Section 20 AAC 15.970 - Delinquency and default(a) A loan is delinquent if a loan payment is one or more days past due. When a loan payment is (1) 30 or more days past due, the borrower and cosigner, if any, will be notified;(2) 60 or more days past due, the institution of attendance will be notified.(b) A loan is in default if (1) a loan payment has become 180 or more days past due;(2) the borrower or the cosigner, if any, has failed to comply with the applicable reporting requirements of this chapter; or(3) the borrower or cosigner, if any, has falsified any information on the loan application or information required under AS 14.43 or this chapter.(c) To prevent default under (b)(1) of this section, the borrower or cosigner, if any, must pay the delinquent amount before it is 180 days past due.(e) A borrower and cosigner, if any, who has defaulted under (b)(1) of this section is no longer considered to be in default status for the purposes of (4) calculation of an institution's default rates under AS 14.43.120(d), if enough of the interest and principal due is paid so that no payment is more than 179 days past due, calculated as if the loan had not been accelerated; or(5) issuing an order to withhold and deliver under AS 14.43.145(a)(3) if (A) all costs of collection, and the interest and principal that would have been due if the loan had not been accelerated, are paid; or(B) the borrower or cosigner, if any, has submitted proof that the person is current on payments and has made complete and timely payments for the six most recent and consecutive months, under a payment agreement that person has reached with the commission or its agent collection agency.(f) If a person has cosigned a loan that is in default, the commission will claim the permanent fund dividends of both the borrower and the cosigner. The commission will give priority to taking the permanent fund dividend of the borrower to satisfy the defaulted loan before taking the permanent fund dividend of the cosigner.(g) For the purposes of determining, as a basis for eligibility for a loan, whether the borrower or cosigner has defaulted on a loan previously awarded by the commission, a borrower or cosigner will be considered not to have defaulted on the loan if the borrower or cosigner has made full payment on the loan, including all interest and collection costs, and if the borrower or cosigner satisfies the requirements of AS 14.43.172(c). The borrower or cosigner's payment of the loan under this subsection must have been predominantly voluntarily paid.(h) For purposes of this section, an amount is not voluntarily paid if it is the proceeds from an order to withhold and deliver, involuntary wage assignment, or involuntary taking of the borrower's permanent fund dividend.(i) Information regarding the status of a loan may be reported to credit bureau organizations.(k) Notwithstanding a determination of default, the commission may make an alternative repayment schedule available to a borrower subsequent to default. Once a loan has become 180 or more days past due, the commission may require the borrower to enter into and comply with a default forbearance agreement, in order to qualify for an alternative repayment schedule and removal of default status.Eff. 12/4/96, Register 140; am 3/22/97, Register 141; am 3/15/98, Register 145; am 9/23/99, Register 151; am 4/20/2000, Register 154; am 3/1/2002, Register 161; am 7/1/2002, Register 162; am 5/26/2011, Register 198; am 2/22/2015, Register 213, April 2015; am 8/16/2024, Register 251, October 2024Authority:AS 14.42.030
AS 14.43.105
AS 14.43.120
AS 14.43.125
AS 14.43.145
AS 14.43.168
AS 14.43.171
AS 14.43.175
AS 14.43.320
AS 14.43.630
AS 14.43.640
AS 14.43.740