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NIH makes your loan payments |
Once your application is selected for funding, NIH will ask
you to document the student loans you have listed in your application.
You must provide the following documentation for each loan: (1) a
promissory note or
disclosure statement
showing the original terms of the loan and (2) a current
account statement. If you have consolidated your student loans –
or plan to do so –
click here for important information.
After verifying this information, NIH will send you a signed LRP
contract and will make payments quarterly for the next two years
directly to your lenders. NIH makes your loan payments (from the
U.S. Treasury) electronically to your lender and sends you an e-mail
with a request for
payment verification. The verification can be an account update
printed from your lender’s Website or a fax of your current
account statement for your loan.
How Much Will NIH Repay?
NIH uses the following calculation to find your total repayable debt - the total amount of repayment for which you are eligible.
First, NIH sums your qualified student loans and the projected accrued interest on these loans. Together, this total is your " Educational Debt ."
Second, NIH calculates your " participant obligation ," the share of your educational debt that you are required to repay yourself. This is equal to 10% of your annual institutional base salary at the start of the LRP contract. The participant obligation does not change once the contract is in progress - even if your salary changes.
In brief: Educational Debt (Qualified Loans + Projected Interest)
- participant obligation (10% of current base salary )
= Total Repayable Debt
Then, the NIH calculates your award based on the Total Repayable Debt at the start of the contract. The NIH will repay your educational loan debt at the rate of 25% annually, up to a maximum of $35,000 per year. You will receive the maximum annual disbursement only if your repayable debt remains equal to or greater than $140,000 over your LRP contract. For more information on how to calculate your repayable debt, click here.
When you repay your Participant Obligation is between you and your lender.
NIH only requires that you remain current in repaying your student loans.
Tax Payments, Renewal and Order of Repayment
Besides making payments on your loans, NIH pays the IRS directly for the
tax liabilities stemming from your LRP payments.
Click here for details.
During the second year of your contract you may apply for a renewal of one or two years.
NIH does assign priorities for the order in which your student loans
are repaid. Loans guaranteed by the Department of Health and Human
Services get top priority. Next in priority are loans guaranteed by the
U.S. Department of Education – all Stafford,
Perkins, and Federal
consolidation loans.
Then, state-sponsored loans, school-sponsored loans, and private loans are repaid.
Click here for details on payment priorities.
After reviewing your student debt and the order in which NIH will make
payments, you may wish to consider a plan for repayment of all student
debt. For example, your lender can advise you on periods of further
deferment or
forbearance
for loans that won’t be paid off by NIH. NIH requires you to
keep (or restore) your loans in good standing to qualify for LRP payments.
FAQs on Loan Payments
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