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ist begin one year after the stuses to be a full-time student. a borrower reenters the same or school as a full-time student the 1-year period, the date upon Interest will accrue and the ret period will begin will be deaced by the date on which the stu

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st ceases to be a full-time stuthat school.

he following periods will be exfrom the 10-year repayment pe

l periods for up to a total of 3 of active duty performed by the er as a member of the Army, Air Force, Marine Corps, Coast National Oceanic and AtmosAdministration Corps or the ublic Health Service Corps; All periods for up to a total of 3 of service as a volunteer under ace Corps Act;

All periods of advanced profestraining including internships esidencies, except as specified in raph (a)(2)(vi) of this section;

All periods during which the boris pursuing a full-time course of at an eligible health professions 1;

A period not in excess of 2 years g which a borrower who is a fullstudent in a health professions

ment leaves the school, with the in

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to return to such school as a fullstudent, to engage in a full-time ational activity which is directly ed to the health profession for h the individual is preparing. To fy for such deferment, the fulleducational activity must be one

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Is part of a joint-degree program formal program of joint study in unction with the health profession which the borrower is preparing at

Watchool; or

at Is an activity which will enhance

borrower's knowledge and skills in health profession for which the borer is preparing at the school, as denined by the school.

borrower must request such erment from the school in which he she is enrolled no later than 60 days or to leaving such school to engage the full-time educational activity. de school must then determine, no

later than 30 days prior to the borrower's leaving such school, whether the borrower qualifies for such deferment. A borrower who qualifies for this type of deferment receives the grace period upon completion or termination of his or her studies leading to the first professional degree in the health discipline being pursued. If the borrower fails to return to school, the school retroactively must begin the borrower's grace period based on the date the borrower terminated his or her studies at the school, and must begin the repayment period immediately following the end of the grace period; and

(vi) A period not in excess of 2 years during which a borrower who is a graduate of a health professions school participates in:

(A) A fellowship training program which is directly related to the health profession for which the borrower prepared at the school, as determined by the school from which the borrower received his or her loan, and is engaged in by the borrower no later than 12 months after the completion of the borrower's participation in advanced professional training as described in paragraph (a)(2)(iii) of this section, or prior to the completion of such borrower's participation in such training. To qualify for such deferment, the fellowship training program must be one which:

(1) Is a full-time activity in research or research training or in health care policy; and

(2) Is a formally established fellowship program which was not created for a specific individual; or

(B) A full-time educational activity which is directly related to the health profession for which the borrower prepared at the school, as determined by the school from which the borrower received his or her loan, and is engaged in by the borrower no later than 12 months after the completion of the borrower's participation in advanced professional training as described in paragraph (a)(2)(iii) of this section, or prior to the completion of the borrower's participation in such training. To qualify for such deferment, the fulltime educational activity must be one which:

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(1) Is part of a joint-degree program in conjunction with the health profession for which the borrower prepared at the school; or

(2) Is required for licensure, registration, or certification in the health profession for which the borrower received the HPSL loan; or

(3) Is a full-time educational program in public health, health administration, or a health care discipline directly related to the health profession for which the borrower received the loan.

(3) To receive a deferment, a borrower must, no later than 30 days prior to the onset of the activity (or no later than 30 days prior to the due date of the first payment if the borrower begins the activity during the grace period), and annually thereafter, provide the lending school with evidence of his or her status in the deferrable activity, and evidence that verifies deferment eligibility of the activity. This evidence must include certification by the Program Director or other authorized official that the borrower's activity meets the deferment requirements. The borrower must also notify the school upon completion or termination of the activity. It is the responsibility of the borrower to provide the lending school with all required information or other information regarding the requested deferment. The school may deny a request for deferment if it is not filed in accordance with the requirements of this section.

(4) Subject to the provisions of paragraph (b)(3) of this section, a borrower must establish a repayment schedule with the school providing for payments not less often than quarterly. Any borrower whose repayment is delinquent more than 60 days must establish a monthly repayment schedule with the school. However, a borrower may at his or her option and without penalty, prepay all or part of the principal and accrued interest at any time.

(5) A school may grant forbearance whenever extraordinary circumstances such as unemployment, poor health or other personal problems temporarily affect the borrower's ability to make scheduled loan repayments.

(b)(1) Each school at which a fund is established must exercise due diligence

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(1) Conduct and documen (Vi trance interview (individual may groups) with the borrower protectio bursing HPSL funds in an (ix) year. During the entrance agai the school must obtain docume tem which indicates that the bothe aware of the rights and respons appr associated with HPSL funds litig sonal information which wond in locating the borrower if he (x) fails to keep the school informatean or her current address. The Cour ments of this subparagraph In by correspondence, if the schoo dur mines that a face-to-face mestit dividually or in groups) is ine ble.

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(ii) Conduct and document tive interview (individually or in wri with the borrower. During interview, the school must pro each borrower with informat“ Ju essary to carry out the terms d 198 ment, remind the borrower fail rights and responsibilities as any with HPSL funds, and update lue sonal information collected disbursing HPSL funds which 141 sist in locating the borrower Day she fails to keep the school infer his or her current address. If that rower terminates studies with vance notice, the school must ment attempts to inform the bo of the substance of the exit intere and to secure exit interview in tion from the borrower by mail.

(iii) Notify the borrower in writ the impending repayment obligat least twice during the grace perio

(iv) Notify a borrower who deferment status in writing of the pending repayment obligationi months prior to the expiration approved period of deferment (v) Perform regular hi

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low up past due payments eries of at least four docuand reasonably spaced atO contact the borrower, at e of which must be in writing nore than 30-day intervals, the loan becoming 120 days provided that the school has address for the borrower; erform address searches when ";

Jse collection agents, which ude the use of an internal colgent;

nstitute legal proceedings borrowers after all other att collection have failed, unless sol determines, subject to the of the Secretary, that such a would not be cost-effective;

come a member of a credit bunotify the credit bureau of acast due by more than 120 days.

of one or more of the proceitlined above schools may subcollection techniques that are

or more effective, but only ey have demonstrated the effecof the techniques and obtained approval from the Secretary. te charge. (i) For any health ons student loan made after ), 1969, but prior to October 22, e school may fix a charge for of the borrower to pay all or art of an installment when it is 1, in the case of a borrower who led to deferment under section of the Act, or cancellation or reat under section 741(f) of the r any failure to file timely and ctory evidence of the entitleThe amount of the charge may Aceed $1 for the first month or of a month by which the installor evidence is late and $2 for each #ding month or part of a month. school may elect to add the t of this charge to the principal at of the loan as of the day after ay on which the installment or ice was due, or to make the at of the charge payable to the A no later than the due date of the installment following receipt of otice of the cha by the bor

(ii) For any health professions student loan made on or after October 22, 1985, the school shall assess a charge for failure of the borrower to pay all or any part of an installment when the loan is more than 60 days past due and, in the case of a borrower who is entitled to deferment under section 741(c) of the Act, for any failure to file satisfactory evidence of the entitlement within 60 days of the date payment would otherwise be due. No charge may be made if the loan is less than 61 days past due. The amount of this charge may not exceed an amount equal to 6 percent of the amount due at the time the charge is calculated. The school may elect to add the amount of this charge to the principal amount of the loan as of the day on which the charge is calculated, or to make the amount of the charge payable to the school no later than the due date of the next installment following receipt of the notice of the charge by the borrower.

(3) With respect to any health professions student loan made after June 30, 1969, the school may require the borrower to make payments of at least $15 per month on all outstanding health professions student loans during the repayment period.

(4) A school must, on an annual basis, review and assess the collectibility of any loan more than 3 years past due. If the school determines that the prospects of future collection are promising enough to justify periodic review of the debt, and neither the statute of limitations nor the 10-year repayment period has expired, the school may retain the account for continued collections, provided that it makes an attempt at least semi-annually to collect from the borrower. When the due diligence procedures required by paragraph (b)(1) of this section have been exhausted, the school is responsible for determining the collection methods it will use for the semi-annual collection effort required on these loans. If the school determines that the prospects of future collection are not promising, or when the statute of limitations or the 10year repayment period has expired, the loan must be considered uncollectible. A school may determine a loan to be uncollectible sooner than 3 years past due when it has evidence that the loan

$57.211

cannot be collected, but in no case should a school consider a loan as uncollectible if it has not been in default for a least 120 days. A school is not subject to the requirements in paragraphs (b)(4) (i) and (iii) of this section for loans that became uncollectible, as determined by the school, before August 1, 1985.

(i) A school must request permission to write off an uncollectible loan within 30 days of the determination that it is uncollectible or reimburse the fund in the full amount of the loan, pursuant to §57.210(b)(4)(iii). The 30-day period for submitting the loan for writeoff review begins on the date that the determination of uncollectibility is made, in accordance with paragraph (b)(4) of this section. In any instance where the Secretary determines that a school has failed to exercise due diligence in the collection of a loan, in accordance with the applicable regulatory requirements, the school will be required to place in the fund the full amount of principal, interest, and penalty charges that remains uncollected on the loan. Reimbursement must be made by the following June 30 or December 31, whichever is sooner, except that in no case will a school be required to reimburse the fund in less than 30 days following the Secretary's disapproval of the request for write-off approval.

(ii) If the Secretary determines that a school has exercised due diligence in the collection of a loan, in accordance with the applicable regulatory requirements, or if the school determines that the loan was uncollectible prior to August 1, 1985, the school will be permitted to reduce its accounts receivable for the HPSL fund by the full amount of principal, interest, and penalty charges that remains uncollected on that loan and will not be required to return the Federal share of the loss to the Secretary.

(iii) If a school does not request permission to write off an uncollectible loan within the required timeframe, it must reimburse the fund for the full amount of principal, interest, and penalty charges that remains uncollected on that loan. This reimbursement must be made by the following June 30 or December 31, whichever is sooner, ex

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(5) Disclosure of taxpayer identity mation. Upon written request B Secretary, the Secretary of the nal Revenue Service (IRS) may is the address of any taxpayer w defaulted on a health profession dent loan, for use only by officers ployees, or agents of the Depart to locate the defaulted borrower lect the loan. Any such mailing a may be disclosed by the Secret any school from which the desi borrower received a health profe student loan, for use only by employees, or agents of the whose duties relate to the collec health professions student loa to locate the defaulted borrower b lect the loan. Any school who o quests and obtains this address t mation must comply with the a ments of the Secretary and the 3 garding the safeguarding and handling of this information.

(Approved by the Office of Managers Budget under control numbers 09150915-0094)

1

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inable impairment, which the Secy expects to continue for a long or to result in death.

Death. The Secretary will cancel a nt borrower's indebtedness in acnce with section 741(d) of the Act the death of the borrower. The 1 to which the borrower was ind must secure a certification of 1 or whatever official proof is conve under State law.

oved by the Office of Management and t under control number 0915-0047)

R 29055, May 18, 1979, as amended at 56 293, Apr. 26, 1991]

12 Repayment or cancellation of yoans for practice in a health proessional shortage area.

Practicing in a health professional age area. A person who:

Has obtained a degree as specified ction 741(f)(1)(A) of the Act;

Has obtained one or more health ssions student loans or, under a en loan agreement entered before ber 12, 1976, any other loans necy for costs (including tuition, s, fees, equipment, living and r expenses which the Secretary deines were necessary) of attending alth professions school; and

Enters into an agreement to prachis or her profession for at least 2 secutive years in a health profesal shortage area designated under ion 332 of the Act, is entitled to a portion of these loans repaid by Secretary in accordance with parah (b) of this section. Prior to enng an agreement for repayment of s, other than health professions ent loans, the Secretary will rece an individual to provide evidence sfactory to the Secretary of the exnce and reasonableness of the eduon loans, including a copy of the ten loan agreement establishing loan, and a notarized statement the copy is a true copy of the loan eement.

Repayment. Loan repayment will made to persons who meet the conons set forth in paragraph (a) of 4 section, as follows:

1) Upon completion by the borrower he first year of practice as specified the agreement, the Secretary will 30 percent of the principal of, and

the interest on, each loan which was unpaid as of the date the borrower began his or her practice.

(2) Upon completion by the borrower of the second year of practice the Secretary will pay another 30 percent of the principal of, and the interest on, each loan which was unpaid as of the date the borrower began his or her practice.

(3) Upon completion by the borrower of a third year of practice, the Secretary will pay another 25 percent of the principal of, and interest on, each loan which was unpaid as of the date the borrower began his or her practice except that, the amount of loan repayments that may be made on behalf of a borrower in any year under paragraph (a) of this section may not exceed $10,000, and the total amount of payment which can be made under this section with respect to any loan may not exceed $50,000.

(c) National Health Service Corps (NHSC) Scholarship recipients. A recipient of an NHSC Scholarship under 42 CFR part 62 may not enter into an agreement with the Secretary under this section until either (1) the participant has completed the NHSC Scholarship service obligation; (2) the Secretary has recovered from the participant an amount determined under 42 CFR 62.10, or (3) any service or payment obligation has been waived under 42 CFR 62.12. An NHSC Scholarship is not an educational loan for purposes of an agreement under this section. (Approved by the Office of Management and Budget under control number 0915-0047) [44 FR 29055, May 18, 1979, as amended at 56 FR 19293, Apr. 26, 1991]

$57.213 Continuation of provisions for cancellation of loans made prior to November 18, 1971.

Individuals who received health professions student loans as students of medicine, osteopathic medicine, dentistry or optometry prior to November 18, 1971, may still receive cancellation of these loans for practicing in a shortage area or for practicing in a rural shortage area characterized by low family income. The regulations set forth in 42 CFR 57.215(b) (1976), as adopted on February 7, 1974 remain applicable to cancellation on this basis.

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