20 AAC 15.920. Medical cancellations

(a) Notwithstanding 20 AAC 15.915, an application to cancel a promissory note under a term of the promissory note permitting cancellation for medical disability is governed by this section.

(b) A borrower seeking cancellation of a loan due to medical disability may not obtain cancellation of the borrower's obligation if the borrower has sufficient income or financial resources to repay the loan. A request for consideration of cancellation must be submitted on a form provided by the commission. A physician who practices within the medical field covering the disability, who has examined the borrower within the prior 12 months, and who is licensed to practice medicine in the state where the examination took place, must certify that after the date the borrower last obtained an Alaska education loan that the borrower

(1) became permanently disabled to the extent required under the particular promissory note to obtain cancellation of the note; and

(2) as a result of the disability became unable for an indefinite period of time to be gainfully employed or attend school full-time.

(c) If the borrower had a pre-existing condition at the time that the borrower obtained an Alaska education loan, the physician must additionally certify that the condition has substantially deteriorated since the time that the borrower obtained the loan.

(d) The commission staff may request further documentation to support medical cancellation of a promissory note, including financial information from the borrower in order to make a determination of the borrower's financial capacity to repay the loan. The executive director shall make a determination in writing whether to grant a request for medical cancellation.

(e) Within 30 days after mailing or distribution of the executive director's decision, the borrower may appeal a decision denying medical cancellation to a hearing officer designated by the commission. At the hearing conducted by the hearing officer, the borrower has the burden to prove by a preponderance of the evidence, including disclosure of the borrower's financial condition and testimony by a qualified physician, that the borrower is disabled to the extent allowing cancellation of the promissory note under the terms of the promissory note, and is unable to repay the loan obligation without undue financial hardship based on the borrower's income, assets, and living expenses. If the borrower produces documentation to a hearing officer not already part of the record upon which the executive director's determination was based, the matter will be remanded to the executive director for review and reconsideration. If the borrower submits new evidence, the executive director shall make a determination in writing whether to grant a medical cancellation. The borrower may appeal the decision on remand within 30 days after the decision is mailed in accordance with this section. The hearing officer shall make a determination in writing, including findings of fact and conclusions of law. The commission will review the materials reviewed by the hearing officer, the hearing officer's decision, and the record on appeal and will accept, reject, or revise the hearing officer's decision. The commission's decision constitutes the final agency action.

(f) Except if the Office of Administrative Hearings provides hearing officer services under AS 44.64.030 (b), and subject to the approval of the Department of Law, the executive director shall contract with a qualified, unbiased, and impartial hearing officer admitted to practice law in Alaska for at least two years and with experience in medical issues to conduct a hearing under this section.

(g) If the executive director determines, through analysis of the borrower's income, assets, and financial condition that, notwithstanding the medical disability, the loan obligation could be repaid without undue hardship to the borrower, the executive director may deny the request for cancellation on that basis.

(h) A borrower and cosigner's obligation to repay a loan is cancelled upon documentation of the borrower's death or total and permanent disability resulting from the borrower's performance of active duty in protection of the public as a member of the United States armed forces, a public safety officer, firefighter, paramedic, emergency medical technician (EMT), or other public first responder. In the case of an obligation to repay a family education loan, the obligation is cancelled upon documentation of the death or total and permanent disability of the student, on whose behalf the debt was incurred, resulting from the student's performance of active duty in protection of the public as described in this subsection.

History: Eff. 6/23/95, Register 134; am 3/1/2002, Register 161; am 2/20/2005, Register 173; am 12/31/2005, Register 176; am 3/23/2006, Register 177

Authority: AS 14.42.030

AS 14.43.105

AS 14.43.320

AS 14.43.630

Editor's note: As of Register 160 (January 2002), the regulations attorney made technical revisions under AS 44.62.125 (b)(6), and in accordance with ch. 85, sec. 45, SLA 2001, to change "student loan" to "education loan" in 20 AAC 15.920(b) and (c).

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