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Process of Making Loan Payments
Process of Making Loan Payments

Home > Participants > Process of Making Loan Payments

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Keeping Your Loans Current Is Your Responsibility

Before the commencement of loan repayment, or during lapses in loan repayments due to administrative complications, Leave Without Pay (LWOP), or a break
Keeping Your Loans Current Is Your Responsibility
in service, LRP participants are wholly responsible for making payments or other arrangements to keep their loans current (so that increases in either principal or interest do not occur). The LRP contract period will not be modified or extended as a result of LWOP or a break in service. Penalties and/or fees assessed to participants failing to maintain current payment status may not be considered for reimbursement.

Initiating Loan Repayments

Once your application is selected for possible funding, NIH will ask you to document the student loan(s) listed in your application by providing:
  • Promissory note or disclosure statement showing the original terms of the loan
  • Current account statement (dated within 30 days)
After the documents are received, they are vetted and then provided to the NIH Institutes and Centers make final funding decisions. When NIH begins making quarterly electronic loan payments, they are paid directly to your lender(s) and will continue for the duration of your contract, provided you continue to fulfill the terms of your contract.

LRP payments are NOT retroactive. Loan repayment will commence only after a loan repayment contract has been executed, which usually occurs between July and September each year.

Continuing Loan Repayments

Each quarter, NIH will send you an e-mail requesting that you provide payment verification for your loan(s). In some cases, NIH may have a data exchange agreement with your lender to provide verification electronically. Otherwise, verification can be provided in the form of an account update printed from your lender's website or a fax of the current account statement for your loan. This documentation will verify that prior loan repayments were credited and will show the resulting account balances and current account status. Quarterly repayments will be made by NIH following receipt of:
  • Payment verification for your loan(s), as discussed above
  • Verification from your Principal Investigator, Program Director, or Research Supervisor that you have completed the prior period of research

Order of Loan Repayments

When participants have outstanding loans from multiple sources, NIH prioritizes which lenders are repaid first. Unless the Secretary of the U.S. Department of Health and Human Services (HHS) determines that significant savings would result from a different order of priority, NIH will repay loans in the following order:
  • Loans guaranteed by HHS:
    • Health Education Assistance Loan (HEAL)
    • Health Professions Student Loan (HPSL)
    • Loans for Disadvantaged Students (LDS)
    • Nursing Student Loan Program (NSL)
  • Loans guaranteed by the U.S. Department of Education:
    • Direct Subsidized Stafford Loan
    • Direct Unsubsidized Stafford Loan
    • Direct Consolidation Loan
    • Perkins Loan
    • FFEL Subsidized Stafford Loan
    • FFEL Unsubsidized Stafford Loan
    • FFEL Consolidation Loan
    • PLUS Loans disbursed to graduate and professional students on or after July 1, 2006 Note: PLUS loans to parents do not qualify for repayment.)
  • Loans made or guaranteed by a state, the District of Columbia, the Commonwealth of Puerto Rico, or a territory or possession of the United States
  • Loans made by academic institutions
  • Private (Alternative) Educational Loans:
    • Private (non-guaranteed) Consolidation Loans

Total Repayable Debt

NIH determines your total repayable debt and your LRP award amount in the following way:

  1. NIH totals the current balance(s) of your qualified student loan to determine your educational debt.
  2. NIH calculates your LRP award amount based on your repayable debt at the start of your LRP contract. NIH will repay 25 percent of your repayable debt annually, up to a maximum of $35,000 per year. You will receive the maximum annual disbursement only if your repayable debt is equal to or greater than $140,000 at the start of your LRP contract.

Date Last Updated: December 20, 2010

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