Ind. Code § 21-16-4-14

Sec. 14. Upon default by a borrower on a loan guaranteed under this chapter, and before the commencement of a suit or other enforcement proceedings upon security for the loan, the holder of the guaranteed loan obligation shall promptly notify the commission and the commission shall pay the holder of that loan as soon as the amount is determined. The commission shall determine the amount of loss in accordance with its rules; however, the amount of loss may not exceed the unpaid balance of the principal amount and the unpaid accrued interest.