Financial Collections

Primary Care Loans

Agreement to Enter and Practice Primary Care | Definitions | Interest Rates | Prohibition Against Consolidation | Prepayment | Grace Period | Change of Status | Repayment of Loan | Deferment | Death or Disability | Penalties | Collection Agents, Litigation and Witholding of Services | Additional Information

General Information

Agreement to Enter and Practice Primary Care

When you accepted this loan you agreed to:

1. Enter and complete a residency training program in primary healthcare no later than four years after the date on which you graduate;
2. Practice in primary healthcare through the date on which the loan is repaid in full, and to certify to the institution on an annual basis until the loan is repaid in full that you are practicing in primary healthcare.

Definitions

1. Primary Healthcare is defined as family medicine, general internal medicine, general pediatrics, preventive medicine, or osteopathic general practice.
2. Residency Training Program in Primary Healthcare is defined as a 3-year residency program in allopathic or osteopathic family medicine, internal medicine, pediatrics, combined medicine/pediatrics or preventative medicine, approved by the Accreditation Council on Graduate Medical Education or the American Osteopathic Association and rotating and primary healthcare internships and general practice residency programs approved by the AOA.

Interest Rates

All loans made on or after July 1, 1993, carry a uniform interest rate of five percent (5%) per year except if the borrower fails to comply with 1 or 2 of your agreement above. If you fail to comply with your agreement:

a) 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.

b) The recomputed balance will be paid not later than the expiration of the 3-year period beginning on the date on which the student fails to comply with the agreement.

Prohibition Against Consolidation

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

Prepayment

You may prepay all or any part of your unpaid loan balance, plus any accrued interest, at any time without penalty.

Grace Period

All loans made after July 1, 1993, carry a grace period of twelve months, during which time interest does not accrue on the loan and repayment is not required. The grace period ALWAYS begins on the date you cease to be a full-time student. Time spent in eligible deferment status does not alter the time at which the grace period occurs.

Change of Status

Until your loan is repaid, you must keep the UMD Financial Collections Office informed of any change in your name, address, telephone number, Social Security number, or driver’s license number.

Repayment of Loan

The total amount of loan support received under this program, plus accrued interest, must be repaid within a ten-year period which begins immediately after the grace period expires. If you cease to be a full-time student, but re-enter the same or another accredited school as a full-time student within the applicable grace period, the grace period is not considered to have begun (i.e., the repayment period does not begin until you have been away from an eligible course of study continuously for the full duration of the grace period).

However, when you transfer from one accredited school to another accredited school as a full-time student within the grace period, you must file a Certification of Deferment Status Form with the first school from which you received a Primary Care Loan in order to defer payments until you cease to pursue an eligible course of study at any school. The procedures for filing this form are discussed below under Deferment.

During the repayment period, you will repay the loan at a rate of $40 per month principal and interest according to your repayment schedule. You may repay all or any part of this principal and accrued interest on the loan at any time before it becomes due.

Deferment

Once the repayment period begins, you may be eligible for periods of deferment during which interest ceases to accrue on the loan(s) and repayment of principal is not required. Periods eligible for deferment status are described below:

1. serves on active duty as a member of a uniformed service of the United States, for up to three years;
2. serves as a volunteer under the Peace Corps Act, for up to three years;
3. pursues advanced professional training, including internships and residencies in primary healthcare;
4. pursues a full-time course of study at a health professions school eligible for participation in Health Professions Student Loan program;
5. leaves the Institution, with the intent to return to the Institution as a full-time student engaged in educational activity directly related to the health profession for which you are preparing, for up to two years; and
6. participates in a fellowship training program or a full-time educational activity which is directly related to the health profession for which you prepared at the Institution, and is engaged in by you within 12 months after completion of your advanced professional training or prior to the completion of your participation in such training, for up to two years. However, if you fail to enter and complete a primary care residency program and to practice primary care, in accordance with your agreement to enter and practice primary care, interest shall accrue during all periods of deferment.

To claim deferment, a Certification of Deferment Status form must be submitted to the school that made the loan:

1. when your first installment is due during deferment status,
2. annually thereafter.

Death or Disability Cancellation

Death: If you die, the unpaid balance of the loan and accrued interest thereon is canceled. To claim cancellation, the executor of the estate or a family member must submit a death certificate to the lending school.

Permanent and Total Disability: If you become unable to engage in any substantial gainful activity because of a medically determinable impairment, the unpaid balance of the loan and accrued interest thereon may be canceled. To claim this entitlement, you must submit to the lending school, a formal request for loan cancellation and a physician’s statement which certifies the date of onset, nature, and extent of your disability along with copies of all medical records pertinent to the disability.

Penalties

Late Charges

Under the terms of your Primary Care Loan promissory note, the school will assess a charge if you fail to pay all or any part of an installment payment when due or to file "timely" evidence of entitlement to deferment. Late charges may not exceed 6% of the amount of such installment on loans more than 60 days past due.

Default

If you fail to make a scheduled payment when due or to submit proper documentation of deferment, the school will declare your loan in default and may accelerate your loan. If your loan becomes 120 days past due, the school will disclose to credit bureau organizations your defaulted status and any other relevant information.

Collection Agents, Litigation and Withholding of Services

If you fail to make a scheduled payment, or fail to comply with any other terms of your promissory note, the Institution may:

1. refer your loans to a collection agent for further collection efforts;
2. initiate legal proceedings against you;
3. withhold institution services, such as registration, transcripts, letters of recommendation, and degree;
4. refer your loans to the Secretary for collection assistance, including offset of federal salaries; and
5. obtain your address from the Internal Revenue Service, if the Institution has no current address for you.

Additional Information
Any questions regarding repayment of your Primary Care Loan(s) not answered on this site should be directed to: University of Minnesota Duluth, Financial Collections, 129 DAdB, 1049 University Drive, Duluth, MN 55812-3011. Telephone: 218-726-8103. Email: fincoll@d.umn.edu.