CHAPTER FOUR

FEDERAL PERKINS LOAN

GRACE PERIOD

Nine months‚ immediately following completion of studies. During the grace period principal and interest do not accrue. After deferment‚ the borrower will automatically receive a 6 month post–deferment grace period.

FORBEARANCE

The borrower may‚ upon written request to the lender‚ seek forbearance if the total amount that the borrower is obligated to pay monthly on all Title IV Student Financial Aid Loans is equal to or greater than 20 percent of the borrower’s "total monthly gross income." The borrower must submit the following documentation:

• evidence showing the amount of the most recent total monthly gross income received by the borrower and

• evidence showing the amount of the monthly payment owed by the borrower for the most recent month for the borrower’s Title IV Student Financial Assistance loans.

The lender also may grant forbearance if it determines the borrower should qualify due to poor health or for other acceptable reasons‚ or if the Department of Education authorizes a period of forbearance due to a national military mobilization or other national emergency.

When the lender receives the borrower’s request and supporting documentation‚ the lender may grant the forbearance for a period of up to one year. The forbearance may be renewed‚ but the periods of forbearance collectively may not exceed a total of three years. Interest will continue to accrue and must be paid by the borrower during the forbearance period.

DEFERMENTS – CANCELLATION PROVISIONS

All the deferment and cancellation features of the Federal Perkins Loan Program are provided in the next six pages.

DEFERMENT PROVISIONS FOR BORROWERS THAT PERFORM VOLUNTEER SERVICES FOR LOANS MADE BEFORE 7/01/93

In accordance with Public Law 101–610‚ the National and Community Service Act of 1990‚ the following are the terms and conditions under which students receiving a Federal Perkins Loan may obtain a deferment for loan repayment for volunteer service

The borrower may‚ upon making a properly documented written request to the Lending Institution‚ defer repayment for up to 3 years and interest will not accrue while the borrower is:

• A Peace Corp volunteer

• A Vista Volunteer under Title I–Part A of the Domestic Service Act of 1973.

• A full time volunteer in service for a tax–exempt organization that the Department of Education has determined is comparable to Peace Corps or Vista Service.

CANCELLATION OF FEDERAL PERKINS LOAN FOR BORROWERS THAT PERFORM VOLUNTEER SERVICE

The borrower upon making properly documented written request to the institution‚ is entitled to cancel up to 70 percent of the amount of this loan plus the interest thereon canceled if the borrower performs the following service:

• As a volunteer under the Peace Corps Act or Vista.

• As a volunteer under the Domestic Volunteer Service Act of 1973.

The loan will be canceled at the following rates:

• 15 percent of the total principal amount of the loan plus interest on the unpaid balance accruing during the year will be canceled for volunteer service completed.

• 20 percent of the total principal amount of the loan plus interest on the unpaid balance accruing during the year will be canceled for each of the third and fourth‚ twelve (12) month periods of volunteer service completed.

* Principal need not be paid‚ and interest does not accrue
** Principal and interest may be deferred‚ but interest continues to accrue
*** Employment of service must be full–time
****Dental school graduates only are eligible for internship or residency program

1. A deferment request from a borrower enrolled in a graduate or post–graduate fellowship–supported program outside of the U.S. is approved until the completion of the fellowship period.

2. The internship program must require that the borrower have bachelor’s degree before being admitted. In addition‚ the program must be required by a state licensing agency for certification for professional practice or service‚ or the program must lead to a post graduate degree or certificate from a postsecondary school‚ hospital or health care facility.

3. The internship program must require that the borrower have a bachelor’s degree before being admitted. The program must be required by the state licensing agency for certification for professional practice or service.

4. A borrower is considered to have an economic hardship if the borrower:

a. Has been granted an economic hardship deferment under FDSL or FFEL.

b. Is receiving payment under a federal or state public assistance program;

c. Is working full–time but earning a total month gross income that does not exceed (the greater of):

1. The monthly earnings of an individual earning the minimum wage described in Section 6 of the Fair Labor Standards Act of 1938‚ or

2. An amount equal to 100% of the poverty line for a family of two as determined according to Section 673(2) of the Community Service Block Grant Act.

d. Is not receiving total monthly gross income that exceeds twice the amount of "b" above‚ and after deducting the amount of the borrower’s monthly federal postsecondary loan payments‚ the remaining amount of the borrower’s monthly income does not exceed "b" above.

e. Is working full–time and has a federal educational debt burden that equals or exceeds 20% of the borrower’s adjusted gross income and the difference between the borrower’s adjusted gross income minus such burden is less than 220% of the greater of: The annual earnings of an individual earning the minimum wage under Section 6 of the Fair Labor Standards Act of 1938‚ or the income official poverty line (as defined by the Office of Management and Budget‚ and revised annually in accordance with Section 673(2) of the Community Services Black Grant (Act) applicable to a family of two.

The amount of the borrower’s "federal postsecondary loan payments" is the amount of payment that would have been owed if the loan had been scheduled to be repaid in 10 years from the date the borrower entered repayment regardless of the length of the borrower’s actual repayment schedule or the actual monthly payment amount.

5. Deferment is for period in which borrower is engaged in service eligible for Federal Perkins Loan cancellation.

6. Postponement for loans made 11/29/90 – 07/01/93.

7. Any military service‚ active duty‚ for loans made before 07/01/93. For loans made on or after 07/01/93‚ military service must be in an area that qualified for hazardous duty pay.

8. Applies to borrower or care of spouse only. Does not allow deferment for the care of temporarily totally disabled dependent.

9. Borrower must not be attending an eligible postsecondary institution or be gainfully employed. Deferment must begin within 6 months after the borrower ceased to be enrolled at least half–time at an eligible institution.

10. Borrower’s salary must not be more than $1 over the minimum hourly wage rate.

11. Infant‚ toddlers‚ children and youth with disabilities are defined in Section S 602(a)(1) and 672 (1) of the individuals with Disabilities Education Act.

12. Teachers of the handicapped‚ elementary and secondary only.

13. Must be employed in a public or nonprofit program under public supervision. A qualified professional provider of early intervention services is defined in Section 672(2) of the Individuals with Disabilities Education Act.

14. Must be employed in public or nonprofit child or family services agency. High–risk children are defined as individuals under the age of 21 who: are low–income; have been or are at risk of being abused or neglected; have serious emotional‚ mental‚ or behavioral disturbances; reside in placements outside of their homes; or are involved in the juvenile justice system. Low–income communities are defined as those communities in which there is a high concentration of children eligible to be counted under Chapter 1 of Title I of the Elementary and Secondary Act of 1965. Services must be to the high–risk children and their families.

* Employment or service must be full–time.

1. Effective 07/01/95 total and permanent disability is defined as the borrower’s inability to work and earn money or to attend school because of an impairment that is expected to continue indefinitely or to result in the borrower’s death.

2. Cancellation rate is 15% per year.

3. Cancellation rate is: 15% per year for first and second years; 20% per year for third and fourth years; and 30% for fifth year.

4. Applies only to loans made on or after 11/29/90.

5. Cancellation rate is: 15% per academic year for first and second years; 20% per academic year for third and fourth years; and 30% for fifth academic year.

6. If borrower teaches at a school that does not qualify as a low–income school in a subsequent year‚ the borrower remains eligible for loan cancellation as long as the borrower continues to teach full–time at the school.

7. Cancellation rate is 15% per academic year.

8. Infants‚ toddlers‚ children and youth with disabilities are defined in Section 602(a)(1) and 672(1) of the Individuals with Disabilities Education Act.

9. Cancellation applies only to full–time teaching of handicapped children in a public or non–profit elementary or secondary school system.

10. A qualified professional provider of early intervention services is defined in Section 672(2) of the Individuals with Disabilities Education Act.

11. Must be employed in public or non–profit child or family services agency. High–risk children are defined as individuals under the age of 21 who: are low–income; have been or are at risk of being abused or neglected; have serious emotional‚ mental‚ or behavioral disturbance; resides in placement outside of their homes; or are involved in the juvenile justice system. Low–income communities are defined as those communities in which there is a high concentration of children eligible to be counted under Chapter 1 of the Elementary and Secondary Education Act of 1965.

12. Cancellation applies only to Federal Perkins Loans; does not apply to National Direct Loans. Cancellation rates is 15% per year for first and second years‚ and 20% per year for third and fourth years.

13. Military service must be in an area that qualified for hazardous duty pay. Cancellation rate is 12.5% per year of qualifying service.

14. Cancellation rate is 12.5% per year of consecutive service.

15. Cancellation rate is 10% per academic year.

Application for Forbearance for UMDNJ
Income & Expenses Summary I
Application For Hardship/Unemployment Derferment for UMDNJ
Income & Expenses Summary II

HEALTH PROFESSIONS STUDENT LOAN (HPSL) AND LOANS FOR DISADVANTAGED STUDENTS (LDS)

GRACE PERIOD

12 months‚ immediately following the last day of attendance. During the grace period principal and interest do not accrue.

DEFERMENT PROVISIONS

It is the borrower’s responsibility to request a deferment on an annual basis and to report his/her eligibility for deferred status to the billing agent EFG Technologies (formerly Eduserv) on the appropriate deferment form‚ immediately‚ upon the expiration of the grace period and entry into any of the following programs:

• Internships and residencies deferments are unlimited.

• Fellowship deferments‚ deferments period is two years.

• Active duty as a member of an uniformed service of the United States (Army‚ Navy‚ Air Force‚ Marine Corp‚ Coast Guard)‚ a volunteer under the Peace Corp Act‚ Vista‚ the National Oceanic and Atmospheric Administration and the U.S. Public Health Service‚ deferment period is three (3) years.

FORBEARANCE

The borrower may upon written request‚ seek forbearance if financial‚ medical‚ or other circumstances arise which prevent remittance of the scheduled payments. During forbearance principal will be deferred‚ however‚ interest will continue to accrue.

CANCELLATION

In the event of the borrower’s total and permanent disability or death‚ the unpaid indebtedness remaining on the note will be canceled upon receipt of the borrower’s written request and physician certification. All information will be forwarded to the Department of Health and Human Services for final approval. In the event of the borrower’s death‚ the entire indebtedness will be canceled upon receipt of a death certificate.

PRIMARY CARE STUDENT LOAN (PCL)

AGREEMENT TO ENTER AND PRACTICE PRIMARY HEALTH CARE

The borrower agrees to:

• enter and complete a residency training program in Primary Health Care no later than 4 years after the date on which the borrower graduates from the institution;

• practice Primary Health Care in a state through the date on which the loan is repaid in full‚ and certify to the institution on an annual basis‚ until the loan is repaid in full‚ that he/she is practicing primary health care.

DEFINITIONS

• Primary Health Care is defined as family medicine‚ general internal medicine‚ general pediatrics‚ preventive medicine or osteopathic general practice.

• Residency Training Program in Primary Health Care is defined as a 3–year residency program in allopathic or osteopathic family medicine‚ internal medicine‚ pediatrics‚ combined medicine‚ or preventive medicine‚ approved by the Accreditation Council on Graduate Medicine Education (ACGME) or the American Osteopathic Association (AOA) or a general practice residency program approved by AOA. This may include participation in a rotating or primary health care internship approved by the AOA.

NON–COMPLIANCE BY BORROWER

If a borrower fails to comply with the above:

• For loans disbursed prior to 11/13/98‚ the balance due on the loan involved will be immediately recomputed from the date of issuance (using the original principal) at an interest rate of 12 percent per year‚ compounded annually.

• For loans disbursed on or after 11/13/98‚ the balance due on the involved loan will be recomputed from the date of non–compliance at an interest rate of 18 percent per year compounded annually.

GRACE PERIOD

12 months‚ immediately following the last day of attendance. During the grace period principal and interest do not accrue.

DEFERMENT PROVISIONS

It is the borrower’s responsibility to request deferment on an annual basis and to report his/her eligibility for deferred status to the billing agent‚ EFG Technologies (formally EduServ Technologies)‚ on the appropriate deferment form‚ immediately‚ upon the expiration of the grace period and entry into any of the following programs:

• serves on active duty as a member of a uniformed service of the United States‚ for up to three years; á serves as a volunteer under the Peace Corp Act‚ for up to three years;

• pursues advanced professional training‚ including internships and residencies in Primary Health Care;

• pursues a full–time course of study at a health profession school eligible for participation in the Health Professions Student Loan program;

• leaves the institution‚ with the intent to return to the institution as a full–time student‚ to engage in a full–time educational activity which is directly related to the health profession for which the borrower is preparing‚ as determined by the Secretary of Health and Human Services‚ for up to two years; and

• participates in a fellowship training program or a full–time educational activity which is directly related to the health profession for which the borrower prepared at the institution‚ and is engaged in by the borrower within 12 months after completion of the borrower’s participation in advanced professional training above or prior to the completion of the borrower’s participation in such training‚ for up to two years.

However‚ if the borrower fails to enter and complete a Primary Care Residency Program and to practice primary care‚ in accordance with the above‚ interest shall accrue during all periods of deferments.

FORBEARANCE

The borrower may‚ upon written request‚ seek forbearance if financial‚ medical‚ or other circumstances arise which prevent remittance of the scheduled payments. During forbearance‚ principal will be deferred‚ however‚ interest will continue to accrue.

CANCELLATION

In the event of the borrower’s total and permanent disability‚ the unpaid indebtedness remaining on the note will be canceled upon receipt of the borrower’s written request and physician’s certification. All information will be forwarded to the Department of Health and Human Services for final approval. In the event of the borrower’s death‚ the entire indebtedness will be canceled upon receipt of a death certificate.

Prohibition Against Consolidation: This loan may not be consolidated as part of a Federal Consolidation Loan under the Higher Education Act of 1965.