Sec. 13b.02.06.09. Claim Adjudication

A. The Secretary may determine the scope of investigation necessary to adjudicate a claim.

B. The Secretary may request information and records from the student, school, lenders, loan servicers, the USED, and others as needed in the Secretary’s judgment.

C. The Secretary shall determine whether to approve or deny a claim.

D. If a claim is approved, the Secretary shall determine the:

(1) Amount to be awarded;

(2) Time, place, and manner of payment;

(3) Conditions upon which payment shall be made; and

(4) Order in which payments shall be made.

E. In determining whether to grant or deny a claim and the amount to be awarded for an approved claim, the Secretary may consider the:

(1) Basis of the claim;

(2) Evidence obtained in the investigation;

(3) Damages or injuries sustained by the student as a result of the school’s actions;

(4) Student’s participation in a transfer program or teach-out;

(5) Student’s progress toward or receipt of a degree, certificate, or other terminal award;

(6) Length of any break in the student’s attendance and the reason;

(7) School’s efforts to resolve the claim;

(8) Amount available and likely to become available to the Fund for payments of claims;

(9) Size and number of claims filed or likely to be filed against the school; and

(10) Past decisions on similar claims.

F. Claim Based on School Closure.

(1) If a claim is based on a school’s closure, the student shall be presumed to have incurred no damages or injuries for tuition and fees if the:

(a) Student was awarded the degree, certificate, or other award that the student sought;

(b) Student participates in a teach-out or transfer program as approved by the Secretary;

(c) Student’s loan is discharged or eligible for discharge; or

(d) Claim is for tuition and fees applicable to a semester or term other than the one in which the school closed.

(2) A student may overcome the presumption in §F(1) of this regulation by providing proof of damages or injuries notwithstanding the receipt of an award, successful participation in a teach-out or transfer program, or loan discharge.

G. Notwithstanding any other provision of this chapter, a student may not receive an award for loan amounts that have been or are eligible for discharge.

H. Payment Due to School Closure.

(1) If the Secretary awards payment to a student because of a school closure, the payment shall first be made to a lender or loan servicer, as applicable, as repayment of the student’s debt to the lender for that portion of the indebtedness that pertains to tuition and fees.

(2) As a condition of payment, the lender or loan servicer shall update the student’s credit reports to reflect full or partial satisfaction of the debt, as applicable, and forward confirmation of the update to the Secretary.

(3) Upon the request and written authorization of the student, the Secretary may attempt to have the lender or loan servicer discharge all or a portion of the student’s debt.

I. The Secretary’s decision on a claim shall be in writing and mailed to the student and school and shall become final 30 days after the date of the Secretary’s determination unless the student, within the 30-day period, files with the Secretary a written request for reconsideration. The written request shall contain evidence that supports a request for reconsideration. The Secretary’s decision on reconsideration is final.

J. A claimant or other person does not have any right in the Fund as beneficiary or otherwise.