Current through Register Vol. 35, No. 18, September 24, 2024
All loans shall be repaid to the state together with interest
or forgiven according to the following:
A. If a loan recipient of the Allied Health,
Nursing, Medical, or Osteopathic Student Loan-for-Service Acts completes
his/her professional education and does not serve in a designated shortage area
for a period of at least one year, the department shall assess a penalty of up
to three (3) times the principal due, plus eighteen percent (18%) interest,
unless the department finds acceptable extenuating circumstances for why the
student cannot serve and comply with the forgiveness provisions outlined in
this section.
(1) The full penalty shall apply
unless the circumstances reflect that the penalty should be reduced on a
prorata basis reasonably reached based upon the degree of control which the
recipient has over the decision not to serve. The recipient shall have the
burden of proof.
(2) If the
department does not find acceptable extenuating circumstances for the student's
failure to carry out his/her declared intent to serve in a designated shortage
area in the state, the department shall require immediate repayment of the
unpaid principal amount of the loan plus accrued interest owed the state plus
the amount of any penalty assessed pursuant to this subsection.
(3) In all other cases, loans will bear
interest at seven percent (7%) per year.
B. Loans made to students who fail to
complete their eligible health profession education shall come due together
with interest immediately upon termination of their education. The department,
in consultation with the student, shall establish terms of repayment,
alternative service, or cancellation terms.
C. The contract shall further provide that
immediately upon completion or termination of the student's eligible health
profession education, all interest then accrued due shall be
capitalized.
D. If the borrower,
after completion of their eligible health profession education and any period
of internship and/or residency, serves in one of the designated shortage areas
of the state, loan principal and interest may be forgiven according to the
following formula:
(1) loan terms of one (1)
academic year or less shall require one (1) year of practice in a designated
shortage area; upon completion of service, one hundred percent (100%) of the
principal plus accrued interest shall be forgiven;
(2) loan terms of two (2) academic years
shall require one (1) year of practice in a designated shortage area for each
academic year of the loan; upon completion of the first year of service, fifty
percent (50%) of the principal plus accrued interest shall be forgiven; upon
completion of the second year of service, the remainder of the principal plus
accrued interest shall be forgiven; and,
(3) for loan terms of three (3) academic
years or more, forty percent (40%) of the principal plus accrued interest shall
be forgiven upon completion of the first year of service in a designated
shortage area, thirty percent (30%) of the principal plus accrued interest
shall be forgiven upon completion of the second year of service and the
remainder of the principal plus accrued interest shall be forgiven upon
completion of the third year of service.
E. Recipients must serve a complete year of
service in order to receive credit for that year. The minimum credit for a year
of service shall be established by the department.
F. Subject to applicable statutory
limitations, the department may extend or modify the foregoing repayment
periods for good cause.
G. In the
event it becomes necessary, the department may suspend loan payments using the
following forbearance provisions:
(1) If the
borrower is willing, but financially unable to make payments under the
repayment schedule, the borrower may request forbearance to allow for any of
the following:
(a) a short period during which
no payments are made, interest would continue to accrue;
(b) an extension of time for making payments,
interest would continue to accrue; or
(c) a period during which the borrower makes
smaller payments than were originally scheduled, interest would continue to
accrue on the unpaid principal.
(2) Forbearance following completion of
program, internship, or residency will not be granted for periods extending
beyond six (6) months. The granting of a subsequent forbearance must be
approved by the designated staff representative of the department.
(3) The borrower must submit a written
request accompanied by a financial statement and a consent-waiver for
authorization for current employment and address information concerning the
borrower, and other information as requested.
(4) Deferral of repayment obligation may be
as follows, at the determination of the department:
(a) the borrower is serving up to a maximum
of three (3) years as an active duty member of the armed forces of the United
States;
(b) the borrower is
temporarily totally disabled, for a period not to exceed three (3) years, as
established by sworn affidavit of a qualified physician;
(c) the borrower is seeking but unable to
find full-time employment for a single period not to exceed twelve (12)
months;
(d) the borrower is unable
to secure employment for a period not to exceed twelve (12) months while caring
for a disabled spouse;
(e) the
borrower is unable to satisfy the terms of the repayment schedule while seeking
but unable to find full-time employment in an eligible health profession, in a
designated shortage area, for a single period not to exceed twenty-seven (27)
months; or
(f) other extenuating
circumstances as provided for under the American Family Leave Act.
H. Loans may be prepaid
at any time, subject to the penalty provision set forth in this Section.
Payment on a loan not in repayment may be made in any amount. Payments on a
matured promissory note shall be in the amounts of and be applied on the
principal installments due on such note in the inverse order of the maturities
of such installments, unless otherwise agreed.
I. Authorized charges and fees:
(1) Late charges: Borrower may be charged a
late charge in the amount of five percent (5%) of the installment payment or
five dollars ($5.00), whichever is less, on any payment made later than ten
(10) days after it is due.
(2)
Attorney's fees, other charges, and costs: Borrower shall agree to pay all
reasonable attorney's fees, and other costs and charges necessary for the
collection of any loan amount not paid when due.
J. Borrower has the responsibility to notify
the department in advance of any change of address and of any action which
necessitates reconsideration of a promissory note (the failure to serve in a
designated shortage area, the termination of service in a designated shortage
area, or his/her ceasing to be enrolled in an eligible institution in an
eligible health profession program. Borrower's failure to notify the department
and to execute a promissory note on request shall cause the full amount of
principal and accumulated interest to become due immediately.
