As a Primary Care Loan recipient, you must enter into and complete a residency training program in primary health care not later than 4 years after the date on which you graduate and you must practice primary health care through the date on which the loan is repaid in full.
The Primary Care Loan has a 12-month grace period. The grace period immediately follows completion or termination of full-time student status and cannot be postponed to follow any deferments for which you may be eligible. For example, you are eligible for a deferment while you are in primary care residency training. You must use your one-year grace period for the first year of internship and apply for deferments for each of the remaining years of residency.
During the grace period, ECSI will send you periodic reminders as to when repayment will begin.
Repayment of Principal and Interest
Repayment begins following a 12-month grace period after you cease to be a full-time student. Interest at 5% is computed on the unpaid principal balance and begins to accrue upon expiration of your grace period unless you are eligible to defer payment. Primary Care Loans have a 10-year repayment period, which may be extended up to a maximum of 25 years in extenuating circumstances at the discretion of MWU.
The Primary Health Care Loan is not eligible for consolidation because of the service obligation (refer to the Higher Education Act of 1965, as amended).
There is no prepayment penalty if you opt to pay your loan in full at any time.
PCL Deferment Provisions
During a deferment period on your PCL interest does not accrue and you do not have to make payments on the loan.
Things you should know:
- Deferments are only available for participation in certain activities prescribed in statute and regulations.
- Deferment periods do not count against your right to repay the loan within 10 years. For example, if you have used 3 years of deferments you still have a total of 10 years to repay your loan and not 7 years as you may think.
- You are allowed to move in and out of deferment and repayment. For example, you may be in repayment, and then participate in an activity for which deferments are available, then go back into repayment, and then begin another deferrable activity.
- Deferments are not automatic. You must file deferment forms annually for each additional year of deferment if applicable. Deferments must be requested at least 30 days before you enter in:
- n activity that makes you eligible for deferment
- the repayment period
- MWU has a right to deny a request for deferment if it does not comply with the information requirements or if the deferment is submitted late.
- You must notify MWU or our loan billing servicer, ECSI, when you have completed or terminated a deferrable activity.
You may obtain deferment if you participate in certain activities in accordance with Federal law governing your promissory note. Below we are briefly identifying those activities and the corresponding maximum period of time for which you may defer:
Deferment Table for Primary Care Loan
|Type of Activity||Maximum Number of Years for Deferment|
|Performing active duty as a member of a uniformed service (Army, Navy, Marine Corps, Air Force, Coast Guard, the National Oceanic and Atmospheric Corps, or the U.S. Public Health Service Commission Corps). Form||Up to 3 years|
|Peace Corps volunteer Form||Up to 3years|
|Enrolled in a program of advanced professional training. Form||Unlimited|
|Taking a leave of absence from your medical studies to pursue a related educational activity, provided such activity is in primary care. Form||Up to 2 years|
|Participating in a training fellowship program, training programs and related educational activities for graduates of health professions schools, as long as such program/activity is in primary care. Form||Up to 2 years|
If you perform active duty as a member of a uniformed service (Army, Navy, Marine Corps, Air Force, Coast Guard, the National Oceanic and Atmospheric Administration Corps, or the U.S. Public Health Service Commissioned Corps) you are eligible for deferment for up to three years. Such service performed during the grace period does not count as part of the maximum deferment period for which you are eligible, nor does it entitle you to a grace period after the deferment period ends. This deferment provision is specifically limited by statute to borrowers on active duty who are members of a uniformed service and does not apply to borrowers who are employed by one of the uniformed services in a civilian capacity. For example, if you are working for the Public Health Service (PHS) and you are not a member of the Commissioned Corps you would not qualify for deferment.
If you are fulfilling or planning to fulfill an NHSC scholarship obligation through the "private practice option" or through the "private placement option" rather than as a PHS commissioned officer you would not be eligible for deferment.
If you volunteer under the Peace Corps Act you will be eligible for deferment for up to three years. Such service performed during the grace period does not count as part of the maximum deferment period for which you are eligible, nor does it entitles you to a grace period after the deferment period ends. Service in VISTA does not qualify for deferment.
Advanced Professional Training Deferment
Primary care residency training must be completed within 4 years of graduation from medical school and deferment cannot interrupt that period. You must use your 12 month grace period in the first year of internship and apply for a deferment each year for the remaining years of residency. For this reason, the Advanced Professional Training deferment under the Primary Care Loan Program is limited to a maximum of three years.
Fellowship Training Deferment
The fellowship training must involve primary care and must be a full-time activity in research, research training or health care policy and must be a formally established fellowship program which was not created solely for the borrower. In addition, a borrower must enter into the fellowship either prior to the end of advanced professional training or not later than 12 months after completing participation in that advanced professional training.
Only granted under extraordinary circumstances at the discretion of MWU.
Extraordinary circumstances include:
- Poor health
- Personal problems that have short-term impact on your ability to make payments on HPSLs as scheduled.
Your obligation to repay the loan will be canceled upon receipt of the required documentation in the event of your death or permanent and total disability.
To grant death cancellation, MWU must receive a death certificate or other official proof of death.
NOTE: Permanent and total disability is defined as being unable to engage in gainful employment of any kind because of a medically determinable impairment which is expected to continue for a long and indefinite period of time or to result in death.
To claim cancellation for disability, you should submit a formal request to MWU along with the medical report, consent for release, and supporting documentation that includes history of illness, medical examination(s), inpatient and outpatient treatments, and current medications. You must include as well all pertinent past medical records and prognosis and rehabilitation plan. The medical documentation must be accompanied by a signed and dated statement from your physician documenting permanent and total disability according to the definition above.
MWU will not be able to submit your request to the Department if all proper documentation is not received.
Primary Health Care - SERVICE OBLIGATION
- You must practice in Primary Health Care until the loan is paid in full.
- You must complete your residency program within four years of graduation.
- You must enter a residency training program in family medicine, internal medicine, pediatrics, combined medicine/pediatrics, preventive medicine, or osteopathic general practice.
- You must submit the Primary Health Care Service Obligation Form on an annual basis.
Penalties for not fulfilling the Primary Health Care Service Obligation
You will be subject to penalty if you:
- Enter into subspecialty training.
- Fail to be able to complete a primary care residency within 4 years of graduation.
- Fail to practice primary care in accordance with the terms of the PCL promissory note.
- Fail to provide the school with documentation of either residency status or primary care practice.
The PCL promissory note states in section 3 that if the borrower fails to comply with the service obligation, "...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 made prior to November 13, 1998.
MWU will recalculate the total amount you owed on the debt by calculating interest at 12 percent per year, compounded annually, on the original principal amount of each disbursement, based on the date that each disbursement was made. If you have already repaid a portion of the loan, these payments would be credited against the newly calculated indebtedness in accord with the time the payments were actually made.
For loans made between November 13, 1998 and March 22, 2010, statute requires that if a PCL borrower fails to comply with the primary care service requirement, the PCL will begin to accrue interest at a rate of 18 percent per year beginning on the date of noncompliance. The penalty is calculated on the outstanding balance of the PCL on the date of noncompliance.
For loans made on or after March 23, 2010, statute requires that if a PCL borrower fails to comply with the primary care service requirement, the PCL will begin to accrue interest at a rate of 7 percent per year beginning on the date of noncompliance. The penalty is calculated on the outstanding balance of the PCL on the date of noncompliance.
Break in Service
You must complete residency training within 4 years of graduation and deferment cannot interrupt that period. Upon completion of residency training, you must enter and remain in primary care practice unless: (1) you are in an allowable deferment; or (2) there are extenuating circumstances for which a break in service is appropriate, such as extended illness, maternity/family leave, or time to establish a practice or secure employment.
You must request a break in service from MWU and provide supporting documentation (e.g., a signed statement from you stating the reason for the break in service). MWU has discretion to approve a break in service that does not exceed 12 months. Any break in service exceeding 12 months must be approved by The U.S. Department of Health and Human Services.
Acceptable Residency Training
3-year residency approved by ACGME or AOA in:
- Family medicine
- Internal medicine
- Combined medicine/pediatrics
- Preventive medicine
- General practice
Acceptable Practice Activities
- Primary Care Clinical Practice
- Clinical Preventive Medicine
- Occupational Medicine
- Public Health
- Senior/Chief Resident in primary care residency program
- Faculty, Administrators, or Policy Makers certified in one of the primary health care disciplines
- Adolescent Medicine
- Adolescent Pediatrics
- Urgent Care [Campus Based Policy Memorandum 2003-1]*
- Sports Medicine
- Training for Primary Care Faculty Career
- Training for Public Policy Career
- Masters in Public Health
- Public Policy Fellowship
- Faculty Development Training
- Primary Care Fellowship
*It has been determined that physicians practicing in urgent care or as a generalist would meet the practice eligibility requirement for PCL and retain compliance provided they have not obtained any subspecialty training.
Unacceptable Residency/Practice Activities
- Rehab Medicine
- Physical Medicine
- Emergency Medicine
- Other Subspecialty Training or Certification
NOTE: The law requires that you practice in primary care, but does not specify that the practice be full-time or that it involve a minimum number of hours per week. Even though part-time practice is acceptable, you would be in breach of the service obligation if you were to obtain any type of subspecialty training that would allow you to sub-specialize during your remaining service.
10 Thing to Know About Your Primary Care Loan