1. (1) Limitation, suspension, or termination proceedings shall not affect a participating school's responsibilities or rights that are based on the participating school's prior participation in the educational loan programs, except as provided in subrule (4) of this rule and R 390.1489.

2. (2) A participating school limitation may result in any of the following:

   1. (a) A limit on the number or percentage of students enrolled in the participating school who may receive educational loans.
   2. (b) A limit, for a stated period of time, on the percentage of a participating school's total receipts from tuition and fees derived from the educational loan programs.
   3. (c) A requirement that a participating school obtain a bond, in a specified amount, to assure its ability to meet its financial obligation to students who received educational loans.
   4. (d) A hearing as required under the provisions of R 390.1487.

3. (3) A suspension shall remove a participating school's eligibility to participate in the educational loan programs for not more than 60 days, unless 1 of the following occurs:

   1. (a) The participating school and the designated official agree to an extension.
   2. (b) The designated official begins a limitation or termination proceeding.
   3. (c) The designated official begins a limitation or termination proceeding before the suspension period ends. The designated official may extend the suspension period until the completion of that proceeding.

4. (4) A termination shall result in all of the following:

   1. (a) End a school's eligibility to participate in the educational loan programs.
   2. (b) Prohibit a school from receiving any loan proceeds, or from releasing to a student any loan check or loan proceeds, from a loan for which a guaranty commitment has already been issued.
   3. (c) Prohibit a school from certifying new applications for educational loans.
   4. (d) Prohibit further disbursement by a school that is a lender under the educational loan programs for which guaranty commitments have already been issued by the authority.
   5. (e) Prohibit the authority from increasing any guaranty commitment on a loan for which the guaranty commitment has already been issued.
   6. (f) Prohibit further guaranty commitments by the authority for loans to students to attend that school.

History: 1990 AACS.