Application & Program Guidance: Breaching the Contract, Suspension & Waiver
The Faculty Loan Repayment Program (FLRP) Application Cycle for the 2013-2014 School Year will be open until June 27, 7:30 pm ET.
Breaching the Contract
What if I breach the FLRP contract?
The FLRP encourages participants to immediately contact the FLRP if a situation arises in which a participant is potentially unable to fulfill his/her service obligation. The FLRP will work with participants to assist them to the extent possible to avoid a breach and fulfill the service obligation. A participant who breaches the FLRP contract by failing to begin or complete his/her two-year service obligation will be placed in default and will be liable to pay an amount equal to the sum of the following: .
- The amount of loan repayments paid to the participant representing any period of obligated service not completed, plus 39% of that amount (representing the amount paid/withheld for Federal taxes on that amount); and
- $1,000 multiplied by the number of months of obligated service not completed.
Please note that a breach of the contract will permanently disqualify the individual from receiving future awards under FLRP and some other Federal programs.
Any amounts the United States is entitled to recover, as set forth above, must be paid within 30 days from the date the DHHS’ first demand letter is mailed. If these amounts are not repaid by the due date, interest and other delinquent charges will be assessed as provided by 45 Code of Federal Regulations Section 30.18.
Failure to pay the FLRP debt by the due date also has the following consequences:
- Report to Credit Agencies. The debt will be reported to credit reporting agencies as “delinquent.”
- Debt Collection. The debt will be referred to a debt collection agency and the Department of Justice. Any FLRP debt past due for 45 days will be referred to a debt collection agency. If the debt collection agency is unsuccessful in collecting payment in full, the debt will be referred to the Department of Justice for enforced collection.
- Administrative offset. Federal and/or State payments due to the participant (e.g. an IRS or State income tax refund) may be offset by the Department of Treasury to repay a delinquent FLRP debt. Also, recovery through Administrative Wage Garnishment may be enforced to repay a delinquent FLRP debt.
- Bankruptcy. A financial obligation under the FLRP may only be discharged in bankruptcy if the discharge is granted more than seven years after the due date and only if a bankruptcy court determines that the non-discharge of the debt would be unconscionable.
Suspension and Waiver
What should I do if I feel I cannot continue my service or payment obligation?
The Secretary of Health and Human Services may, under certain circumstances, suspend (put “on hold”) or waive (excuse) the FLRP service or payment obligation. A request for a suspension or waiver must be submitted through the BCRS Program Portal. Additional supporting documentation will be required following submission of the request.
- Suspension. This mechanism provides temporary relief to a FLRP participant if he/she has short-term (not permanent) circumstances that currently make compliance with the obligation impossible or would involve an extreme hardship such that enforcement of the obligation would be unconscionable. Periods of approved suspension will extend a participant’s FLRP service obligation end date.
All periods of time away from the approved facility should be documented by the employer through the six-month In-Service Verification process. If the total time away from the site, including the period of suspension exceeds 7 weeks (for example 35 work days) per service year (See “Service Requirements”section) the service obligation end date will be extended accordingly.
The major categories of service suspensions are set forth below.
- Leave of Absence for Medical or Personal Reasons. A suspension may be granted for up to one year, if the participant provides independent medical documentation of a physical or mental health disability, or personal circumstances, including a terminal illness of an immediate family member, which results in the participant’s temporary inability to perform the FLRP obligation. Upon receipt of the suspension request, the FLRP will notify the participant of instructions for submitting supporting documentation.
- Maternity/Paternity/Adoption Leave. Participants must notify the FLRP of pending maternity/paternity/adoption leave and provide appropriate documentation. Maternity/paternity/adoption leave of 12 weeks or less will be automatically approved, if properly documented. If the participant’s maternity/paternity/adoption leave will exceed 12 weeks during that service year, a suspension may be granted by the FLRP based on documented medical need or if additional parental leave time is permitted under State law.
- Call to Active Duty in the Armed Forces. Participants who are also military reservists and are called to active duty will be granted a suspension, for up to one year, beginning on the activation date described in the reservist’s call to active duty order. In addition to the written request for a suspension, a copy of the order to active duty must be submitted to FLRP. The suspension will be extended if the applicable Armed Forces entity continues the period of active duty. The period of active military duty will not be credited toward the FLRP service obligation.
- Waiver. A waiver permanently relieves the participant of all or part of the FLRP obligation. A waiver will be granted only if the participant demonstrates that compliance with his/her obligation (a) permanently impossible or (b) would involve an extreme hardship such that enforcement of the obligation would be unconscionable. A waiver must be submitted by uploading a signed request letter, including the reason(s) the waiver is being sought, as an inquiry to BCRS through the Program Portal. The participant will be contacted by the BCRS Office of Legal and Compliance regarding the medical and financial documentation necessary to complete the waiver request, and this documentation can be submitted through the BCRS Program Portal. Note that waivers are not routinely granted, and require a demonstration of compelling circumstances.
When would my service obligation be cancelled?
A participant’s obligation will be cancelled only in the unfortunate event of death. No liability will be transferred to the participant’s heirs.
next: Apply Now