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Title: Section 47-4.7 - Default

Effective Date


47-4.7 Default.

(a) A recipient shall be placed in default if he/she has not been granted a deferral or waiver by the Commissioner, and:

(1) the recipient fails to complete the primary care residency program, or

(2) the recipient is not available to fulfill his or her service obligation on the service obligation start date; or

(3) the recipient resigns, is dismissed from employment, or otherwise fails, refuses, or is unable to fulfill the service obligation; or

(4) an award is rescinded after dispersal of monies to a recipient.

(b) Calculation of financial obligation. A recipient found to be in default will be required to pay the President, within five years from the date of default, all monies received, plus interest, plus liquidated damages, as determined by the following formula:

A = 2B (T-S) _______ T

where "A" is the amount the President is entitled to receive; "B" is the sum of all payments made to the recipient and the interest on such amount which would be payable if, at the time such awards were paid, they were loans bearing interest at the maximum prevailing rate determined by the Higher Education Services Corporation; "T" is the total number of months in the recipient's period of obligated service; and "S" is the number of months of service actually rendered by the recipient. The total number of months in the recipient's period of obligated service is calculated by multiplying by twelve the number of annual awards received by the recipient.

(c) The Department of Health shall advise the Higher Education Services Corporation of any default, and the Higher Education Services Corporation shall collect repayments and, where indicated, initiate action for prosecution to recover monies owed the State.


VOLUME A-1 (Title 10)