loan program based solely on the individual's status as a resident of this state, during periods of absence from this state under AS 14.43.162 (c), must have, and must demonstrate behavior consistent with, a continuing intent to return to and remain permanently in this state.

(b) The commission staff may perform a credit history check on each loan applicant and endorser.

(c) An absence of credit history will not be considered adverse credit for an applicant. However, an endorser must have a credit history that demonstrates good credit and current employment. For purposes of this section, an endorser will be considered to have good credit if the endorser has a FICO credit report score of 700 or more.

(d) Unless, through an appeal made under (f) of this section, extraordinary circumstances are determined to have existed, the applicant will be considered to have an adverse credit history, learned through a credit check or otherwise, and the loan applicant may obtain the loan only in compliance with AS 14.43.172 (e), if one or more of the following occurred within the preceding five years:

(1) two or more credit accounts report that payments are currently three months or more past due;

(2) liens for delinquent taxes are not satisfied within 24 months, unless disputed or a dispute is pending;

(3) two or more references of an account have been made to a credit collection agency, if the total of those accounts exceeds $100.

(e) For the purposes of AS 14.43.172 (c)(5), a person has defaulted on a loan if one or more of the following has occurred:

(1) foreclosure upon or repossession of collateral for a loan or installment contract;

(2) an entry of judgment accelerating the amount due under a loan or installment contract;

(3) the discharge by a creditor of a debt or installment contract due to nonpayment on a balance greater than $250.

(f) In an appeal of a denial of loan eligibility under AS 14.43.172 (c)(5) or (6), the appellant may request that evidence of prior credit performance, in addition to that considered under this section, be considered to mitigate the findings of the review of the applicant's credit history. The appellant must be able to show that extraordinary circumstances beyond the applicant's control led to the adverse credit history and that the applicant made good faith efforts to pay the past debt, or that the credit history does not accurately reflect the appellant's ability or willingness to pay debts as they become due. If the appellant bases the appeal on the showing of extraordinary circumstances that led to the adverse credit history, the appellant has the burden to show that a good credit history existed before the extraordinary circumstances.

(g) For purposes of AS 14.43.172 (e), an endorser's bankruptcy may be considered adverse credit.

(h) For the purposes of AS 14.43.172 (c)(4), it is presumed that a person cannot repay a loan as it becomes due, and may only obtain a loan in compliance with AS 14.43.172 (e), if the person

(1) is incarcerated at the time funds are disbursed or delivered; or

(2) is permanently disabled to an extent that the person will not be able to receive income in an amount that would allow repayment of the loan, and there is no reasonable medical possibility that the condition of permanent disability will improve before the loan enters repayment.

(i) In an appeal of a denial of loan eligibility under AS 14.43.172 (b), the appellant may provide evidence that demonstrates that an absence from this state in excess of the period allowable under applicable state law was not inconsistent with an intent to return and indefinitely reside in this state.

History: Eff. 7/1/2002, Register 162; am 12/31/2005, Register 176

Authority: AS 14.42.030

AS 14.43.172

Editor's note: As of Register 172 (January 2005), and acting under AS 44.62.125 (b)(6) and sec. 34, ch. 63, SLA 2004, the regulations attorney made technical changes to reflect the name change of the Alaska advantage loan program to the AlaskAdvantage loan program made by secs. 10, 13, and 28, ch. 63, SLA 2004.