§ 178.40

Procedures for filing claims.

(a) General. The Commissioner will honor claims for reimbursement for loss on a loan insured pursuant to this subpart only if: (1) The loan is determined to be in default (as defined in § 178.1 (n)) or has been canceled in accordance with § 178.39 or the borrower has been adjudicated a bankrupt; (2) the lender has used due diligence in attempting to effect collection of a defaulted loan; (3) a written demand for payment has been made on the borrower and any endorser on a defaulted note not less than 30 days nor more than 60 days prior to the filing of the claim for loss; and (4) the claim is supported by such documents as are required by the Commissioner.

(b) Collection of loans. The lender shall use due diligence in the servicing and collection of loans insured under this subpart, and shall utilize collection practices no less extensive and forceful than those generally in force among financial institutions.

(c) Filing of claim application. A claim for reimbursement for loss on an insured loan shall be filed on a form provided by the Commissioner and may be made at such time as the lender has determined, in the case of default, that the loan cannot be collected, or after such time as the lender determines the borrower to have died or become totally and permanently disabled or upon notification that the borrower has been adjudicated a bankrupt. Such claims shall be submitted together with the original or copies of all documents relating to the approval and servicing of the loan including all collection efforts made (whether by the original lender or by any subsequent holder) and in the case of a loan in default, an affidavit, on a form to be supplied by the Commissioner to the effect that to the best of the lender's knowledge and belief, the borrower is not entitled to deferment of the repayment of the principal of the loan as provided for in § 178.37 (e), In cases of loss on account of cancellation for death or total and permanent disability, the claim shall also be accompanied by the documents forming the basis for the determination. In cases of bankruptcy the claim shall be accompanied by copies of any correspondence, including proofs of claim, directed to or received from the referee in bankruptcy and any objections to the discharge of which the lender may be aware.

(d) Assignment of note. Payment of a claim shall be contingent upon receipt of an assignment to the United States of America of all right, title and interest of the lender of the note on which the claim is filed, without warranty except that the note qualified for insurance under this subpart.

§ 178.41 Records, reports, and inspections.

(a) The lender shall maintain complete and accurate records of all federally insured loan accounts which shall reflect each transaction so as to afford ready identification of each borrower's account and the status thereof and shall contain full and proper documentation to support a claim for loss.

(b) The lender shall retain all records pertaining to each applicant to whom a loan is made until such time as the Commissioner has no further need for such records.

(c) The lender shall submit such reports and information as the Commissioner may reasonably require in connection with the administration of the program, and will permit the Government's authorized representatives at any reasonable time to inspect its books and accounts insofar as they relate to loans insured under this subpart.

§ 178.42 Transfer of insured loan.

(a) A loan insured under this subpart shall not be transferred or assigned, including assignment as security, except to another eligible lender.

(b) The Commissioner shall be notified of any assignment of a note insured under this subpart where the right to receive interest payments has also been assigned. The borrower shall be notified of the assignment of any note insured under this subpart where the assignment results in his being required to make installment payments or direct other matters connected with the loan to another party.

(c) The approval of the Commissioner is required prior to transfer or assignment of a note to any eligible lender who has not entered into an agreement with the Commissioner pursuant to this subpart. The Commissioner shall approve such transfer or assignment only if he has assurance that all matters required of lenders under this part will be complied with by one or more of the parties to such transfer or assignment.

(d) The insurance coverage on notes transferred or assigned in accordance with the provisions of this section shall remain in full force and effect and any matters required to lenders in order to perfect a claim on such notes under this part may be performed by the transferee or assignee.

§ 178.43 Termination of insurance.

The agreement covering insurance of loans provided for in § 178.32 may be terminated after reasonable notice and an opportunity for a hearing, if the Commissioner finds the lender has failed to comply with any of the provisions of this part including (1) the exercise of reasonable care and diligence in the making and collection of loans, (2) payment of premiums required pursuant to § 178.36, or (3) the filing of such reports and the keeping of such records as may be required pursuant to § 178.41. After issuance to and the receipt of such notice by the lender, and pending action taken on the basis of a hearing, if any, the Commissioner shall no longer issue certificates of loan insurance pursuant to § 178.32 (b).

§ 178.44 Forbearance.

Nothing in this subpart shall be construed to preclude any forbearance for the benefit of the student borrower which may be agreed upon by the parties to the insured loan and approved by the Commissioner.

(a) "Commissioner" means the Commissioner of Education.

(b) "Desegregation" means the assignment of students to public schools and within such schools without regard to their race, color, religion, or national origin, but "desegregation" shall not mean the assignment of students to public schools in order to overcome racial imbalance.

(c) "Public School" means any elementary or secondary educational institution, provided that such public school is operated by a State, subdivision of a State, or governmental agency within a State, or operated wholly or predominantly from or through the use of governmental funds or property, or funds or property derived from a governmental source.

(d) "School Board" means any agency or agencies which administer a system of one or more public schools and any other agency which is responsible for the assignment of students to or within such system.

(e) "Special educational problems occasioned by desegregation" and "problems incident to desegregation" mean those problems (other than problems uniquely related to the assignment of students to public schools in order to overcome racial imbalance) arising from the assignment of students to and within public schools without regard to differences in their race, color, religion, or national origin.

(f) Attendance at an institute on a "full-time basis" means attendance at the institute in accordance with the policies and regulations regarding attendance in effect at the institution at which the individual is enrolled, as set forth in the institution's arrangement with the Commissioner.

(g) An "Institute Day" means each day of a program of an institute which is scheduled to provide at least five hours of training.

Subpart B-Training Institutes

§ 180.11

Arrangements with institution.

The Commissioner will arrange, through grants or contracts, with institutions of higher education for the operation of short-term or regular session institutes for special training designed to improve the ability of teachers, supervisors, counselors, and other elementary or secondary school personnel to deal effectively with special educational problems occasioned by desegregation.

§ 180.12 Stipends other than travel allowances.

An individual who attends an institute on a full-time basis shall be paid a stipend of $15 for each institute day of attendance up to $75 per week. In the event that participation in an institute is interrupted or is terminated prior to completion of the institute program, stipend payment shall be made to the individual for such period as he was in attendance on a full-time basis.

§ 180.13 Travel allowances.

(a) An individual who attends an institute on a full-time basis may be provided travel, or an allowance for his actual cost of travel, from place of residence or employment to place of the institute, and from place of the institute to his place of residence or employment, as set forth in the institution's arrangement with the Commissioner, but not to exceed nine cents per mile. The allowance for travel in the case of travel by private automobile shall be at the rate of nine cents per mile. In the case of joint travel by private automobile by a group of participants, travel allowances shall be payable only to one of such participants, but without reduction on account of contribution to him by the other participants.

(b) In addition to the limitations of paragraph (a) of this section, when air, rail, or steamship transportation is used, first-class accommodations or an allowance therefor may be provided only where first-class accommodations are the only class of service for the most direct travel route, or where less than first-class accommodations result or would result in greater cost than first-class accommodations.

(c) In the event that an individual's participation in an institute is terminated prior to his completion of the institute program, travel or an allowance therefor, from place of the institute to his place of residence or employment may be provided only if such termination is occasioned by extraordinary circumstances not reasonably within the control of the individual.

Subpart C-Grants to School Boards § 180.21 Applications.

School boards may apply to the Commissioner for grants to pay, in whole or in part, the cost of: (a) Giving to teachers and other public school personnel inservice training in dealing with problems incident to desegregation, and (b) employing specialists to advise in problems incident to desegregation.

(a) "Act" means the Social Security Act, as amended, and titles referred to are the titles of that Act;

(b) The term "Department" means the Department of Health, Education, and Welfare;

(c) The term "Commissioner" means the Commissioner of Welfare;

(d) The term "Welfare Administration" means the Welfare Administration in the Department;

(e) The term "Bureau" means the Bureau of Family Services of the Welfare Administration;

(f) The term "State" includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, and Guam;

(g) The term "State agency" means the State public assistance agency administering, or supervising the administration of, the public assistance plan under title I, IV, X, XIV, or XVI;

(h) The term "regional office" and "central office" refer to regional offices of the Department and the central office of the Bureau, respectively.

Subpart A-Approval of State Plans for Public Assistance and Certification of Grants

§ 201.2 General.

The State plan is a comprehensive statement prepared by the State agency describing all pertinent aspects of its operations necessary for the Welfare Administration to reach a determination as to conformity with the specific requirements stipulated in the pertinent titles of the Act. The State plan sets forth the basic State laws enabling and limiting the administration of public assistance; a description of the agency's organization and functions; its methods of administration, including the rules and regulations governing personnel administration; policies and interpretations with regard to eligibility for and extent of assistance; a description of its plan for social services and for training of public assistance personnel; fiscal operations; and reporting and research activities. Pertinent Federal policies are set forth in the Handbook of Public Assistance Administration, which also contains detailed instructions and suggestions for

the content and submittal of the documents comprising the State public assistance plan. Copies of the Handbook are furnished to each State agency.

$201.3 Approval of State plans and amendments.

The State plan consists of written documents furnished by the State to cover each of its programs under the Act: old-age assistance and medical assistance for the aged (title I); aid and services to needy families with children (title IV); aid to the blind (title X); aid to the permanently and totally disabled (title XIV); or aid to the aged, blind, or disabled and medical assistance for the aged (title XVI). The State may submit the common material on more than one program as an integrated plan. However, it must identify the provisions pertinent to each title since a separate plan must be approved under each public assistance title. A plan submitted under title XVI encompasses, under a single plan, the groups otherwise included in the three separate plans under titles I, X, and XIV. After approval of the original plan by the Commissioner, all relevant changes, such as new statutes, rules, regulations, interpretations, and court decisions, are required to be submitted currently so that the Commissioner may determine whether the plan continues to meet Federal requirements and policies.

(a) Submittal. State public assistance plans and revisions of the plans are submitted to the central office through the regional offices. The States are encouraged to obtain consultation of the regional staff when a plan is in process of preparation or revision.

(b) Review. The family service representatives in the regional offices are responsible for review of State plans and amendments. They also initiate discussion with the State agency on clarification of significant aspects of the plan which come to their attention in the course of this review. State plan material on which the regional staff has questions concerning the application of Federal policy is referred with recommendations as required to the central office for decision. Comments and suggestions, including those of consultants in specified areas of public assistance administration, may be prepared by the central office for use by the regional representatives in negotiations with the State agency.