Section 20.15.940. Limitations on awarding loans.

	(a)  A loan may not be awarded for  
		(1) an educational program that is avocational or recreational in nature;  
		(2) flight instruction leading to certification as a private pilot;  
		(3) a flight school program, unless the student holds a private pilot's certificate at the time of application for the loan;  
		(4) flight instruction for type ratings or other proficiencies, unless the student holds a commercial license at the time of application for the loan; or  
		(5) a program of study offered outside the state in which the institution is located, unless the program's location is based upon, and serves, a bona fide educational purpose.  
	(b)  For attendance at a flight school program, only one loan will be awarded to a student for each certification or flight rating.  
	(c)  Only one loan will be awarded to a student to attend a non-flight career education program that is 12 months or less in duration and that awards a single certificate or degree.  
	(d)  Once a borrower has established residency under AS 14.43.125(a), the borrower does not lose residency status because of absence from the state for reasons not allowed under that subsection for a period of no more than 12 consecutive months if the borrower has a continuing intent to return to and remain permanently in the state.  
	(e)  For the purposes of AS 14.43.125(a)(6), it is presumed that a person cannot repay a loan as it becomes due, and may only obtain a loan in compliance with AS 14.43.125(d), if the person  
		(1) is incarcerated full-time in a correctional facility, as that term is defined in AS 33.30.901, and the person's scheduled release date is more than six months after the scheduled completion date of the career education or degree for which the loan is requested; or  
		(2) is permanently disabled to an extent that the person will not be able to receive income in an amount that would allow repayment of the loan, and there is no reasonable medical possibility that the condition of permanent disability will improve before the loan enters repayment.  
	(f)  For the purposes of AS 14.43.125(a)(7), AS 14.43.172(c)(5), or 14.43.750(a)(1)(B), a person has defaulted on a loan if any of the following has occurred:  
		(1) foreclosure upon or repossession of collateral for a loan or installment contract;  
		(2) execution procedures initiated on an unpaid loan or installment contract;  
		(3) entry of judgment accelerating the amount due under a loan or installment contract;  
		(4) the discharge by a creditor of a debt or installment contract due to nonpayment on a balance greater than $250.  
	(g)  If an applicant's credit history, learned through a credit check or otherwise, shows any of the following within the preceding two years, the applicant for a loan may obtain the loan only in compliance with AS 14.43.125(d):  
		(1) eviction from rental or leased housing based on non-payment;  
		(2) two or more credit accounts for which payments are currently three months or more past due;  
		(3) checks returned for insufficient funds on three or more occasions;  
		(4) lien for delinquent taxes that are not satisfied within 24-months, unless disputed and dispute pending;  
		(5) two or more references of an account to a credit collection agency; or  
		(6) an unsatisfactory credit score based on the industry standard set by the credit agency performing the review.  
	(h)  The commission staff will perform a credit history check on a loan applicant who  
		(1) is 21 years of age or older;  
		(2) is under 21 years of age if the commission staff has cause to believe that adverse credit actions will appear on the applicant's credit history;  
		(3) is under 21 years of age if the person has one or more dependent children; or  
		(4) has attained independent financial status by reaching the age of majority upon marriage under AS 25.20.020 or being emancipated under AS 09.55.590.  
	(i)  In an appeal under 20 AAC 15.915 of a denial of loan eligibility under AS 14.43.125(a)(7) or (8), the appellant may request that evidence of prior credit performance, in addition to that considered under (f) and (g) of this section be considered to mitigate the findings of the review of the applicant's credit history. The appellant must be able to show that extraordinary circumstances beyond the applicant's control led to the adverse credit history and that the applicant made good faith efforts to pay the past debt, or that the credit history does not accurately reflect the appellant's ability or willingness to pay debts as they become due. If the appellant bases the appeal on the showing of extraordinary circumstances that led to the adverse credit history, the appellant has the burden to show that a good credit history existed before the extraordinary occurrence.  
	(j)  For purposes of AS 14.43.125(d), a cosigner is presumed to demonstrate an ability or willingness to pay an extension of credit or loan as it becomes due if, at the time of the application for a loan, the cosigner has a FICO credit report score of 680 or more.  

Authorities

14.42.030;14.43.105;14.43.120;14.43.125;14.43.172;14.43.305;14.43.320;14.43.630;14.43.640;14.43.740;14.43.750

Notes

Reference

20 AAC 15.910
20 AAC 15.960
20 AAC 18.025

Authority

AS 14.42.030 AS 14.43.105 AS 14.43.120 AS 14.43.125 AS 14.43.172 AS 14.43.305 AS 14.43.320 AS 14.43.630 AS 14.43.640 AS 14.43.740 AS 14.43.750

History

Eff. 3/22/97, Register 141; am 3/15/98, Register 145; am 9/23/99, Register 151; am 4/20/2000, Register 154; am 2/27/2010, Register 193; am 2/22/2015, Register 2013