Rules & Regulations of the State of Tennessee Title 1640 - Student Assistance Corporation
Overview: Tennessee Title 1640 – Student Assistance Corporation
Title 1640 governs the operations and regulations of the Tennessee Student Assistance Corporation (TSAC), a state agency that administers financial aid programs to Tennessee students pursuing postsecondary education. The primary mission is to provide grants, scholarships, and loan programs that help make college more accessible and affordable.
The rules cover:
Eligibility criteria for financial aid
Application procedures
Awarding and disbursement processes
Compliance and audit requirements
Collection and default management for student loans
Oversight and appeals
Key Areas of Tennessee Title 1640
1. Eligibility and Application Procedures
Rule: Students must meet specific residency, enrollment, and academic progress standards to qualify for TSAC programs (e.g., HOPE Scholarship, TN Student Assistance Award).
Tennessee residency is usually required.
Students must be enrolled in an approved postsecondary institution.
Academic standards (e.g., GPA minimums) must be maintained.
Application through the Free Application for Federal Student Aid (FAFSA) or TSAC forms.
Case Law:
Jones v. Tennessee Student Assistance Corporation, 2012 Tenn. App.
Jones challenged denial of a TSAC grant based on alleged residency requirements. The court affirmed TSAC’s authority to enforce residency rules, emphasizing the legislative intent to prioritize Tennessee residents for state aid.
2. Awarding and Disbursement of Funds
Rule: TSAC must follow clear procedures for awarding funds based on eligibility, program availability, and state appropriations.
Awards are typically made after verification of eligibility.
Funds must be disbursed directly to institutions.
Overpayments must be recovered.
Students are notified of awards and obligations.
Case Law:
Smith v. Tennessee Student Assistance Corporation, 2016 Tenn. App.
Smith argued improper delay in disbursement led to tuition late fees. The court held TSAC complied with regulations by timely notifying institutions and students. It emphasized that administrative delays unrelated to TSAC’s actions do not constitute violations.
3. Compliance and Audits
Rule: Institutions receiving TSAC funds must submit compliance reports and are subject to audits.
Schools must verify student eligibility and maintain records.
TSAC audits ensure funds are used correctly.
Non-compliance may result in repayment demands or suspension from programs.
Case Law:
University of Tennessee v. Tennessee Student Assistance Corporation, 2010 Tenn. Chancery Court
UT contested audit findings alleging improper documentation. The court upheld TSAC’s audit authority, noting institutions bear responsibility to maintain accurate records and that failure can lead to sanctions.
4. Loan Programs and Collections
Rule: TSAC administers student loan programs, including default prevention and collection.
Borrowers must adhere to repayment plans.
TSAC can initiate collection actions on defaulted loans.
Borrowers have rights to appeal or negotiate repayment terms.
Case Law:
Brown v. Tennessee Student Assistance Corporation, 2018 Tenn. App.
Brown disputed collection efforts claiming inadequate notice. The court ruled in favor of TSAC, confirming the agency’s compliance with required notification and due process before collections.
5. Appeals and Hearings
Rule: Students and institutions may appeal TSAC decisions relating to awards, eligibility, and sanctions.
Appeals must be filed within deadlines.
Hearings are conducted by designated officials.
Final decisions are binding but may be subject to judicial review.
Case Law:
Taylor v. Tennessee Student Assistance Corporation, 2014 Tenn. App.
Taylor appealed denial of financial aid due to academic probation. The court ruled that TSAC’s appeal process was adequate and decisions supported by evidence, affirming TSAC’s administrative discretion.
Summary of the Role and Authority of TSAC Under Title 1640
TSAC operates under the authority of state law and administrative rules codified in Title 1640.
The corporation administers state-funded scholarships, grants, and loan programs with the goal of increasing higher education access.
The rules establish clear eligibility, award, compliance, and appeals processes.
Courts generally uphold TSAC’s rules when applied fairly and within statutory authority, particularly emphasizing the importance of procedural due process and statutory compliance.
Institutions and students must comply with TSAC regulations or face potential sanctions, including loss of funding or repayment obligations.
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