2808.03.02  COLLECTION

Initial collection activities on defaulted short-term loans should include 
submission of the borrower's name to the withholding of services system on 
campus, notice to the borrower of that action, and notice of the possibility of 
further, more severe, collection efforts.  If the written notices and a telephone 
call to the borrower do not result in payment, the institution should use the 
services of an outside collection agency (selected through a bid process 
conducted by the institution) or pursue collection through small claims court 
proceedings. The promissory note, signed at the time of disbursement, should 
disclose that such actions will be taken and should provide for the assessment 
of additional costs of collection.  The borrower's name should be submitted to 
the Franchise Tax Board for possible offset of State tax refunds/lottery 
winnings.