R434-45-8. Loan Repayment Contract Breach, Repayment and Penalties

  (1) If recipient fails to complete the service obligation, he shall:

  (a) Pay a penalty twice the total amount of the award, on a prorated basis, according to a schedule established by the loan repayment contract;

  (b) Pay 12% annum interest on the unpaid penalty; and

  (c) Pay all costs and expenses incurred, including attorney fees, in collection of penalty.

  (2) If recipient is in breach of contract he shall begin to repay within 30 days of breach.

  (3) If recipient does not begin to repay within 30 days, the Department may submit for immediate collection of the total amount of the penalty.

  (4) Recipient shall repay the penalty in no less than one year of breach of contract.

  (5) Recipient shall make quarterly payments, no less than one-fourth of the total amount of the penalty.

  (6) The total amount of the penalty shall be determined from the end of the month in which breach of contract was made.

  (7) Recovered funds and damages collected under this section shall be deposited as dedicated credits to be used to carry out the provisions of the act.