| (a) Upon final verification of the death or determination
of permanent and total disability of a borrower, all loans through
the Program shall be discharged unless there is a judgment against
the borrower and the Commissioner determines that a release of the
borrower's liability is not in the best interest of the Program.
(b) Verification of death and determination of permanent
and total disability of a borrower or cosigner through the Program
shall be made in accordance with the governing provisions of the Federal
Direct Loan Program.
(c) The final verification of death and determination
of permanent and total disability of a borrower or cosigner shall
be made by Board Staff.
(d) Upon final verification of the death or determination
of permanent and total disability of a borrower, the liability of
the cosigner for that borrower shall be discharged.
(e) Upon final verification of the death or determination
of permanent and total disability of a cosigner, Board Staff shall
determine if the release of the liability of the cosigner is in the
best interest of the loan program and, if so, shall authorize a release
of the cosigner's liability, whether or not there is a judgment against
the cosigner.
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