Nursing Scholarship Program

Applicant Information Bulletin: School Year 2009-2010
Scholarship Benefits

For applicants signing "Full-Time Student" Contracts, scholarship support will be limited to no more than 4 school years, which includes any partial school year of funding received during the school year.  For applicants signing “Part-Time Student” Contracts, no  participant will receive scholarship benefits that total, in the aggregate, more than 4 years of full-time scholarship support.

All NSP scholarship contracts are for a specific year.  The school year is defined as July 1 through the following June 30 during which an applicant is enrolled in a school.  If, for example, a student is in a 24-month program that begins on August 3, 2009, and he/she signs contracts for 2 school years, the student will receive stipend, ORC and tuition payments through June 30, 2011.  Funding for the extra months of the program beyond June 30, 2011, would require a request for a third year of scholarship funding, and if granted, obligates the recipient to 3 full years of service commitment.  If a student is in a 24-month program that begins on May 3, 2009, and he/she signs contracts for 2 school years, the student will receive a stipend, ORC and tuition payments from July 1, 2009, through June 30, 2011, or the month the recipient completes the required classes for graduation, whichever comes first.  

Tuition and fees will be paid directly to the nursing school that the awardee is attending. 

If tuition and fees for the initial Fall term of the 2009-2010 school year have been paid from another source of financial aid (e.g. Pell Grant, state grants or other scholarships), pending notice of an NSP award, the school may return payments to the source of funding and then submit an invoice to the NSP for payment.  After the initial fall term, if sources of financial aid, other than NSP, have been used to pay for tuition and fees, the school will be instructed not to submit an invoice to the NSP for these costs, but to submit documentation stating that it will not be seeking payment for the term. However, if a balance remains, then the school may submit an invoice for the balance remaining.  Although payments of tuition and fees are made directly to the nursing school, the student is liable for paying taxes on these amounts.  See the “Taxation of the Nursing Scholarship.”

PLEASE NOTE: The NSP will only pay tuition and fees for pre-approved summer school sessions when summer school is an academic term normally required by the school for all students in the same program.

Eligible fees include:

• Academic Support Services Fee 
• Administrative Fee
• Building Use or Facility Fee
• Campus Life Fee
• Computer Lab Fee
• Curriculum Fee
• Disability Insurance (Must be required of all students regardless of source of funding)
• Education Fee
• Graduation Fee in last year of program
• Health Insurance (for students only) (Must be required of all students regardless of source of funding)
• Health Services Fee and Immunizations
• Laboratory Fees
• Library Fee
• Malpractice Insurance if it is mandatory that it be purchased through the school by all nursing students
• Matriculation Fee
• Processing Fee
• Recreation Fee
• Student Activities Fee
• Student Services Fee
• Technology Fee
• University Fee

Ineligible Fees include:

• Accident Insurance
• Attorney Fee
• Automobiles and Automobile Maintenance Expenses and Accident Insurance
• Books (as they are covered by the Other Reasonable Cost payment)
• Certification Boards
• Class Dues
• Counseling Fees
• Dental Insurance
• Educational Associations
• Financial Aid Trust Funds
• ID Maintenance
• Late Charges
• Life Insurance
• NCLEX Review
• Parking Fee
• Penalty Fee
• Personal Laundry
• Post Office Box Rental
• Refundable Property Deposit
• Room and Board Expenses
• Student Association and Union Fee
• Study Abroad Fees
• Testing Fee
• Transportation Fee
• Yearbook

The NSP will not pay for tuition costs unrelated to the degree program, penalty fees for over extension of a distance learning program, membership dues for student societies or associations, loan processing fees, and similar expenses. Also, the NSP will pay ONLY for courses that are required for graduation. Elective courses not required for graduation are not eligible for payment. If an applicant is unsure of what is covered by the Nursing Scholarship, please send a written request for further clarification to HRSA Call Center – NSP, 12530 Parklawn Drive, Suite 350, Rockville, Maryland  20852.

Please be advised that under the Debt Collection Improvement Act of 1996, all Federal payments must be processed through Electronic Funds Transfer/ Direct Deposit. Therefore, all educational institutions must have an electronic funds transfer account which will allow

the Division of Financial Operations (DFO), Program Support Center, Department of Health and Human Services to make electronic payments for tuition and fees in a timely manner.

Receipt of a Nursing Scholarship award does not automatically preclude a participant from receiving funds from other programs, as long as no service commitment is involved. However, many student assistance programs are based on the student's financial need, or may be limited to the payment of expenses already paid by the NSP. The list of NSP recipients supplied to the schools will enable the school officials to reevaluate the financial need or eligibility of these individuals for funds under other aid programs. When continuation of financial assistance under other programs is not warranted, the school is required to reduce or terminate payments. Applicants should contact their financial aid officers to determine how the receipt of a Nursing Scholarship may affect them.

Financial support will be provided to each participant of the NSP for other reasonable educational expenses or costs (ORC) incurred by the student.  A standardized ORC payment is established for a full school year, for a full-time student.  The ORC payment will be reduced proportionately for students who plan to attend less than a full school year (e.g., December graduates).  For part-time students, if funded, the ORC payment will be proportionally reduced. The ORC payment is provided to assist in the payment of the following types of expense:

• Books
• Clinical supplies
• Instruments
• Insurance (Life or Health Insurance) 
• School ID Cards/ID Fees
• Travel
• Uniforms 

The ORC payment will be included in the October stipend payment, which should be received by November 7. 

Stipend Amount

During the 2009-2010 school year, the NSP will pay a full-time student a monthly amount of $1,269.00 (before Federal taxes).  If funded, a part-time student would receive a proportional stipend amount.  The first payment for new awardees should be received by November 7 and will include stipend payments retroactive to July 1 and payment for Other Reasonable Costs.

Receipt of the stipend payment does not mean that the student is employed by the Federal Government or participates in any of the benefits available to Federal employees.

Changes in Schools/Programs

Changes in schools or nursing programs are strongly discouraged once the applicant has been accepted into the NSP.  Changes in schools/programs must be approved, in advance by the Program, to ensure continued eligibility for funding.  Funding will be based on the initial school of record for all school year contracts executed during Fiscal Year 2009.  For example, if the 2009-2010 tuition of the initial school of record is $10,000 and the tuition of the proposed transfer school is $15,000, then the NSP may not have the additional funding of $5,000 to pay the scholar’s full tuition at the proposed transfer school.  Therefore, students should carefully consider the financial implications of school/program transfers.

Taxation of the Nursing Scholarship

All NSP payments made to scholars, or on their behalf to nursing schools, are taxable (26 USC 117(c)).  Although payments of tuition and fees are made directly to the nursing school, the student is liable for taxes owed on these amounts.  The NSP withholds Federal income taxes from the stipend payments and ORC based on the entire amount of the NSP award (tuition, fees, ORC and stipends) and information provided on the W-4 by the scholar. Students who want additional funds deducted from the stipend amount should indicate the additional amount to be deducted on the appropriate line on the W-4 form and please include the hard copy of the W-4 form with the supporting documentation.  We advise students to consult their local tax authority regarding State or local taxes for which they may be liable, as State and local income taxes will not be withheld. It is the responsibility of the scholarship recipient to arrange for the payment of any additional Federal, State, and local taxes that may be owed. Each year, students will receive a 1099 tax form for amounts paid for tuition and fees and a W-2 tax form for amounts paid for stipend and ORC. 

Treasury Offset Program

Under the Treasury Offset Program, the Treasury Department is authorized to offset a student's Nursing Scholarship payments, if the student is delinquent on a Federal debt. In addition, the Treasury Department is authorized to offset Nursing Scholarship payments for application to the student's State debts, including delinquent child support payments.

Non-Delinquency of Child Support Order

In keeping with the President's Executive Orders concerning compliance with child support orders, the NSP stresses the importance of honoring any child support obligations the applicant may have.  Federal payments to a participant may be offset due to delinquencies in court-ordered child support payments.

Termination of Contract

The Secretary of Health and Human Services or his/her designee may terminate a NSP Contract for a school year if the recipient, on or before June 1 of the school year: 1) submits a written request to terminate his or her contract for that school year; and 2) repays all amounts paid to, or on behalf of, that recipient for that school year. If a scholarship recipient does not meet these requirements, he or she will incur a service commitment for the full or partial year of support received, as set forth in the "Fulfilling the Service Commitment" Section of this Bulletin.

Discontinuation of Benefits

The NSP will discontinue the payment of all benefits under the following circumstances:

1. While the recipient is on a leave of absence (for personal, medical or other reasons) which has been approved by the school; 
2. While the recipient is repeating course work for which the NSP has already paid  [Exception: If the student's repeat course work is in addition to new course work and the new course work (excluding the repeated courses) is of sufficient credit hours to meet the definition of full-time student (for participants who signed "Full-Time Student" Contracts) (or the definition of part-time student for participants who sign “Part-Time Student” Contracts), then payment of the monthly stipend will continue, but the NSP will not pay for the course work being repeated;
3. If the recipient withdraws or is dismissed from school. Moreover, the recipient's withdrawal or dismissal from school is also a breach of the scholarship contract, and the recipient will be liable to repay the amount described in the "Defaulting on the Scholarship Commitment – Breach of Contract" section of this Bulletin
4. If the recipient is enrolled as a less than full-time student (for participants who signed "Full-Time Student" Contracts) or as a less than part-time student (for students who sign “Part-time Student” Contracts).  This includes participants who voluntarily withdraw from courses during a semester/quarter and no longer meet the definition of a full-time or part-time student under their applicable Contract; 
5. If the recipient transfers to an ineligible school or program or did not get prior approval from the program, the result may be a discontinuation of benefits and possible default.  Prior to any transfer, it is the recipient’s responsibility to contact the NSP in writing at the Division of Scholar and Clinician Support, 5600 Fishers Lane, 8A-15, Rockville, Maryland 20857 to determine his or her eligibility and to receive approval to continue to receive benefits at the new school/program.   

A recipient is required to notify the Division of Scholar and Clinician Support promptly, by phone and in writing, as soon as one of the following events is anticipated:

• repeat course work;
• a change in the applicant's graduation date;
• a leave of absence approved by the school;
• withdrawal or dismissal from school;
• a change from full-time student status to a less than full-time student status for participants who sign “Full-Time Student” Contracts (a change from part-time student status to less than part-time student status for participants who sign “Part-time Student” Contracts);
• voluntary withdrawal from courses during an academic term; or
• a transfer to another school or program.

The NSP needs to know in advance that the above events may occur, so that timely action can be taken to discontinue or decrease payments (and avoid overpayments), where applicable. The recipient must also submit a letter from the school verifying that one of these events has occurred to the:

Division of Scholar and Clinician Support
5600 Fishers Lane, 8-15
Rockville, Maryland 20857

Please be advised that if the NSP has any questions concerning a participant's eligibility for continued support, the NSP may delay the payment of all benefits to that participant pending clarification of the participant's eligibility status.

Collection of Benefit Overpayments

Scholarship Program payment(s) received by a recipient, including payment(s) made to a school on the recipient's behalf, during the periods while the recipient is on an approved leave of absence, is repeating course work, or is otherwise ineligible to receive payments, are considered overpayments.  Overpayments may also occur due to administrative error.  A participant receiving an overpayment should immediately telephone the Scholarship Support Branch and follow up in writing to make arrangements to promptly return all overpayment(s) to avoid interest accrual and debt collection procedures.

Debt collection procedures include sending delinquent overpayments to a debt collection agency, reporting the overpayments to credit reporting agencies, offsetting Federal and/or State payments due to the participant (e.g., IRS income tax refund) to collect the overpayments, recovery through Administrative Wage Garnishment, and referral of the overpayments to the Department of Justice for enforced collection. For scholars who receive subsequent funding under the NSP and who previously received any overpayments which have not been repaid, the overpayments will be collected through administrative offset. The NSP will withhold scholarship funds payable to, or on behalf of, the recipient (including stipends, ORC, and, if necessary, tuition payments) until the overpayment owed is paid in full. Administrative offset is not a repayment option for scholars who wish to terminate a contract.  

Resumption of Benefits

To resume benefits under existing scholarship contracts, the recipient must submit documentation from a school official confirming that he/she is now eligible to receive scholarship support (e.g., is no longer repeating course work, has returned from a leave of absence, has resumed full-time student status, and the transfer school/program is eligible). Requests for the resumption of scholarship benefits will be considered on a case-by-case basis by the designee of the Secretary of the Health and Human Services, to determine the recipient's eligibility to restart funding. For recipients who have not repaid overpayments previously received, the resumption of scholarship benefits will be subject to the administrative offset described in the "Collection of Benefit Overpayments" section of this Bulletin.  For recipients whose benefits were discontinued due to their withdrawal or dismissal from school or due to their transfer to an ineligible program or school, benefits will not be resumed. 

Effect on Veterans Benefits

Educational benefits from the Department of Veterans Affairs (G.I. Bill) continue along with NSP funds, since these benefits were earned by prior active duty in a uniformed service.

Continuing Support after the 2009-2010 School Year

The NSP award and contract will be for the 2009-2010 school year and additional school years (Optional Contracts) requested by the applicant and agreed to by the Secretary of Health and Human Services or his/her designee as indicated on the signed contracts.  Support will be paid for the years agreed to in the contracts, based on the costs of the initial school of record, provided the student remains eligible to receive NSP support.

If a student signs a contract for only one (1) year of support (2009-2010 school year), his/her scholarship support will be terminated at the end of the 2009-2010 school year (on June 30, 2010). Should the student subsequently decide that he/she would like additional scholarship support for the next school year (2010-2011) and any subsequent school years through graduation, the student must submit a new Verification Report/Data Collection Form and a signed contract for that school year and, if desired, Optional Contracts for subsequent school years through graduation-subject to the 4 year limit on school years of scholarship support.  Awards limited to 4 school years.  "Awards Limited to 4 School Years” in this Bulletin.

Please be advised that since a recipient will incur a 2-year service commitment for one (1) school year of support, it may be in the best interest of the student to sign contracts for 2 years of support, if the student will need scholarship support for all or part of the 2010-2011 school year. The Verification Report/Data Collection Form and the signed contract(s) must be received by no later than May 7 of the year in which support would be continued.

The granting of continuation awards depends upon the:

1. availability of funds for the NSP;
2. current or former participant's continued eligibility to participate in the NSP (good academic standing, not repeating coursework, etc.).  Please be advised that a credit check will be conducted as part of the eligibility process;
3. limitations set forth in "Awards Limited to 4 School Years" in this Bulletin;
4. current or former participant's compliance with procedures established by the NSP for requesting continued support; and
5. participant’s past compliance with program policies and requirements. Participants who are requesting continued support must be able to financially support themselves until the scholarship benefits payment schedule can be reinstated.

Next Section > Fulfilling the Service Commitment