20 AAC 15.745. Loan servicing and repayment

(a) Except as otherwise specified in AS 14.43.170 - 14.43.175 and 20 AAC 15.700 - 20 AAC 15.795, ASEL loans will be serviced in conformity with 34 C.F.R. 682.208 and 682.209, to maximize administrative efficiency for the borrower and the commission.

(b) The repayment period begins the day after completion of six months from the last date on which the borrower was enrolled on at least a half-time basis in an eligible program, with a first payment due within 45 days after the first day of the repayment period.

(c) The commission may establish a forbearance, a deferment, or an alternative repayment schedule with a borrower or endorser to assist a borrower or endorser in repaying the loan.

(d) The regular repayment period is ten years in duration with a repayment schedule that provides for equal or graduated payments.

(e) The commission may establish a repayment schedule that provides for the payment amounts to change as a result of the annual change in variable interest rate. If the effect of the interest rate change on the repayment schedule would result in a loan not being repaid in the maximum repayment term, the commission may provide the borrower with a forbearance extending the repayment period.

(f) A borrower's obligation to commence repayment under AS 14.43.175 is also the obligation of any endorser, and

(1) begins when the borrower's obligation begins;

(2) is deferred while the borrower's obligation is deferred;

(3) continues even if the borrower's obligation to repay the loan is discharged or canceled before the loan is paid in full, and even if the discharge or cancellation occurs due to the death or disability of the borrower; and

(4) continues even if the borrower's obligation to repay the loan is determined to have been discharged in bankruptcy unless the endorser's obligation to repay the loan has also been determined to have been discharged in the endorser's bankruptcy.

(g) The commission will credit the entire payment amount first to accrued late charges or collection costs and then to any outstanding interest and then to outstanding principal.

(h) A minimum monthly payment amount must be at least $50, unless otherwise agreed to by the borrower or endorser and the commission.

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

Authority: AS 14.42.030

AS 14.43.171

AS 14.43.175

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