(1) Upon receiving a request for services where there is an outstanding debt due the institution from the requesting person, the institution shall notify the person by first-class mail that the services will not be provided since there is an outstanding debt due. The person shall be told that until the debt is satisfied, no such services as are requested will be provided.

(2) The letter of notification shall also state that the person has a right to a brief adjudicative proceeding before a person designated by the president of the institution. The proceeding must be requested within twenty days of the date of mailing notification of refusal to provide services.