R9-15-102. Qualifying Educational Loans and Restrictions

A. The Department shall use loan repayment funds to pay for principal, interest, and related expenses of: 1. A qualifying educational loan taken out by an awardee while obtaining a degree leading to eligibility for a health professional license; or 2. A qualifying educational loan resulting from the refinancing or consolidation of loans described in subsection (A)(1). B. Obligations or debts incurred under the following are ineligible for loan repayment funds: 1. A loan for which an awardee incurred a health professional service obligation that will not be completed before the start of the awardee’s program contract; 2. A primary care loan, intended as a long-term, low-interest-rate financial contract between the U.S. Department of Health and Human Services, Health Resources and Services Administration, and a full-time student pursuing a degree in allopathic or osteopathic medicine; 3. A loan subject to cancellation; or 4. A residency loan, intended to cover expenses not included in the cost of attendance at a health professional school, such as board examination fees, travel, and moving expenses for a residency program. C. The following apply to an awardee’s lenders and loans: 1. The Department shall accept assignment of loan repayment funds to a maximum of three lenders. 2. If more than one loan is eligible for loan repayment funds, an awardee shall advise the Department of the percentage of the loan repayment funds that each lender identified by the applicant is to receive. 3. An awardee is responsible for the timely repayment of a loan. 4. An awardee shall arrange with each lender to make necessary changes in the payment schedule for a loan so that quarterly loan repayment funds will not result in default. 5. An awardee is responsible for paying taxes that may result from receiving loan repayment funds to reduce a qualifying educational loan amount owed to a lender.