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F. Qualifying Educational Loans
- Loans Qualifying for Repayment - NHSC LRP participants
will receive loan repayment funding to be applied to the
principal, interest, and related expenses of Government
(Federal, State, or local) and commercial loans obtained
by the participant for: school tuition; other reasonable
educational expenses (see Definitions, Section
B of this Bulletin); and reasonable living
expenses (see Definitions,
Section B of this Bulletin).
The loans for tuition and expenses are limited to those
incurred by the participant for undergraduate or graduate
education pursued prior to obtaining a degree in the health
profession in which the participant will satisfy his or
her NHSC LRP service commitment.
If applicants are currently in school working towards
another health professions degree, those loans will
not be considered for NHSC LRP repayment until the applicant
has finished that future degree and applies to participate
in the NHSC LRP in that new health profession.
For example, an applicant currently applying as a Licensed
Professional Counselor (LPC) may only submit educational
loans incurred prior to receipt of the LPC degree.
If the applicant is pursuing further education and incurring
loans towards obtaining his/her Health Service Psychologist
(HSP) degree, only the loans incurred prior to the LPC
degree will be eligible for repayment at this time.
Upon the applicant completing his/her HSP degree,
those loans may become eligible for repayment only if
the applicant reapplies to participate in the LRP as
an HSP.
Applicants must submit the following proof of
their qualifying educational loans: original loan
applications, promissory notes, disclosure Statements,
and Statements from the current holder indicating the
borrower’s name, original amount borrowed, date of original
disbursement, and type of loans. In addition,
include a current account Statement showing your loan
balance. The current account Statement must be dated
not more than 30 days before the postmark date of NHSC
application. Additional loan documentation may
be required during the review process to determine the
eligibility of the loan. We have provided an example
for your convenience. (See examples at the end
of this Bulletin.)
All loans submitted for loan repayment will be verified
to determine whether they are eligible for repayment
under NHSC LRP by contacting lenders and holders and
checking the applicant’s credit report. For former
NHSC LRP awardees, a complete loan payment history of
the previously awarded NHSC LRP funds must be submitted
with the loan documentation.
- Loans Not Qualifying for Repayment
- The following are examples of financial obligations
that do not qualify for repayment by the NHSC LRP:
- loans for which the associated documentation (e.g.,
promissory notes and lender statements) does not identify
the loans as applicable to undergraduate or graduate
education;
- loans not obtained from a government entity or commercial
lending institution (see Definitions, Section
B of this Bulletin). Most loans made by
private foundations or individuals are not eligible
for repayment;
- loans, or that portion of loans, obtained for educational
or living expenses which exceed the school's estimated
standard student budget in the year the loan was made
and the student is unable to substantiate, to the
NHSC LRP's satisfaction, that the excess educational
and/or living expenses were reasonable;
- loans that have been repaid in full;
- loans for residency relocation (e.g., Medex loans);
- PLUS loans (made to parents); and
- personal lines of credit.
3. Consolidated/Refinanced Loans
If eligible educational loans are consolidated and/or refinanced,
the original loan documentation must be submitted to establish
the educational purpose and contemporaneous nature of such
loans. The consolidated/refinanced loan must be from a Government
(Federal, State, or local) or commercial lender and be for
the applicant’s qualifying educational loans only. If an
eligible educational loan is consolidated/refinanced with
any debt other than another eligible educational loan of
the applicant, no portion of the consolidated/refinanced
loan will be eligible for loan repayment.
For eligible loans to remain eligible for the NHSC LRP,
applicants/participants must keep their eligible educational
loans segregated from all other debts. Also, eligible educational
loans should not be consolidated with loans owed by any
other person, such as a spouse or child. Finally,
borrowers should be sure to get a disclosure Statement on
the consolidated loans from their lenders. (See examples
at the end of this Bulletin.)
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Questions? nhsc@discoverylogic.com
or 1-800-638-0824 Monday through Friday (except Federal
holidays) 8:30 am to 5 pm ET.
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