11 KAR 4:030.
Student appeals process.
RELATES TO: KRS
164.748(14)
STATUTORY AUTHORITY:
KRS 13B.070(3), 13B.170, 164.748(4)
NECESSITY, FUNCTION,
AND CONFORMITY: The Kentucky Higher Education Assistance Authority administers
programs to provide financial assistance to students to attend postsecondary
institutions. This administrative regulation sets forth the procedures by which
students seeking financial assistance or individuals indebted to the authority
for repayment of student financial assistance may request a review of decisions
made by the authority's employees which adversely affect their rights,
obligations or benefits or their eligibility to participate in authority
administered programs. This amendment is necessary to clarify hearing procedures
and the applicability of this administrative regulation to certain disputes
that may arise.
Section 1.
Definitions. (1) "Adverse action" shall mean any of the following
actions or decisions by an employee or agent of the authority that adversely
affects the rights, obligations, or benefits of a petitioner:
(a) Denial of an
award of student financial assistance;
(b) Reduction or
revocation of an award of student financial assistance;
(c) Determination of
the existence and amount of a repayment obligation or eligibility for
cancellation or deferment of a repayment obligation authorized by statute or
administrative regulation on a debt to the authority;
(d) Determination of
default or acceleration of repayment of a debt to the authority;
(e) Accuracy of
credit information;
(f) Establishment of
reasonable and affordable payment terms for rehabilitation of a defaulted
insured student loan or reinstatement of eligibility for additional student
assistance, including consolidation of defaulted insured student loans, after
payment of a claim due to default on an insured student loan;
(g) Denial of
rehabilitation of a defaulted insured student loan or reinstatement of
eligibility for additional student assistance, including consolidation of
defaulted insured student loans, after payment of an insurance claim by the
authority due to default on an insured student loan or nonpayment of any debt
to the authority.
(2) The definition
of "authority" is governed by KRS 164.740(1).
(3)
"Default" means the failure of a borrower to make an installment
payment when due, or to meet other terms of a promissory note under
circumstances where the authority finds it reasonable to conclude that the
borrower no longer intends to honor the obligation to repay.
(4)
"Petitioner" means an applicant for or recipient of student financial
assistance administered by the authority or a person, including an endorser,
indebted to the authority for financial assistance who has been affected by an
adverse action or decision by the authority.
(5) The definition
of "endorser" is governed by KRS 164.740(8).
(6) The definition
of "insured student loan" is governed by KRS 164.740(12).
(7)
"Record" means all of the documentation filed by the petitioner and
all of the information considered by the delegated employee of the authority in
ruling on a request for review pursuant to Section 4(1) of this administrative
regulation.
(8) "Request
for clarification" is the first communication, written or oral, from a
petitioner for explanation of an adverse action by the authority.
(9) "Request
for review" is a petitioner's communication challenging the authority's
basis for the adverse action.
Section 2. Scope of
Administrative Regulation. (1) The procedures prescribed in this administrative
regulation shall not apply to:
(a) The setoff of an
individual's tax refund or any payment by the U.S. Treasury or by the
Commonwealth for payment of a debt owed to the authority in accordance with 11
KAR 4:050, except to the extent specified in that administrative regulation;
(b) The issuance of
an administrative order of wage garnishment by the authority for recovery of a
defaulted insured student loan pursuant to 11 KAR 3:100;
(c) Any matter
pending adjudication by a court or that has previously been adjudicated by a
court, except that a petitioner shall exhaust all administrative remedies prior
to commencement of an action in court;
(d) The
dischargeability of a debt to the authority in bankruptcy;
(e) Denial of an
award of financial assistance due to lack of funds authorized for that purpose;
(f) Denial of a
grant due to the petitioner's failure to notify the authority of a change of
educational institution by a deadline established in administrative
regulations.
Section 3. Request
for Clarification. A petitioner may, upon any adverse action by the authority,
request from the authority, at any time following notification of the adverse
action, a concise statement of the basis for the action including citation of
statutory or regulatory authority for the adverse action. The authority's
delegated employee, within twenty (20) working days of receipt of the request
for clarification, shall respond in writing to a written request for
clarification and notify the petitioner of his right to request a review of the
adverse action. If the petitioner makes an oral inquiry at any time, the
authority shall not be required to respond in writing. The authority shall not
be required to suspend any activities it has undertaken or, in the ordinary
course of the administration of its programs, may subsequently undertake
related to the adverse action. The authority shall take reasonable steps to
informally resolve any discrepancy in the petitioner's record identified by the
oral or written request for clarification. If the delegated employee responding
to the request for clarification believes that the information available to the
authority indicates a discrepancy and warrants steps to resolve the dispute,
activities related to the adverse action may be suspended at the discretion of
the delegated employee.
Section 4. Request
for Review. (1) Initial administrative review.
(a) If the
applicability of statutes or administrative regulations to the adverse action
or the factual accuracy of information contained in the authority's notification
of adverse action or the response to a request for clarification pursuant to
Section 3 of this administrative regulation, he may request in writing a review
of the adverse action and any response to a request for clarification. This
request for an initial administrative review of the adverse action may be
submitted at any time, but shall not result in a suspension of any action by
the authority pertaining to the petitioner during the review, except that the
authority shall not report information to a credit bureau or assess collection
costs during the review on an insured student loan if the petitioner submits a
written request for an initial administrative review with relevant
documentation attached within sixty (60) days of the date that the authority
sends a notice of default by the petitioner on an insured student loan upon
payment by the authority of an insurance claim to the holder of the insured
student loan. If the delegated employee conducting the initial administrative
review believes that the information available to the authority indicates a
discrepancy and warrants steps to resolve the dispute, activities related to
the adverse action may be suspended at the discretion of the delegated
employee.
(b) The request for
initial administrative review of the adverse action shall specify the factual
basis on which the adverse action is disputed and any legal or equitable
defense the petitioner may have against recovery of a debt to the authority.
The petitioner shall submit with the request for review all documentation the
petitioner believes supports his position and shall submit any additional
documentation that the authority may deem relevant and require. The petitioner
may supplement the written request for review and the documentation within ten
(10) working days of the date the request is received by the authority. The
authority shall not be required to consider a request for review that is not in
writing or is not supplemented by supporting documentation that has been
requested in writing by the authority.
(c) The authority's
delegated employee conducting the review shall consider any documentation
submitted by the petitioner, any documentation of the authority, and
information from any other source that the delegated employee may deem relevant.
The documentation considered shall be made available to the petitioner upon
written request. Upon request of the petitioner at the time of submitting the
written request for review and clarification of why the authority cannot
adequately resolve the issues raised by the petitioner by review of the
documentary evidence, the petitioner or any other witness called by the
petitioner or the authority with relevant factual information may appear in
person or by telephone to present additional facts, if the delegated employee
conducting the review determines, in his discretion, that the issues to be
resolved require a determination of credibility or veracity. The petitioner's
request to appear in person or by telephone shall include identification of any
other individuals that the petitioner wishes to have testify, identification of
the specific issues regarding which the individuals are prepared to provide
additional information, and an explanation of the reasons why each individual's
testimony is necessary to resolve the issues. The documentation considered and
the delegated employee's summary of any in-person or telephonic testimony shall
constitute the entire record of the administrative review, and shall be deemed
conclusive as to all issues in dispute.
(d) The delegated
employee conducting the review shall notify the petitioner in writing of the
results of the administrative review, stating the essential facts and the
applicable laws and administrative regulations upon which the conclusion is
based. The notice shall also indicate that the record of the administrative
review and the written conclusions by the delegated employee shall be provided
to the executive director or his designee for a redetermination upon request of
the petitioner.
(2) Review by executive
director.
(a) A review by the
executive director or his designee of the results of the initial administrative
review shall consider the record of the initial administrative review;
applicable laws, administrative regulations, and any federal directives; and
any consultation with authority personnel that he may deem necessary. A request
for review by the executive director shall not result in a suspension of any
action by the authority pertaining to the petitioner during the review, except
that if the executive director or his designee conducting the review believes
that the information available to the authority warrants steps to resolve the
dispute, activities related to the adverse action may be suspended at the
discretion of the executive director or his designee. If the findings warrant,
the executive director or his designee may uphold the adverse action or result
of the request for review or may reverse or modify the adverse action or the
result of the request for review in whole or in part. The executive director or
his designee may, at any time, negotiate a mutually agreeable resolution of the
dispute if in his discretion, the circumstances warrant a settlement.
(b) Time frame. The
review by the executive director shall be requested in writing within thirty
(30) days of the date of the notice described in subsection (1)(d) of this
section.
(c) Notice. The
written decision of the executive director or his designee shall be sent to the
petitioner, with a notice that shall inform the petitioner of the right to
request a hearing pursuant to KRS Chapter 13B within thirty (30) days on all
issues raised by the petitioner in the request for review. Service of the
notice of the decision shall be conclusively presumed to be effected five (5)
days after mailing of the notice by the authority, if sent by U.S. first class
mail, unless the notice is returned to the authority undelivered by the postal
service. The date of service of the notice may otherwise be evidenced by
affidavit of an individual executing personal service or a postal delivery
receipt.
Section 5. Request
for Hearing. (1)(a) If an adverse action is upheld by the executive director or
his designee, the petitioner may request a hearing pursuant to KRS Chapter 13B.
A request for a hearing shall not result in a suspension of any action by the
authority pertaining to the petitioner.
(b) The request for
a hearing shall be served on the authority within thirty (30) days after
receipt of notice of the executive director's decision.
(2) Upon receipt of
a timely request for a hearing, the authority shall, in accordance with the
procedures prescribed in KRS Chapter 13B, arrange for a hearing before a
hearing officer appointed by the authority. The hearing officer, following
submission of the report described in subsection (3)(b) of this section, shall
establish a schedule for any discovery, prehearing conferences, and the time
and place of the hearing. The place of the hearing shall be in Franklin County,
unless another location is agreed on by the parties.
(3)(a) Not more than
fifteen (15) days following service upon the authority of the request for a
hearing, the parties shall confer and jointly stipulate the issues to be
resolved by the hearing officer, discuss the possibility of informal resolution
of the dispute, develop a proposed discovery plan, exchange or arrange for the
exchange of a list of the names, addresses, and phone numbers of any witnesses
expected to testify at the hearing and a brief summary of the testimony of each
witness that the party expects to introduce into evidence, and agree to
possible dates for a prehearing conference and the hearing.
(b) The authority
shall report to the hearing officer the results of the discussions between the
parties described in paragraph (a) of this subsection.
(c) Upon the request
of either party, at any time, the hearing officer may issue a subpoena for the
production of documents or the attendance of witnesses. Either party may depose
witnesses, upon reasonable notice to the witness and the opposing party,
without leave of the hearing officer, except that attendance of witnesses that
are not parties to the hearing may be compelled by subpoena issued by the
hearing officer, either party may, without leave of the hearing officer, submit
interrogatories and request for admissions to the opposing party. The party
receiving the interrogatories or request for admissions shall respond within
twenty (20) days, or upon such shorter or longer time as the hearing officer
may allow. Each matter of which an admission is requested shall be deemed
admitted unless, within twenty (20) days after service of the request, or upon
such shorter or longer time as the hearing officer may allow, the party to whom
the request is directed serves upon the party requesting the admission a
written answer or objection addressed to the matter.
(4) At the hearing,
the record of the administrative review, described in Section 4(1) of this
administrative regulation, and the decision of the executive director or his
designee, described in Section 4(2) of this administrative regulation, shall be
submitted to the hearing officer and the taking of proof shall commence first
with the presentation of evidence by the petitioner and then by the authority,
with opportunities for cross-examination, rebuttal, and closing statements.
Section 6. Final
Order of Board. The board shall review the hearing officer's recommended order
and the record of the hearing at the next regularly scheduled meeting of the
board, unless a special meeting is necessary for this purpose to render a final
order within the time required by KRS 13B.120. The board shall adopt the
hearing officer's recommended order unless it is clearly unsupported by the
evidence presented at the hearing and the applicable law. The board shall only
consider the record adduced at the hearing, including all documents, briefs,
and transcripts of the hearing, as well as the evidence presented at the
hearing, but may, at the discretion of the board's chairman, permit counsel for
the petitioner and the authority, or the petitioner if not represented by
counsel, to submit briefs and make oral arguments pertaining to the issues
addressed in the hearing officer's recommended order. (5 Ky.R. 279; eff.
11-1-78; Am. 6 Ky.R. 680; eff. 8-6-80; 21 Ky.R. 445; eff. 10-6-94; 23 Ky.R.
3066; eff. 4-14-97.)