§ 682.705. Suspension proceedings.
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/us/cfr/t34/s§ 682.705·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Scope.
(1)A suspension by the Secretary removes a lender's eligibility under the FFEL programs or a third-party servicer's ability to enter into contracts with eligible lenders, and the Secretary does not guarantee or reinsure a new loan serviced by the servicer during a period not to exceed 60 days from the date the suspension becomes effective, unless---
(i)The lender or servicer and the Secretary agree to an extension of the suspension period, if the lender or third-party servicer has not requested a hearing; or
(ii)The Secretary begins a limitation or a termination proceeding.
(2)If the Secretary begins a limitation or a termination proceeding before the suspension period ends, the Secretary may extend the suspension period until the completion of that proceeding, including any appeal to the Secretary.
(b)Notice.
(1)The Secretary, or a designated Departmental official, begins a suspension proceeding by sending the lender or servicer a notice by certified mail with return receipt requested.
(2)The notice---
(i)Informs the lender or servicer of the Secretary's intent to suspend the lender's or servicer's eligibility for a period not to exceed 60 days;
(ii)Describes the consequences of a suspension;
(iii)Identifies the alleged violations on which the proposed suspension is based;
(iv)States the proposed date the suspension becomes effective, which is at least 20 days after the date of mailing of the notice;
(v)Informs the lender or servicer that the suspension will not take effect on the proposed date if the Secretary receives at least five days prior to that date a request for an oral hearing or written material showing why the suspension should not take effect; and
(vi)Asks the lender or servicer to correct voluntarily any alleged violations. (Authority: 20 U.S.C. 1080, 1082, 1085, 1094) \[59 FR 22457, Apr. 29, 1994, as amended at 60 FR 33058, June 26, 1995; 66 FR 34764, June 29, 2001; 68 FR 66615, Nov. 26, 2003; 72 FR 62009, Nov. 1, 2007; 78 FR 65822, Nov. 1, 2013\]
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