Pennsylvania Higher Education Assistance Agency (PHEAA)
The most common type of administrative hearing held by PHEAA is a wage garnishment hearing whereby PHEAA garnishes up-to fifteen percent (15%) of the disposable pay of a borrower who has defaulted on his/her student loans. For loans issued under the Federal Family Education Loan Program ("FFELP"), the laws regarding the administrative procedure may be found at 20 U.S.C., §1095a, 34 C.F.R. §34.1, at seq., 34 C.F.R. §682.410(b), and 22 Pa. Code. §121.10. For alternative or private loans (i.e., loans not issued under the FFELP program), the laws regarding the administrative hearing process may be found at 24 P.S. §5104.3, and 22 Pa. Code §121.9.
Irrespective of whether the loans are issued under FFELP, the administrative hearing process is generally as follows: The borrower is issued a notice prior to wage withholding, which affords the borrower an opportunity to respond and request a hearing. The hearing request may be based upon a written statement, a telephone hearing, or an in-person hearing. A Hearing Examiner presides over all hearings. For written statement hearings, PHEAA provides the Hearing Examiner with a written statement and documents which evidence the debt and the borrower's ability to pay same; white the borrower is afforded an opportunity to provide a written statement and supporting documents in opposition to the wage garnishment. For telephone and in-person hearings, PHEAA presents documentary evidence and oral testimony to support the wage garnishment. The borrower (or counsel, if applicable) has the right to cross-examine the PHEAA witness. The borrower has an equal opportunity to present documentary evidence and oral testimony in opposition to the wage garnishment, and cross-examination of the borrower is permitted. At PHEAA's sole expense, stenographic services are utilized for all telephone and in-person hearings, and in-person hearings are held at PHEAA's headquarters in Harrisburg.
After the Hearing Examiner issues his Findings of Facts and Conclusions of Law, both PHEAA and the borrower may request reconsideration with the Hearing Examiner. After reconsideration, either party may request an appeal directly to the PHEAA Board of Directors. On appeal, a Committee of the Board of Directors reviews the entire record and entertains oral argument. The Committee listens to oral argument at PHEAA headquarters, and the borrower may present same in-person or via telephone. The Committee makes a recommendation to the full Board of Directors, which votes whether to adopt the Committee's recommendation.
A less common administrative hearing held by PHEAA relates to students who challenge a denial of state grant aid. This process may be found at 22 Pa. Code §§121.7 and 121.8. If an applicant is denied eligibility, the appeal is first entertained by the Administrative Review Committee. The Administrative Review Committee bases its decision solely on the documents previously submitted by the student to evidence eligibility, and PHEAA's written explanation as to why eligibility was denied. Thereafter, a student may appeal to the Committee on Appeals, which reviews to the aforementioned documents and a written statement from the student which explains why the Administrative Review Committee's decision was erroneous. if the Committee on Appeals affirms PHEAA's decision to deny eligibility, the student may then appeal directly to the PHEAA Board of Directors, which may hear the appeal directly, or require a hearing be held before a Hearing Examiner. A hearing before the Hearing Examiner follows the hearing procedures as outlined above (regarding presentation of witnesses, documentary evidence, transcript of the proceeding, and the creation of Findings of Facts and Conclusions of Law). The PHEAA Board of Directors then enters a final order.
James J. Jarecki, Esq.
Pennsylvania Higher Education Assistance Agency
1200 North Seventh Street
Harrisburg, PA 17102-1444