| (a) A student must repay the department costs of attendance
paid for courses not completed. To recover funds, the department may:
(1) deduct the amount owed from the student's next
scheduled loan disbursement;
(2) request the financial aid office of the academic
institution the student attends to remit an institutional check for
the amount owed; or
(3) require the student to repay the amount owed in
the event the student will not receive any more loan disbursements.
(b) A student who is found to be in breach of contract
must immediately pay the department liquidated damages equal to one
time the total forgivable loan amount plus collection costs, fees
and interest as specified in the contract or this section. If the
student is unable to immediately pay the full amount due, the student
may request a repayment plan.
(c) In the event the student breaches the contract
by beginning but failing to complete the obligated period of service,
the student shall pay to the department a prorated share of the damages
based on the percent of the obligated period of service which has
not been completed, plus collection costs, fees and interest as specified
in the contract or this section.
(d) Interest assessed to a forgivable loan may be up
to the highest rate allowed by law and shall commence with the date
of the first disbursement.
(e) The department will forward to the sponsor its
portion of the forgivable loan and accrued interest collected from
the student. However, in the event the department is unsuccessful
in collecting payment from the student, the department shall not be
responsible for repaying the sponsor any forgivable loan portions
or interest accrued on those portions.
(f) In the event a student fails or refuses to make
payments as required by the department, the department may initiate
collection procedures against the student in accordance with 4 TAC §1.52,
and the department may report outstanding debts or loans in default
to a national credit bureau to be placed on the students' credit reports.
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