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Service Contracts
Initial contracts for the CIR-LRP are executed to cover a consecutive two-year period. Participants
agree to conduct contraception and/or infertility research at an NICHD intramural laboratory or in
a qualified domestic non-profit institution (tax-exempt under 26 USC 501), for a period not less
than two years from the effective date of the NIH Loan Repayment Program Contract. Neither the
applicant nor the Federal Government is bound by this contract until:
- the applicant has submitted and had approved by the Director, NICHD, a complete, accurate application
as required by this Program,
- the NIH Loan Repayment Program Contract is signed by the Director, NICHD, and
- authorized funds are available to the NICHD to fund the contract.
Extending Participation
Participants may apply to continue their CIR-LRP participation if their total
repayable debt
has not been repaid during their initial two-year contract. Renewal NIH Loan Repayment
Program Contracts are issued for one-year or two-year periods and based upon the same
criteria as the initial contract. Additionally, a demonstration of research accomplishments
during the previous contract is required.
Loan Repayment
Participants who enter into a NIH Loan Repayment Program Contract after December 27, 2001, must have total
eligible educational loans
that equal or exceed 20 percent of their annual salary ("debt threshold"). Participants
are required to pay 50 percent of their debt threshold
("participant obligation
"). Annual income or compensation refers to "
institutional base salary,
" which is the annual amount that the organization pays for the applicant's appointment, whether
the time is spent on research, teaching, patient care, or other activities. Base salary excludes
any income that an applicant may earn outside the duties of the organization
(Click here for more detailed information on salary and compensation).
However, you are always responsible for keeping your loan accounts in good standing. If you
do make payments to your lenders, they will be credited toward your
participant obligation.
To have these payments credited toward your
participant obligation,
you must provide us with documentation of the payments. This includes a
statement
or print-out from your lender's website, and must show the date of receipt and amount
of each payment, as well as the current balance of your account. This information should be faxed to 301-480-0756.
NIH will repay the remaining
educational debt
(" repayable debt
") as follows (also see Appendix III):
- at the rate of one-fourth of the repayable debt
for each year of qualified service, up to a $35,000 annual maximum;
- one-year or two-year continuation renewal contracts beyond the second year may be entered into;
-
if the applicant's contract is renewed, the NIH will repay at the rate of one-half of the remaining repayable debt
up to a $35,000 annual maximum; or 100 percent of the
repayable debt if it is $5,000 or less.
Payments are to be made on a quarterly schedule after completion of qualified research, unless
otherwise agreed to by the Secretary and the participant. After a loan repayment is sent to
a lender, a subsequent repayment is released contingent upon lender confirmation of the
prior payment's receipt and the account balance. Participants are responsible for obtaining
verification from their lenders of payment crediting and account balances. Accounts are monitored
to ensure accurate crediting of Extramural Loan Repayment Program repayments, to avoid lost or
misapplied payments, and to prevent repayment of the participant's obligation.
Click here for examples of benefits payments.
Partial Payment For Increased Income Tax Liability
The CIR-LRP's repayments to lenders on behalf of the participants represent taxable income
to program participants. This income is reported annually to the Internal Revenue Service
(IRS), and may result in an increase in participants' Federal, State and local tax liabilities.
Participants should consult their income tax preparers for guidance on the implications of
CIR-LRP repayments.
To partially offset Federal tax liability increases, tax reimbursement payments, equal to 39
percent of the total repayment amount, will be credited directly to the participants's IRS
(Federal tax) account simultaneously with each repayment.
Date Last Updated: Oct. 16, 2011
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