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To: Lenders, holders, servicers, and schools participating in the Health Education Assistance (HEAL) Program
Subject: (1) New HEAL Refinancing
Loan Application/Promissory Note Form; (2) Borrower Deferment Form Revision;
and (3) Refinancing Eligibility of Borrower with One HEAL Loan
Lender Policy Memorandum L-1999-4
School Policy Memorandum S-1999-4
Public Law 105-392, the Health Professions Education Partnerships Act of 1998 amended HEAL legislative provisions which made it necessary to revise certain official HEAL forms. Revised forms are attached to this memorandum.
HEAL Refinancing Loan Application/Promissory Note Form
A new HEAL Refinancing Loan Application/Promissory Note Form (HRSA-550) was developed, with the assistance of refinancing lenders, to make the refinancing process easier for all parties and to eliminate previous items collected on the old form that were not necessary for a refinanced loan or were easily obtained by the lender and the Department from other sources. The new form is specifically designed to obtain essential information from the applicant, including current address, telephone numbers, when and if they graduated, employer information, and current references. It also contains an authorization by the applicant to allow his/her current lenders to release HEAL loan information to refinancing lenders. The promissory note portion provides the lender with legal documentation of each loan awarded to a borrower and the lender and borrower with the legally binding terms of the refinanced loan.
Effective May 1, 1999, all refinancing lenders are to use this form when initiating and completing a refinancing loan transaction. If telephone applications are in use, the final documentation given to the borrower to sign should resemble this form. New forms, in small quantities, will be available from the HEAL Program starting May 1, 1999. Refinancing lenders desiring a “camera” copy of this form in order to print their own form should contact Ms. Terri Ehrenfeld of the HEAL Program at (301) 443-1540.
Borrower Deferment Form Revision
The Borrower Deferment Form (HRSA-508) has been revised to include the new deferment provision included in Public Law 105-392, the Health Professions Education Partnerships Act of 1998. The authority provides for deferment not in excess of three years during which the borrower is providing health care services to Indians through any health program or facility funded in whole or part by the Indian Health Service for the benefit of Indians. The provision applies to service provided on or after February 1, 1999. A borrower who checks this box on the form must have an official familiar with the funding of the health program or facility certify that the program or facility meets the “Indian Health Service” funding criteria spelled out in the legislation. Schools, lenders, and servicers are reminded that a borrower must complete a deferment form annually.
The use of this form is effective immediately. The attached form may be reproduced, however, please remember that there is a front and back page to this form. Any school, lender, holder, or servicer requesting a clearer copy of the borrower deferment form should contact the HEAL Program at (301) 443-1540.
Refinancing Eligibility of Borrower with One HEAL Loan
Section 706(e) of the Public Health Service Act was amended with the enactment of Public Law 105-392, the Health Professions Education Partnerships Act of 1998. This section now provides the authority for a borrower who obtained only one HEAL loan to refinance that HEAL loan. Heretofore, a borrower had to have two or more HEAL loans to refinance. The HEAL Program is prepared to provide a disk or tape of the eligible borrowers with one loan to refinancing lenders upon their request.
If you have any questions regarding this policy memorandum, please contact Ms. Terri Ehrenfeld of the HEAL Program at (301) 443-1540.
Stephen J. Boehlert
Associate Division Director, HEAL
Division of Student Assistance
