§ 121.4. Denial of eligibility to loan defaulters.

 (a)  No award or disbursement of higher education grants will be made to any person who has allowed a loan to mature through purchase from the lender by the Agency under the Loan Guaranty Programs or who has a current loan default record with the Agency as a result of a claim on the loan having been submitted to the Agency by the lender unless the applicant has repaid the loan in whole or in part and, in the judgment of the Agency, did not make such repayment merely to gain grant eligibility or unless the applicant otherwise shows good cause why grant eligibility should be reinstated. Higher education grants may also be denied to any person who has defaulted on an educational loan guaranteed or reinsured by the Federal Government or by the government of any other state or who has defaulted on a loan made by any institution of higher education to finance the costs of education; eligibility in these cases will be determined in the same manner as in the case of Agency-guaranteed loans.

 (b)  Eligibility for a loan guaranty will be denied to any person who has allowed a loan to mature through purchase from the lender by the Agency under the guaranty of a previous loan in the Loan Guaranty Programs or has a current loan default record with the Agency as a result of a claim on the loan having been submitted to the Agency by the lender unless the applicant has repaid the loan in whole or in part and, in the judgment of the Agency, did not make such repayment merely to gain loan eligibility or unless the applicant otherwise shows good cause why loan eligibility should be reinstated. Eligibility for a loan guaranty may also be denied to any person who has defaulted on an educational loan guaranteed or reinsured by the Federal Government or by the government of any other state or who has defaulted on a loan made by any institution of higher education to finance costs of education; eligibility in these cases will be determined in the same manner as in the case of Agency-guaranteed loans.

 (c)  Applicants denied eligibility under this section shall be entitled to review of such denial in accordance with the procedure for review and appeals as provided in § §  121.7 and 121.8 (relating to notice of denial and preliminary review procedures; and applicant and recipient appeals and hearings).

   The provisions of this §  121.4 issued under act of July 12, 1981 (P. L. 264, No. 89) (24 P. S. § §  5102.1 and 5104(1.2)).

   The provisions of this §  121.4 adopted February 27, 1969; amended February 16, 1973, effective February 17, 1973, 3 Pa.B. 325; amended November 23, 1973, effective November 24, 1973, 3 Pa.B. 2719; amended December 27, 1974, effective December 28, 1974, 4 Pa.B. 2699; amended August 22, 1975, effective August 23, 1975, 5 Pa.B. 2189; amended June 19, 1981, effective June 20, 1981, 11 Pa.B. 2116; amended March 26, 1982, effective March 27, 1982, 12 Pa.B. 1043. Immediately preceding text appears at serial pages (64655) and (64656).

   This section cited in 22 Pa. Code §  121.151 (relating to application of existing Agency regulations); 22 Pa. Code §  121.201 (relating to application of existing Agency regulations); 22 Pa. Code §  121.302 (relating to application of existing Agency regulations); and 22 Pa. Code §  121.401 (relating to application of existing agency regulations).