Primary Care Loan Introduction
GENERAL INFORMATION
What is the Primary Care Loan Program?
The Primary Care Loan (PCL) program is a low cost federal loan program for medical students committed to primary health care practice. The interest rate is 5 percent and begins to accrue following a one year grace period after you cease to be a full-time student. When compared to other federal student loans and private loans, the PCL provides significant savings. The loan also offers deferment of principal and interest not found in other loan programs.
How much can I borrow?
Your financial aid office will determine how much you can borrow based on your eligibility, the amount of PCL funds available at your institution and other criteria. The maximum award for first- and second- year students is cost of attendance (including tuition, educational expenses, and reasonable living expenses). Amounts beyond this may be awarded to third- and fourth-year students.
How Do I Qualify for a PCL?
- You must be enrolled as a full-time student in a degree program leading to a doctor of medicine or doctor of osteopathy.
- You must be a United States citizen or eligible non-citizen.
- You maybe required to provide financial information about your parents.
- You must demonstrate financial need.
- You must not owe a federal grant refund or be in default on any federal loan.
- You must maintain good academic standing.
- You must register with Selective Service if required by law.
SERVICE OBLIGATION
Is there a service requirement for PCL?
YES.
- You must enter a residency training program in family medicine, internal medicine, pediatrics, combined medicine/pediatrics, preventive medicine, or osteopathic general practice.
- You must complete your residency program within four years of graduation.
- You must practice in primary health care until the loan is paid in full.
What are some examples of primary health care and non-primary care residency and practice activities for the PCL Program?
| PRIMARY HEALTH CARE | NON-PRIMARY HEALTH CARE |
| Acceptable | Non- Acceptable |
| Clinical Preventive Medicine Occupational Medicine Public Health Public Policy Fellowship Senior Residencies in one of the above Faculty administrators /policy makers certified in one of the primary health care disciplines Geriatrics Adolescent Medicine Adolescent Pediatrics Sports Medicine Internal Medicine Family Practice Pediatrics Urgent Care Hospitalist |
Cardiology Gastroenterology Obstetrics/Gynecology Surgery Dermatology Radiology Rehabilitation/Medicine Psychiatry Emergency Medicine Other subspecialty training or certification |
Are there exceptions to the primary health care service obligation?
YES, however, your loan repayment obligation remains.
- Your primary health care service obligation may be waived if you terminate studies before graduating and do not later resume studies.
- Your primary health care service obligation may be suspended for the period you are not enrolled because you have terminated studies before graduating; your obligation is resumed when you return to medical school to complete your studies.
What if I do not fulfill the primary care service obligation?
At the point you fail to fulfill your service obligation, the outstanding loan balance will be computed at an interest rate of 7 percent from the date of noncompliance, compounded annually. In addition, attorney fee, collection agency costs and other related charges may be added to any amount of the loan that is in default.
What if I accept PCL and change my mind about primary health care?
If you are not firmly committed to the practice of primary health care, you should not accept a PCL.
What if I want additional certification?
You may obtain additional certification in primary health care while fulfilling your service obligation, as long as you complete your primary health care residency program within four years after graduation. For example, if your primary care residency is completed in three years after graduation, you may obtain certification in an area of training to enhance your primary health care practice (i.e., geriatrics) at anytime, and it will be considered an acceptable activity for fulfillment of your service obligation. However, you may not do additional training or obtain certification in any non-primary health care sub-specialty.
When does repayment begin and end?
- Repayment begins following a twelve-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.
- Loans are repayable over a period of not less than ten years nor more than twenty five years, at the discretion of the institution.
May payment of my PCL be deferred?
YES.
- Up to four years in an eligible primary health care residency program.
- Up to three years as a volunteer under the Peace Corps Act practicing in an eligible primary health care activity.
- Up to three years as a member of a uniformed service. To be eligible for deferment, you must be on sustained full-time active duty practicing in an eligible primary health care activity in the Army, Navy, Air Force, Marine Corps, Coast Guard, National Oceanic and Atmospheric Administration Corps or the U.S. Public Health Service Commissioned Corps.
- For periods of advanced professional training in primary health care.
Is a PCL eligible for consolidation?
PCL is not eligible for consolidation because of the service obligation.
What happens to my PCL in the event of death or disability?
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.
Are there penalties for paying off the loan early?
Prepayment: The Borrower may, at his or her option and without penalty, prepay all or any part of the principal and accrued interest at any time.
What is a consequence of late payment?
Credit Bureaus: The Institution may disclose the Borrower’s loan, and any other relevant information, to credit bureaus. If the Borrower is more than 120 days past due in making a scheduled repayment, the Institution will disclose the Borrower’s delinquent status, and any other relevant information, to credit bureaus.
Can my loan be cancelled?
Death or Disability: In the event of the Borrower’s total and permanent disability or death, the unpaid indebtedness remaining on the Note shall be canceled. Subject to the regulations of the Secretary, the Institution may access a charge on the Borrower’s loan to cover the costs of insuring against death or disability cancellations.
How do I qualify for a PCL?
- You must be enrolled as a full-time student in a degree program leading to a doctor of medicine or doctor of osteopathy.
- You must be a United States citizen or eligible non-citizen.
- You must provide financial information about your parents.
- You must demonstrate financial need.
- You must not owe a federal grant refund or be in default on any federal loan.
- You must maintain good academic standing.
- You must register with Selective Service if required by law.
Do I have to provide financial information about my parents to obtain a PCL?
There is a series of federally required calculations that we need to run to determine your PCL Loan eligibility. These calculations take into account the age of the student and whether or not the student has been claimed on their parents’ federal taxes for the last 3 years. You will be contacted if your parents info is required.
Are deferments available during a fellowship?
Deferment: In accordance with 1. above, periodic installments of principal and interest need not be paid, and interest shall not accrue while the Borrower: (a) serves on active duty as a member of a uniformed service of the United States, for up to three years; (b) serves as a volunteer under the Peace Corps Act, for up to three years; (c) pursues advanced professional training in primary care, including internships and residencies; (d) pursues a full-time course of study at a health professions school eligible for participation in the Primary Care Student Loan program; (e) 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 (the Secretary), for up to two years; and (f) 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 the completion of the Borrower’s participation in advanced professional training described in 7c. above or prior to the completion of the Borrower’s participation in such training, for up to two years.
At what point is a PCL, EFN, or FADHPS recipient in default on the primary care service obligation?
A PCL, EFN, or FADHPS recipient is in default on the service obligation at the point that he or she:
- Enters subspecialty training;
- Fails to be able to complete a primary care residency within 4 years of graduation (except for dental recipients of EFN and FADHPS, who do not have a statutory time limit for completion of residency training);
- Fails to practice primary care in accordance with the terms of the PCL promissory note or EFN/FADHPS contract; or
- Fails to provide the school with documentation of either residency status or primary care practice. The school may allow the recipient to submit the required documentation up to 120 days after the due date without placing the recipient in default. If the required documentation is NOT submitted within 120 days of the due date, the school must place the recipient in default using the original due date.
What happens if the recipient fails to provide annual documentation certifying compliance with the terms of the agreement?
As stated above, if the recipient fails to certify compliance with the terms of the PCL promissory note or EFN/FADHPS contract on an annual basis until the service obligation has been fulfilled, the school must place the recipient in default of the service obligation.
Before continuing to the quiz you may want to thoroughly read the 'Primary Care Loan' promissory note:
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