Kentucky Administrative Regulations › Title 11 - KENTUCKY HIGHER EDUCATION ASSISTANCE AUTHORITY › Chapter 3 - Kentucky Loan Program › Section 11 KAR 3:100 - Administrative wage garnishment

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO:
				KRS
				164.744(1),
				164.748(4), (10),
				(20),
				164.753(2),
				34 C.F.R.
				682.410(b)(9),
				20
				U.S.C. 1071-1087-2,
				1095a
NECESSITY, FUNCTION, AND CONFORMITY: Pursuant to
				KRS
				164.744(1) and
				164.748(2),
				the Kentucky Higher Education Assistance Authority has entered into agreements
				with the secretary to provide loan guarantees in accordance with
				20
				U.S.C. 1071 through
				1087-2.
				20 U.S.C.
				1095a permits a student loan guarantee agency
				to garnish the disposable pay of a borrower to recover a loan guaranteed
				pursuant to
				20
				U.S.C. 1071 through
				1087-2,
				notwithstanding a provision of state law. That section also permits the student
				loan guarantee agency to establish procedures for requesting and conducting a
				hearing related to the wage garnishment.
				KRS
				164.748(10) authorizes the
				authority to collect from borrowers loans on which the authority has met its
				guarantee obligation, and
				KRS
				164.748(20) authorizes the
				authority to conduct administrative hearings, exempt from KRS Chapter 13B,
				pertaining to wage garnishment. This administrative regulation establishes the
				procedures for implementing wage garnishment in accordance with requirements of
				the federal act.
Section 1.
(1) Following payment of a claim by the
			 authority to a participating lender by reason of the borrower's default in
			 repayment of an insured student loan, the authority, acting through its
			 executive director or other designee, may issue an administrative order for the
			 withholding of the debtor's disposable pay, which order shall conform to the
			 requirements of this section.
(2)
			 This administrative regulation shall apply to a debtor who is either a borrower
			 or an endorser of an insured student loan.
(3) An order for withholding of disposable
			 pay shall not be issued under this section nor become effective less than
			 thirty (30) days after the authority provides a written notice to the debtor by
			 personal service or mail, addressed to the debtor at the residence or
			 employment location last known to the authority. The notice shall include at
			 least the following information:
(a) The name
			 and address of the debtor;
(b) The
			 amount of the debt determined by the authority to be due;
(c) Information sufficient to identify the
			 basis for the debt;
(d) A statement
			 of the intention of the authority to issue an order for withholding of
			 disposable pay;
(e) A statement of
			 the right to dispute the existence, amount, or enforceability of the debt or
			 the terms of a proposed repayment schedule under the garnishment order (other
			 than a repayment schedule agreed to in writing pursuant to paragraph (g) of
			 this subsection);
(f) A statement
			 of the right to inspect and copy any records relating to the debt open to
			 inspection in accordance with
			 KRS
			 61.870 through
			 61.884;
(g) A statement of the opportunity to enter
			 into a written agreement with the authority, on terms satisfactory to the
			 authority, establishing a schedule for repayment of the debt;
(h) A statement that, unless there is good
			 cause determined by the authority for the debtor's failure to timely request a
			 hearing, the debtor's acquiescence to the withholding of disposable pay shall
			 be presumed; and
(i) A statement
			 that if the debtor requests a hearing, but fails to appear without good cause
			 determined by the hearing officer, the hearing officer shall affirm the
			 issuance of an order for withholding of disposable pay.
(4) An amount shall not be withheld from the
			 disposable pay of an individual during the first twelve (12) consecutive months
			 of reemployment commenced within twelve (12) months following an involuntary
			 separation from employment.
(5)
			 Establishment of a written repayment schedule in accordance with subsection
			 (3)(g) of this section shall be, for purposes of subsection (3)(e) of this
			 section, conclusive acknowledgement by the debtor of the existence and amount
			 of debt agreed to be paid.