Code of Maine Rules
94 - INDEPENDENT AGENCIES
457 - FINANCE AUTHORITY OF MAINE (FAME)
Chapter 607 - ACCESS TO MEDICAL EDUCATION AND HEALTH PROFESSIONS LOAN PROGRAMS
Section 457-607-III - HEALTH PROFESSIONS LOAN PROGRAM

Universal Citation: 94 ME Code Rules ยง 457-607-III

Current through 2024-38, September 18, 2024

A. Eligibility. To receive a loan an applicant must:

1. Be a Maine resident.

2. Provide all financial aid information requested by the Authority prior to any deadline established by the Authority and evidence financial need for a loan.

3. Be admitted to a program of allopathic, osteopathic, optometric, veterinary medicine or dentistry at an institution of medical education that has been accredited by the appropriate accreditation agency.

4. Loans may not be used as a substitute for:
a. Subsidized Federal Stafford loans;

b. Federal Perkins loans;

c. Financial aid from funds of an institution;

d. Any other financial aid available from the loan applicant's undergraduate college or university or any professional medical associations;

e. Loans made pursuant to Title VII of the Federal Public Health Service Act, excluding Health Education Assistance Loans;

f. Notwithstanding the foregoing, a financial aid officer from an institution may request that loans from the Authority pursuant to this Rule substitute for any of the financial aid listed if such substitution will be in the best interests of the applicant. Such requests may be granted in the discretion of the chief executive officer. The chief executive officer's decision on such request shall be final.

5. Have obtained a first Program loan prior to January 1, 2011. The loans described herein shall not be available to students occupying positions at schools of allopathic and osteopathic medicine after the 2012-2013 academic year or to any other students after the 2013-2014 academic year.

B. Priority for loans. Awards of loans shall be made according to the following order of priority with loan applications within each priority further prioritized to provide loans to applicants exhibiting the greatest financial need and an intent to practice primary health care, general optometry or large animal veterinary medicine.

1. First priority for loans is for students enrolled in the Access program who are seeking loan renewal and who continue to demonstrate financial need.

2. Second priority for loans is for students of allopathic or osteopathic medicine not enrolled in the Access Program who wish to renew loans and continue to demonstrate financial need.

3. Third priority is for students studying dentistry, optometry, or veterinary medicine.

C. The Authority will determine financial need as follows:

1. For applicants who are under 30 or who have not been independent for financial aid purposes for at least five years, in accordance with the following formula:

Student's Financial Need = Student's Cost of Attendance -

Family Contribution - Other Financial Aid identified in Section III. A.4

2. For applicants who are 30 or older or who have been independent for financial aid purposes for at least five years, in accordance with federal methodology.

D. In no event may a student receive loan funds which when combined with other financial assistance, will exceed the student's cost of attendance at the institution.

E. Agreement Requirements. Each loan recipient must sign an agreement with the Authority including at a minimum each of the following provisions:

1. The loan recipient must provide the annual report to the Authority on forms supplied annually on or before the date indicated by the Authority as the due date.

2. Until the loan is satisfied, the loan recipient must report any change of address to the Authority within four weeks of any address change.

3. Repayment/Forgiveness
a. Upon compliance with all necessary procedures, the following practitioners will be forgiven the greater of 25% of their original outstanding indebtedness under this program or up to $7,500 for each full year of practice during the repayment period:
(1) Primary health care physicians and general dentists practicing in a designated health professional shortage area; except that primary health care physicians and general dentists practicing in the State, but not in a designated health professional shortage area, will be forgiven the greater of 12.5% of their original outstanding indebtedness under this program or up to $3,750 for each full year of practice during the repayment period;

(2) Any physician practicing in an underserved specialty;

(3) Any physician providing services to a designated underserved group;

(4) Veterinarians providing services to Maine residents with insufficient veterinary services.

b. Upon compliance with all necessary procedures, any loan recipient completing a primary health care residency program in the State will be forgiven 50% of the original indebtedness for each year of primary health care practice in a designated health professional shortage area, or as a physician providing services to an underserved group or 25% of the original outstanding indebtedness for each year of primary health care practice in the State not in a designated health professional shortage area or providing services to an underserved group.

c. The repayment period will begin six (6) months following completion of professional education, or upon withdrawal from school for whatever reason. The loan recipient is responsible for notifying the Authority of such completion of professional education or withdrawal from school.

d. Payments must be made in monthly installments on a repayment schedule established by the Authority.

e. Interest will begin to accrue at the beginning of the repayment period. The first monthly installment will be due one month following the date determined as the beginning of the repayment period.

f. Loan recipients may receive partial loan forgiveness on a pro rata basis if they fulfill all the criteria but maintain the appropriate practice for less than a full calendar year. The accrual of interest will commence one month after the cessation of a practice situation allowing for forgiveness of a loan. Cash payments will be due four months after the cessation of a practice situation allowing for forgiveness of the loan.

g. (Repealed effective May 5, 1996)

h. Loan recipients who practice in a situation which does not qualify them to receive forgiveness of their loan and later establish a practice which qualifies them to receive forgiveness during the ten (10) year repayment period may reduce the balance due through return service. Any monies due and payable for the time spent in the practice ineligible for forgiveness must be paid in cash and will not be forgiven for return service in Maine. Each year of return service will reduce the remaining balance including accrued interest by the greater of $7,500 or 25% of the total original indebtedness.

i. The Authority may, in the discretion of the chief executive officer, refuse to credit all or any part of forgiveness of any loan if the loan recipient fails to return the annual report or any information requested by the Department of Health and Human Services by the due date which shall be no less than 30 days after the mailing of the annual report by the Authority.

j. The Department of Health and Human Services, Office of Rural Health and Primary Care or any agency or bureau succeeding to its responsibilities may require a loan recipient requesting loan forgiveness or an interest rate benefit, excluding veterinarians, to report annually the level of service provided by the loan recipient to Medicaid and Medicare patients and in public health clinics. If the Office of Rural Health and Primary Care determines that such level of service provided was not reasonable, the Authority may refuse to grant any loan forgiveness or interest rate benefit for the period of the loan.

4. Default. If a payment is not made within 30 days following the due date the Authority may declare the loan in default and give the loan recipient 30 days to cure the default. If the loan recipient fails to cure the default after 30 days notice, the Authority may declare the entire amount due and payable including attorney's fees.

5. Deferment
a. Deferments during the repayment period may be granted by the chief executive officer. A written request must be made to the chief executive officer requesting a deferment by a student. The request must state the justification for the deferment and must include all supporting documentation. Deferments will be decided on a case by case basis. The decision of the chief executive officer shall be final. Deferments may be granted for each of the following reasons:
(1) The temporary disability of the borrower;

(2) The student's temporary inability to meet the requirements necessary to obtain forgiveness of the loan, if the student evidences the intent to pursue one of the forgiveness provisions;

(3) The demonstration of the student that immediate repayment of the loan will cause an undue hardship, as determined by the chief executive officer;

(4) Such other reasons as the chief executive officer may approve.

b. A deferment will not ordinarily be granted for a period greater than one year. However, upon request of the student, the chief executive officer may renew any deferment on a case-by-case basis.

c. During the period of an approved deferment, simple interest will be assessed at the same rate set forth in the promissory note executed by the loan recipient. At the conclusion of the deferment period the total outstanding balance including principal and interest shall be repaid either through return service or cash payments within the years remaining in the ten (10) year repayment period.

6. Loan Term. Loans must be repaid over a term no greater than ten years. The term may be extended upon a finding by the chief executive officer that such an extension is necessary to assure the repayment of the loan.

7. Maximum Loan Amount
a. Loans to loan recipients participating in the Access to Medical Education program may not exceed $25,000. Notwithstanding the financial need of the students, the Authority may, in the discretion of the chief executive officer, provide loans of a lesser amount based on demand for loans, the actual funds available, and such other factors as the chief executive officer deems to be material.

b. Loans to all other loan recipients, including contract students who have entered into an Agreement with the Authority pursuant to 20-A M.R.S.A. §11804-A may not exceed the lesser of $10,000 or 60% of the student's tuition annually.

c. For the purposes of determining terms of repayment and forgiveness, all loans made under this section III shall be combined.

8. Interest Rate
a. (Repealed effective May 5, 1996)

b. (Repealed effective May 5, 1996)

c. Any loan recipient who maintains a practice in the State, but who does not devote 75% or more of the practice to the provision of primary care and is not eligible for forgiveness pursuant to section III. E.3 shall owe the Authority interest at the rate of the then current rate applicable to the federal Stafford loan program or any successor thereto minus 1.5% per annum computed as simple annual interest and fixed at the time the loan recipient signs the initial note, which rate will be applicable to all renewal notes.

d. Any loan recipient who does not maintain a practice in the State shall owe the Authority interest at the rate of the then current rate applicable to the federal Stafford loan program or any successor thereto plus 1.5% per annum computed as simple annual interest and fixed at the time the loan recipient signs the initial note, which rate will be applicable to all renewal notes.

e. No interest shall accrue on the loan recipient's indebtedness while the loan recipient maintains a practice which entitles the loan recipient to receive forgiveness pursuant to section III. E.3.a or b.

F. Notwithstanding anything herein to the contrary, loan recipients who withdrew from professional education or who no longer reside in Maine are not required to provide annual reports to the Authority.

G. Loan recipients may receive partial loan forgiveness on a pro rata basis for eligible employment of at least 20 hours per week.

H. Death or Permanent Disability. On the death of a loan recipient as evidenced by a certified death certificate or on the total and permanent disability of a loan recipient, as certified by a licensed physician, all amounts remaining due from the recipient will be forgiven.

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