11 KAR 4:030. Student appeals process

Link to law: http://www.lrc.ky.gov/kar/011/004/030.htm
Published: 2015

      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.)
Read Entire Law on www.lrc.ky.gov