|
|
|
J. BREACHING THE
NHSC LRP CONTRACT
- A participant who breaches the NHSC LRP contract by
failing to begin or complete the required NHSC LRP service
will be placed in default and obligated to pay the United
States an amount equal to the sum of the following:
- the amount of loan repayments paid to the participant
representing any period of obligated service not
completed; and
- $7,500 multiplied by the number of months of obligated
service not completed; and
- interest on the above amounts at the maximum legal
prevailing rate, as determined by the Treasurer of
the United States, from the date of breach; except
that the minimum amount the United States is entitled
to recover will not be less than $31,000.
- Any amounts the United States is entitled to recover,
as set forth above, must be paid within one year from
the date of default. Failure to pay the NHSC LRP
debt by the due date has the following consequences:
- The debt will be reported to credit reporting
agencies— During the one-year repayment period,
the debt will be reported to credit reporting agencies
as “current.” If the debt becomes past due,
it will be reported as “delinquent.”
- The debt may be referred to a debt collection
agency and the Department of Justice—Any NHSC
LRP debt past due for 45 days may be referred to a
debt collection agency. If the debt collection
agency is unsuccessful in collecting payment in full,
the debt will be referred to the Department of Justice
for enforced collection.
- Administrative offset—Federal and/or State
payments due to the participant (e.g., an IRS income
tax refund) may be offset by the Department of Treasury
to repay a delinquent NHSC LRP debt. Also, recovery
through Administrative Wage Garnishment may be enforced
to repay a delinquent NHSC LRP debt.
- Bankruptcy - A financial obligation under
the NHSC LRP may only be discharged in bankruptcy
if the discharge is granted more than seven years
after the due date and only if a bankruptcy court
determines that the non-discharge of the debt would
be unconscionable.
next page:
Suspension, Waiver, Cancellation
and Termination
Questions? nhsc@discoverylogic.com
or 1-800-638-0824 Monday through Friday (except Federal
holidays) 8:30 am to 5 pm ET.
|