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INTRODUCTION TO STUDENT FINANCIAL AID GUIDELINES

PURPOSE

Congress has authorized the health professions and nursing student financial aid programs, which are administered by the Department of Health and Human Services under Titles VII and VIII of the Public Health Service Act. The Department executes its oversight responsibilities of these programs through its Division of Student Assistance which issues regulations and conducts audits and program reviews. However, the Department's Division of Student Assistance also provides certain services directly to institutions and students that include responding to individual inquiries, sponsoring workshops for postsecondary school administrators, disseminating policy memoranda, and producing publications. To facilitate the Division's communication with institutions, it plans to instruct each institution to designate one official to receive all publications, policy memoranda and other mailings and to be responsible for distributing them to appropriate personnel within the school.

Student Financial Aid Guidelines is one such publication. By serving as a handbook, a reference tool, and even an in-house training document, Guidelines will assist financial aid administrators and fiscal officers to work together in the management of the Title VII and Title VIII student assistance funds. This edition incorporates up-to-date information from statute, regulation and policy memoranda and recommends good management practices beyond explicit government requirements. As the programs change, the Division of Student Assistance will update the Guidelines as necessary. Users are reminded, however, that Guidelines serves as an adjunct resource and is not a substitute for the law or published rules.

As in the previous edition, Guidelines is organized into three headings:

Health Professions Programs	Nursing Programs	Fiscal Management
· Health Professions Student Loan (HPSL)	· Nursing Student Loan Program (NSL)	· Accounting Procedures
· Loans for Disadvantaged Students (LDS)	· Scholarships for Disadvantaged Students (SDS)	· Collections
· Primary Care Loan (PCL)		· Program Monitoring
· Health Education Assistance Loan (HEAL)		· Audits
· Exceptional Financial Need Scholarship (EFN)
· Financial Assistance for Disadvantaged Health Professions Students (FADHPS)
· Scholarships for Disadvantaged Students (SDS)


INSTITUTIONAL ELIGIBILITY REQUIREMENTS
Requirements	HPSL	LDS	PCL	HEAL	EFN	FADHPS	SDS	NSL
Disciplines	·Allopathic Medicine* ·Osteopathic Medicine* ·Dentistry ·Veterinary Medicine ·Optometry ·Pharmacy ·Podiatric Medicine *Students funded prior to July 1, 1993 may continue to receive HPSL. (See PCL column.)	·Allopathic Medicine ·Osteopathic Medicine ·Dentistry ·Veterinary Medicine ·Optometry ·Pharmacy ·Podiatric Medicine	·Allopathic Medicine ·Osteopathic Medicine (for students receiving their first loan on or after July 1, 1993)	·Allopathic Medicine ·Osteopathic Medicine ·Dentistry ·Veterinary Medicine ·Optometry ·Pharmacy ·Podiatric Medicine ·Public Health ·Chiropractic ·Health Administration ·Clinical Psychology	·Allopathic Medicine ·Osteopathic Medicine ·Dentistry	Same as EFN	·Allopathic Medicine ·Osteopathic Medicine ·Dentistry ·Veterinary Medicine ·Optometry ·Pharmacy ·Podiatric Medicine ·Public Health ·Allied Health ·Clinical Psychology ·Nursing	·Nursing
Institutional Application for Federal Capital Contribution or Grant Funds	Institution must: ·submit application as required by the Secretary of Health & Human Services ·submit data as required	Same as HPSL, plus institution must: ·provide information to show that school meets qualifying criteria	Same as HPSL	Does not apply	Institution must: ·identify & rank eligible applicants ·provide cost of attendance information	Same as EFN	Institution must: ·provide information to show that school meets qualifying criteria	Same as HPSL
INSTITUTIONAL ELIGIBILITY REQUIREMENTS (cont.)
Requirements	HPSL	LDS	PCL	HEAL	EFN	FADHPS	SDS	NSL
Institutional Awarding Requirements	Awards are made: ·in proportion to student populations at all schools	Same as HPSL	Same as HPSL	Does not apply	Awards are made: ·round-robin to eligible schools until funds are expended	Awards are made: ·round-robin to eligible schools until each eligible school receives one award ·remaining funds awarded to schools that achieve 20% increases in first year enrollment of disadvant-aged students	Awards are made based on proportion of disadvantaged populations at all schools	Same as HPSL
Default Performance Standard	5% or less for schools to continue participation	Same as HPSL	Same as HPSL	5% or less for schools to avoid risk-sharing costs	Does not apply	Does not apply	Does not apply	Same as HPSL
INSTITUTIONAL ELIGIBILITY REQUIREMENTS (cont.)
Requirements	HPSL	LDS	PCL	HEAL	EFN	FADHPS	SDS	NSL
Penalty to School for Non-Compliance with Default Rate Performance Standard	Leads to suspension and termination	Same as HPSL	Same as HPSL	·No penalty for schools with defaults = or <5% ·Schools with default rates of >5% up to 10% must pay a 5% insurance premium on each disbursement ·Schools with default rates of >10% up to 20% must pay a 10% insurance premium on each disbursement ·Schools with default rates >20% are ineligible to participate	Does not apply	Does not apply	Does not apply	Same as HPSL
Location of the Institution	Institution must be in a State, which includes DC, Puerto Rico, U.S. Trust Territories	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL
INSTITUTIONAL ELIGIBILITY REQUIREMENTS (cont.)
Requirements	HPSL	LDS	PCL	HEAL	EFN	FADHPS	SDS	NSL
Accreditation	Required	Required	Required	Required	Required	Required	Required	Required
Written Agreement between the Secretary of Health & Human Services and the Institution	Required	Required	Required	Required	Required	Required	Required	Required
Drug-Free Workplace, Schools and Campuses	Schools must fulfill legal requirements	Same as HPSL	Same as HPSL	Does not apply	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL
Non-Delinquency Of Institution on Federal Debt	Required	Required	Required	Required	Required	Required	Required	Required
Lobbying and Disclosure of Lobbying	Schools must adhere to restrictions and disclosure requirements	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL	Required	Same as HPSL	Same as HPSL
Debarment, Suspension, etc. from Transactions with Federal Departments and Agencies	Schools must certify that they or their principals are not debarred, suspended, etc.	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL


STUDENT ELIGIBILITY REQUIREMENTS
Requirements	HPSL	LDS	PCL	HEAL	EFN	FADHPS	SDS	NSL
Citizenship Status	U.S. citizen or permanent resident (includes Trust Territory of the Pacific, Northern Mariana Islands, American Samoa, Virgin Islands, Puerto Rico and Guam)	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL
Academic Status	Good standing required	Same as HPSL	Same as HPSL	Same as HPSL	Does not apply, but good standing defined by school preferable	Same as EFN	Same as EFN	Same as HPSL
Enrollment Status	Full-time students only	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL	Same as HPSL	·Full-time and half-time students
Selective Service Registration	Required	Required	Required	Required	Does not apply	Does not apply	Does not apply	Does not apply
STUDENT ELIGIBILITY REQUIREMENTS (cont.)
Requirements	HPSL	LDS	PCL	HEAL	EFN	FADHPS	SDS	NSL
Financial Need	·All recipients must show need according to the need analysis formula in Title IV of the Higher Education Act ·All student's resources known to the school must be taken into account ·Parents' information required even for independent students	Same as HPSL	Same as HPSL	·Need determined according to the need analysis formula in Title IV of the Higher Education Act ·All student's resources known to the school must be taken into account	·All recipients must demonstrate exceptional financial need (the lesser of $5,000 EFC or 1/2 COA) ·Need must be determined using the need analysis formula in Title IV of the Higher Education Act ·Parents information required even for independent students	Same as EFN	·Need determined according to the need analysis formula in Title IV of the Higher Education Act ·All student's resources known to the school must be taken into account	·Need determined according to the need analysis formula in Title IV of the Higher Education Act ·All student's resources known to the school must be taken into account
Disadvantaged Background	Does not apply	Required	Does not apply	Does not apply	Does not apply	Required	Required	Does not apply
Service Commitment	Does not apply	Does not apply	Required in primary health care	Does not apply	Required in primary health care	Required in primary health care	Does not apply	Does not apply
STUDENT ELIGIBILITY REQUIREMENTS (cont.)
Requirements	HPSL	LDS	PCL	HEAL	EFN	FADHPS	SDS	NSL
Financial Aid Transcript	Required	Required	Required	Required	Does not apply	Does not apply	Does not apply	Required
Credit-worthiness	Does not apply	Does not apply	Does not apply	Required	Does not apply	Does not apply	Does not apply	Does not apply


TERMS AND CONDITIONS OF SCHOLARSHIP AND LOAN PROGRAMS
Terms and Conditions	HPSL	LDS	PCL	HEAL	EFN	FADHPS	SDS	NSL
Maximum Loan or Scholarship	·Annual:Cost of attendance. ·Aggregate: No maximum limit ·Exception: 3rd & 4th year allopathic & osteopathic medical students are eligible for awards beyond the annual max. to pay off previous educational debt other than HPSL, LDS, or PCL	Same as HPSL	Same as HPSL	·Academic year (9 months): $12,500 or $20,000 depending on discipline ·Aggregate: $50,000 or $80,000 depending on discipline	·Annual: Awards to cover tuition and other reasonable educational costs, but does not include cost of living expenses ·Aggregate: Does not apply	·Annual: Same as EFN ·Aggregate: Does not apply	·Annual: Award may not exceed student's financial need ·Aggregate: Does not apply	·Annual: ·$2,500 for students prior to their last two years of study ·$4,000 for students in their last two years of study ·Aggregate: $13,000
Service Commitment Required	None	None	Requires: ·completion of primary health care residency within 4 yrs. of graduation; AND ·practice in primary health care until the loan is repaid	None	Requires: ·completion of primary health care residency within 4 yrs. of graduation; AND ·5 yrs. of practice in primary health care	Same as EFN	None	None
TERMS AND CONDITIONS OF SCHOLARSHIP AND LOAN PROGRAMS (cont.)
Terms and Conditions	HPSL	LDS	PCL	HEAL	EFN	FADHPS	SDS	NSL
Interest Rate	·5%	Same as HPSL	Same as HPSL, except that borrowers who fail to fulfill the primary health care residency & practice requirements will be charged 18% interest, compounded annually	·Interest rate determined quarterly ·Maximum rate: Variable or fixed int. rate based on average 91-Day Treas. Bills in the previous quarter + 3% rounded to next higher 1/8 of 1% ·Compounds no more than annually	If borrower does not fulfill service obligation, then he/she must repay the full amount of the scholarship within 3 yrs. at prevailing interest rate	Same as EFN	Does not apply	Same as HPSL
Grace Period	12 months	Same as HPSL	Same as HPSL	9 months	Does not apply	Does not apply	Does not apply	9 months
Minimum Repayment	$40 per month	Same as HPSL	Same as HPSL	Generally, not less than the interest that accrues annually. However, repayment options with lender may be available	Does not apply	Does not apply	Does not apply	Same as HPSL
Length of Repayment	10-25 years	Same as HPSL	Same as HPSL, except that borrowers who fail to fulfill the primary health care residency & practice requirements must repay the loan in 3 yrs.	10 to 25 years	Within 3 yrs. if recipient defaults on service obligation	Same as EFN	Does not apply	10 years with an option for 10 more years for cured defaults.
TERMS AND CONDITIONS OF SCHOLARSHIP AND LOAN PROGRAMS (cont.)
Terms and Conditions	HPSL	LDS	PCL	HEAL	EFN	FADHPS	SDS	NSL
Deferment Options	·Full-time enrollment ·Active duty in a uniformed service ·Peace Corps ·Internship and residency ·Fellowships	Same as HPSL	Same as HPSL,	·Full-time enrollment ·Active duty in the Armed Forces ·Peace Corps ·VISTA ·NHSC ·Internship and residency ·Fellowships ·Primary health care practice ·Following graduation from chiropractic school ·Health care to Indians	Does not apply	Does not apply	Does not apply	·At least half-time enrollment in a nursing program ·Active duty in a uniformed service ·Peace Corps volunteer
Repayment Options	·Equal installments ·Graduated repayments ·Federal Loan Consolidation ·Prepayment without penalty	Same as HPSL	Same as HPSL, except PCL is not eligible for Federal Loan Consolidation	Same as HPSL, except that ·interest on HEAL loans under Federal Loan Consolidation is not subsidized ·income-contingent repayment is available for 1st 5 yrs of repayment ·HEAL-to-HEAL consolidation of borrower's HEAL loans with a single holder is available	Does not apply	Does not apply	Does not apply	Same as HPSL, except NSL is not eligible for Federal Loan Consolidation
TERMS AND CONDITIONS OF SCHOLARSHIP AND LOAN PROGRAMS (cont.)
Terms and Conditions	HPSL	LDS	PCL	HEAL	EFN	FADHPS	SDS	NSL
Forbearance	Granted at the option of the school when the borrower is having financial difficulties	Same as HPSL	Same as HPSL	·Granted during periods when the borrower is unable to make scheduled payments ·Limited to 2 years at 6-month intervals at the option of the lender (may be longer with Government approval)	Does not apply	Does not apply	Does not apply	Same as HPSL
Renegotiation	·Permitted when the borrower is unable to make repayments according to the original schedule ·Does not increase the 10-year limit for repaying the loan	Same as HPSL	Same as HPSL	Does not apply	Does not apply	Does not apply	Does not apply	Same as HPSL
TERMS AND CONDITIONS OF SCHOLARSHIP AND LOAN PROGRAMS (cont.)
Terms and Conditions	HPSL	LDS	PCL	HEAL	EFN	FADHPS	SDS	NSL
Cancellatio n	·Death ·Permanent and total disability	Same as HPSL	Same as HPSL; In addition: ·Waiver of service obligation when borrower terminates medical study before graduation and does not resume study ·Suspension of service obligation during period between borrower's termination of medical study before graduation and resumption of medical study ·Note: waiver or suspension of service obligation still requires the borrower to repay the PCL loan.	Same as HPSL	Waiver of service/repa yment obligations when: ·compliance is impossible, or would create extreme hardship; AND ·enforcement would be unconscion-able	Same as EFN	Does not apply	Same as HPSL