The Commissioner shall exercise every reasonable effort to collect all amounts due on student loan agreements. When such effort has not resulted in the collection of a loan and it is determined that an account is severely delinquent, the Commissioner is authorized to implement the following procedures:

1. (1) For those accounts determined to be severely delinquent, the Commissioner is authorized to contract for commercial collection services to assist in collecting the amount due. The terms of the contract shall include a detailed description of all obligations and procedures of both parties.

   1. (a) To be classified as severely delinquent, an account must have a minimum of four (4) payments past due.

   2. (b) Accounts assigned to a commercial collection agency shall be assigned and settled in the following manner:

      1. Interest shall continue to accrue.

      2. The principal balance, plus accrued interest to date of assignment, shall be the amount assigned.

      3. The account shall be considered paid in full when the borrower pays the collection agency the assigned amount plus accrued interest.

      4. The Commissioner or designee shall provide the collection agency all appropriate information from Department files about the account.

   3. (c) The collection agency shall return to the Commissioner without charge or claim to any future commission any assigned account for which:

      1. The borrower has proven that the account was entitled to deferment or cancellation provisions during the period of delinquency for which the account was assigned.

      2. Notice of the death of the borrower has been received.

      3. Notice of bankruptcy of the borrower has been received.

      4. Notice of the total and permanent disability of the borrower has been received.

      5. The collection agency has been unable to contact the borrower for a period of six (6) months.

   4. (d) The collection agency shall maintain complete and accurate records of assigned accounts and shall provide the Commissioner or designee with monthly reports on the status of each assigned account.
   5. (e) The collection agency shall provide services pursuant to a written contract; provided, however, that no contract shall provide for and no agency shall be paid a commission in excess of thirty-five (35) percent of the amount collected on an assigned account.

2. (2) The Commissioner shall have the authority to charge off unpaid and uncancelled scholarship loan notes or student loan agreements which are deemed to be uncollectible; provided, however, that no account of any borrower determined to have known assets subject to suit shall be uncollectible.

   1. (a) To be charged off as uncollectible, an account shall be at least three (3) years past due.
   2. (b) A record of the historical collection effort shall be fully and uniformly documented on a form designed for the purpose.
   3. (c) The charge off action shall be recommended by the Director of the Office of Student Financial Assistance and approved by the Commissioner.
   4. (d) The balance of all accounts charged off as uncollectible shall be placed in a recovery account as provided in subsection 6A-20.024(3), F.A.C.
   5. (e) The local credit reporting agency in the last known city of permanent residence of the borrower shall be notified of the charge off action, as well as the agency in the city in which the charge off action takes place.

3. (3) The Commissioner is authorized to establish a recovery account for the purpose of maintaining accurate records on accounts charged off as uncollectible or otherwise settled.

   1. (a) The account number, balance, date of last payment and date of settlement of each account settled for death, bankruptcy, total disability or uncollectible small balance shall be entered.
   2. (b) The account number, balance, date of last payment and date of charge off of each account charged off as uncollectible shall be entered.
   3. (c) Provision shall be made for credit of any payment received after the date of the charge off.
   4. (d) Totals of amounts settled or charged off as uncollectible in each type of scholarship or loan program account shall be maintained.

Rulemaking Authority 1001.02(1), 1009.95(7) FS. Law Implemented 1009.95 FS. History–New 10-7-75, Amended 12-9-75, Formerly 6A-7.395, 6A-7.0395, Amended 12-28-86.