Upon receipt of such a request for services where there is an outstanding debt due the institution from that person, the institution shall notify the person by registered mail addressed to his last known mailing address, that the services will not be provided since there is an outstanding debt due the institution and, further, that until that debt is paid in full or arrangements are made to pay the debt over time, no such services as are requested will be provided the individual. If the outstanding debt is due the institution from an employee, the institution shall notify the employee by registered mail addressed to his last known address of the debt owed to the institution, the basis of the debt, and the intent to offset it against the wages or other payments due the employee.