FY 2008 Application Guidance

Printer-friendly NELRP FY 2008 Application Guidance (248 KB)

Definition of Terms

Amendment Contract
An amendment contract is an optional 1-year extension of a 2-year NELRPcontract. 

Basic Registered Nurse (RN) Education
Basic RN Education is nursing education that qualifies the individual to take the RN licensing examination (NCLEX-RN).

Commercial Loans
Commercial loans are defined as loans made by banks, credit unions, savings and loan associations, insurance companies, schools and other financial or credit institutions which are subject to examination and supervision in their capacity as lenders by an agency of the United States or of the State in which the lender has its principal place of business.

Contract
A written contract pursuant to Section 846 of the Public Health Service Act, as amended, under which (1) the participant agrees to engage in a period of continuous full-time employment as a registered nurse at a CSF and (2) the Secretary agrees to repay, in consideration of such service, a percentage of the amount which is outstanding on the participant's qualifying nursing educational loans on the effective date of the initial 2-year contract. 

Critical Shortage Facility (CSF)
A CSF is a health care facility which the Secretary has determined has a critical shortage of nurses.  See Section C of this Guidance for information on different types of CSFs.

Existing Service Obligation
An obligation to work as a Registered Nurse which is owed to and provided for under an agreement with a CSF, Federal, State, or local government or any other entity, which will not be completely satisfied by April 30, 2008 (e.g. an active duty military obligation or existing commitment to an institution for educational pay back service or a sign-on bonus). 

Full-Time
Full-time is defined as the provision of nursing services for a minimum of 32 hours per week.  No more than 7 weeks per service year can be spent away from the CSF for vacation, holidays, continuing education, illness, maternity/paternity, or any other reason.  (Approved absences totaling greater than 7 weeks in a 52-week service year require an extension of the contract end date.)  

Funding Preference
Funding preference is defined as the funding of a specific category or group of approved applicants ahead of other categories or groups of approved applicants. See Section E in this Application Guidance.

Government Loans
Government loans are loans that are made by Federal, State, county or city agencies which are authorized by law to make such loans.

Greatest Financial Need
The greatest financial need funding preference is met by applicants whose total qualifying nursing education loans are 40% or greater than their annualized salary.

Holder
The commercial or government institution that currently holds the promissory note for the qualifying nursing education loan.

Lender
The commercial or government institution that initially made the qualifying nursing education loan.

Nurse Licensure Compact
The mutual recognition model of nurse licensure that allows an RN to have a license in one State and to practice in other States subject to each State's practice law and regulation.  Under mutual recognition, an RN may practice in several States unless otherwise restricted.

Nursing Education Loan Repayment Program (NELRP)
The NELRP is authorized by Section 846 of the Public Health Service Act, as amended.  Under the NELRP, the U.S. Department of Health and Human Services provides financial assistance to qualified applicants to repay a portion of their qualifying loans, in exchange for their full-time service as a registered nurse at a CSF.

Post-Master’s Nursing Certificate Program
A formal, post-graduate program that admits RNs with master’s degrees in nursing and, at completion, awards a certificate and academic credit.

Qualified Applicant
A person who meets all of the eligibility requirements set forth in this Application Guidance.

Qualifying Loans
Qualifying loans are government and commercial loans for actual costs paid for reasonable educational and living expenses incurred (1) while attending a school of nursing where the applicant obtained his/her qualifying nursing education, and (2) while taking only nursing prerequisite courses at schools other than the school(s) of nursing where the applicant obtained his/her qualifying nursing education, provided that the applicant received academic credit for those courses from the school of nursing where the applicant obtained his/her qualifying nursing education.  See Section H of this Guidance for additional information on which loans qualify for the NELRP.

Qualifying Nursing Education
Qualifying nursing education includes completed undergraduate basic RN education and completed graduate nursing education (including post-master’s nursing certificate programs) resulting in a baccalaureate or associate degree in nursing (or an equivalent degree), a diploma in nursing or a graduate degree in nursing from an accredited school of nursing.

Reasonable Educational Expenses
Reasonable educational expenses are tuition, fees, books, supplies, laboratory expenses, educational equipment and materials for qualifying nursing education which do not exceed the school’s estimated standard student budget for educational expenses for the participant’s degree program and for the year(s) of that participant’s enrollment.

Reasonable Living Expenses
Reasonable living expenses are the costs of room and board, transportation and commuting costs, and other costs which do not exceed the school’s estimated standard student budget for living expenses at that school for the participant’s degree program and for the year(s) of that participant’s enrollment.

School of Nursing
The term “school of nursing” means an accredited collegiate, associate degree, or diploma school of nursing in a State.

The Secretary
The Secretary of Health and Human Services and any other officer or employee of the U.S. Department of Health and Human Services to whom the authority to administer the NELRP has been delegated.

State
Includes the 50 States, the District of Columbia, Puerto Rico, the Northern Mariana Islands, the U.S. Virgin Islands, Guam, American Samoa, Palau, the Marshall Islands, and the Federated States of Micronesia.

A. Introduction and Program Administration

There is a serious shortage of nurses at certain health care facilities in the United States.  The purpose of the NELRP is to assist in the recruitment and retention of professional Registered Nurses (RNs) dedicated to providing health care in facilities with a crucial shortage of nurses and to provide an opportunity for RNs to consider a career in such facilities.  The program offers RNs substantial economic assistance to repay a portion of their qualifying nursing education loans in exchange for full-time service at a health care facility with a critical shortage of nurses. 

The NELRP award process is administered by the Division of Applications and Awards, Nursing Education Loan Repayment Branch (NELRB), within the Bureau of Clinician Recruitment and Service (BCRS), Health Resources and Services Administration (HRSA).  HRSA is an agency of the U.S. Department of Health and Human Services (DHHS).  The Division of Scholar and Clinician Support (DSCS) within BCRS monitors NELRP participants while serving at CSFs, reviews and approves or denies requests for service transfers, and determines if participants have completed their service commitment. The Legal and Compliance Office within BCRS reviews participant compliance, handles default determinations, and reviews and approves or denies requests for suspensions and waivers.

B. Service Requirements

1) 2-Year Service Requirement
All NELRP participants must enter into a contract agreeing to work full-time (at least 32 hours per week) in an approved CSF for 2 consecutive years.  In exchange, the NELRP will pay 30 percent of the participant's total qualifying loan balance for each service year (total of 60 percent).  All loan repayments paid to the participant after Federal tax withholding must be used by the participant to repay qualifying loans for qualifying nursing education.  The participant’s payments to his/her lenders or holders are subject to verification by the government.

2) Optional Service Obligation (1-year Contract Amendment)
A participant may be eligible to amend his/her 2-year NELRP contract to serve for a third (optional) consecutive year at a CSF.  If a participant enters into an optional amendment contract and works full-time for a third year in a CSF, the NELRP will pay an additional 25 percent of the participant's original qualifying nursing education loan balance. 

For more details about how to request and qualify for an amendment contract, see Section J of this Guidance.  All loan repayments paid to the participant after Federal tax withholding must be used by the participant to repay qualifying loans for qualifying nursing education.  The participant’s payments to his/her lenders or holders are subject to verification by the government.

C. Critical Shortage Facilities (CSFs)

1) Types of Eligible Critical Shortage Facilities

A NELRP participant is required to serve full-time as an RN at a CSF.  The following types of health care facilities are CSFs:

• Disproportionate Share Hospital (DSH) – A nonprofit hospital that: 1) has a disproportionately large share of low-income patients; and 2) receives (a) an augmented payment from the States under Medicaid; or (b) a payment adjustment from Medicare.  Hospital-based outpatient services are included under this definition.
• Federal Hospital – Any Federal institution in a State that is primarily engaged in providing, by or under the supervision of physicians, to inpatients: (a) diagnostic and therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or sick persons; or (b) rehabilitation of injured, disabled, or sick persons.  Hospital-based outpatient services are included under this definition.
• Non-Federal Non-Disproportionate Share Hospital – Any public or private nonprofit institution in a State that is primarily engaged in providing, by or under the supervision of physicians, to inpatients: (a) diagnostic and therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or sick persons, or (b) rehabilitation of injured, disabled, or sick persons.  Hospital-based outpatient services are included under this definition.
• Ambulatory Surgical Center – A nonprofit entity in a State that provides surgical services to individuals on an outpatient basis and is not owned or operated by a hospital.
• Federally Designated Community Health Center – A nonprofit entity that is receiving a grant, or funding from a grant, under section 330(e) of the Public Health Service Act, as amended, to provide primary health services and other related services to a population that is medically underserved.
• Federally Designated Migrant Health Center – A nonprofit entity that is receiving a grant, or funding from a grant, under section 330(g) of the Public Health Service Act, as amended, to provide primary health services and other related services to migratory and seasonal agricultural workers.
• Federally Designated Health Care for the Homeless Health Center – A nonprofit entity that is receiving a grant, or funding from a grant, under section 330(h) of the Public Health Service Act, as amended, to provide primary health services and other related services to homeless individuals.
• Federally Qualified Health Center Look-Alike – A nonprofit entity that is certified by the Secretary as meeting the requirements for receiving a grant under section 330(e), 330(g), or 330(h) of the Public Health Service Act, but is not a grantee.
• Home Health Agency – A public agency or private nonprofit organization, certified under section 1861(o) of the Social Security Act, that is primarily engaged in providing skilled nursing care and other therapeutic services.
• Hospice Program – A public agency or private nonprofit organization, certified under section 1861(dd)(2) of the Social Security Act, that provides 24-hour care and treatment services (as needed) to terminally ill individuals and their families.  This care is provided in individuals’ homes, on an outpatient basis, and on a short-term inpatient basis, directly or under arrangements made by the agency or organization.
• Indian Health Service Health Center – A nonprofit health care facility (whether operated directly by the Indian Health Service or operated by a tribe or tribal organization, contractor or grantee under the Indian Self-Determination Act, as described in 42 Code of Federal Regulations (CFR) Part 136, Subparts C and H, or by an urban Indian organization receiving funds under Title V of the Indian Health Care Improvement Act) that is physically separated from a hospital, and which provides clinical treatment services on an outpatient basis to persons of Indian or Alaskan Native descent as described in 42 CFR Section 136.12.
• Native Hawaiian Health Center – A nonprofit entity (a) which is organized under the laws of the State of Hawaii; (b) which provides or arranges for health care services through practitioners licensed by the State of Hawaii, where licensure requirements are applicable; (c) which is a public or nonprofit private entity; and (d) in which Native Hawaiian health practitioners significantly participate in the planning, management, monitoring, and evaluation of health services.  See the Native Hawaiian Health Care Act of 1988 (Public Law 100-579), as amended by Public Law 102-396.
• Nursing Home – A public or private nonprofit institution (or a distinct part of an institution), certified under section 1919(a) of the Social Security Act, that is primarily engaged in providing, on a regular basis, health-related care and service to individuals who because of their mental or physical condition require care and service (above the level of room and board) that can be made available to them only through institutional facilities, and is not primarily for the care and treatment of mental diseases.
• Rural Health Clinic – A public or private nonprofit entity that the Centers for Medicare and Medicaid Services has certified as a rural health clinic under section 1861(aa)(2) of the Social Security Act.  A rural health clinic provides outpatient services to a non-urban area with an insufficient number of health care practitioners.
• Skilled Nursing Facility – An public or private nonprofit institution (or a distinct part of an institution), certified under section 1819(a) of the Social Security Act, that is primarily engaged in providing skilled nursing care and related services to residents requiring medical, rehabilitation or nursing care and is not primarily for the care and treatment of mental diseases.
• State or Local Public Health Department including a Public Health Clinic within the Department – The State, county, parish or district entity in a State that is responsible for providing population focused health services which include health promotion, disease prevention and intervention services provided in clinics that are operated by the health department.

If an applicant is not sure whether a facility fits into one of the categories above, please contact the NELRP at: callcenter@hrsa.gov or 1-800-221-9393.

2) Ineligible Facilities

Ineligible facilities include, but are not limited to:

• Free Standing Clinics that do not qualify as one of the above CSFs;
• Renal Dialysis Centers;
• Private Practice Offices;
• Assisted Living Facilities; and
• Private For-Profit Facilities. (Note: After Fiscal Year 2007 (i.e., September 30, 2007), the Secretary may not, pursuant to any contract, approve a nurse to serve at any private entity unless that entity is nonprofit)

D. Eligibility Requirements

An individual is eligible to participate if he/she:

• Has received a baccalaureate or associate degree in nursing (or an equivalent degree), a diploma in nursing or a graduate degree in nursing from an accredited school of nursing in a State;
• Has outstanding qualifying loans obtained for qualifying nursing education leading to a degree or diploma in nursing as specified above;
• Has completed the nursing education program for which the loan balance applies;
• Is a U.S. citizen, U.S. national, or a lawful permanent resident of the U.S.;
• Is employed full-time (32 hours or more per week) at a CSF;
• Has a current permanent unrestricted license as an RN in the State in which he/she intends to practice or is authorized to practice in that State pursuant to the Nurse Licensure Compact (Please refer to the Nurse Licensure Compact State listing); and 
• Has submitted a complete electronic application, all required supplemental forms, and all required supporting documentation by the application deadline.

NOTE:  Individuals in the Reserve components of the Armed Forces or National Guard are eligible to participate.  For additional information, please see Section I.2 of this Guidance.

An individual is NOT eligible to participate if he/she:

• Has a judgment lien against his/her property for a debt owed to the United States.  Debtors with judgment liens for Federal debts are ineligible to receive Federal financial assistance;
• Has an existing service obligation (see Definition of Terms) that will not be satisfied on or before Wednesday, April 30, 2008);
• Has breached an obligation for professional service to a Federal, State, or local government entity;
• Is currently in default of a Federal debt (e.g., student loans, delinquent taxes, etc.);
• Works for nurse staffing agencies or travel nurse agencies;
• Works on an "as needed" basis (this includes PRNs, Pool Nurses, or other RNs who are not scheduled in a full-time capacity by NELRP definition);
• Has a temporary or inactive RN license;
• Is a licensed practical/vocational nurse;
• Is a nursing faculty member employed full-time in an educational institution; or
• Is self-employed.

E. Funding Preferences

The number of qualified applicants exceeds available NELRP funding.  The program uses funding preferences to determine the sequential order in which qualified applicants are considered for an award.  As provided in section 846(e) of the Public Health Service Act, as amended, a funding preference will be given to qualified applicants with greatest financial need, which the NELRP defines as those applicants whose total qualifying nursing education loans are 40% or greater than their annualized salary.  In addition, a funding preference is given to RNs working in the types of heath care facilities that have the most severe nursing shortage.  Applicants are grouped into one of the preference levels described below based on their debt to salary ratio and place of employment.  Awards are made to applicants starting with the first preference category described below by decreasing qualifying nursing education debt to salary ratio until funds are expended. 

QUALIFYING NURSING EDUCATION DEBT ÷ SALARY = 40% or GREATER

• First Preference for Funding will be given to applicants with greatest financial need working in the following types of CSFs:  Disproportionate Share Hospital (DSH); Nursing Home; State or Local Public Health Department including a Public Health Clinic within these Departments; Federally Designated Community Health Center; Federally Designated Migrant Health Center; Indian Health Service Health Center or Rural Health Clinic.
• Second Preference for Funding will be given to applicants with greatest financial need working in the following types of CSFs:  Federally Designated Health Care for the Homeless Health Center; Native Hawaiian Health Center or Non-Federal non-DSH.
• Third Preference for Funding will be given to applicants with the greatest financial need working in the following types of CSFs:  Federally Qualified Health Center Look-Alike; Ambulatory Surgical Center; Home Health Agency; Hospice; Skilled Nursing Facility or Federal Hospital.

QUALIFYING NURSING EDUCATION DEBT ÷ SALARY = LESS THAN 40%

• Fourth Preference for Funding will be given to applicants regardless of financial need working in the following types of CSFs:  Disproportionate Share Hospital (DSH); Nursing Home; State or Local Public Health Department including a Public Health Clinic within these Departments; Federally Designated Community Health Center; Federally Designated Migrant Health Center; Indian Health Service Health Center or Rural Health Clinic.
• Fifth Preference for Funding will be given to applicants regardless of financial need working in the following types of CSFs:  Federally Designated Health Care for the Homeless Health Center; Native Hawaiian Health Center or Non-Federal non-DSH.
• Sixth Preference for Funding will be given to applicants regardless of financial need working in the following types of CSFs:  Federally Qualified Health Center Look-Alike; Ambulatory Surgical Center; Home Health Agency; Hospice; Skilled Nursing Facility or Federal Hospital.

F. Available Benefits

The NELRP will provide funds to program participants to repay a portion of their outstanding qualifying nursing education loans.  Recipients of NELRP contracts receive the following benefits:

• For the first year of service, the NELRP will pay participants 30 percent of their total qualifying loan balance(s) for qualifying nursing education, as of the effective date of the contract.
• For a second year of service, the NELRP will pay participants 30 percent of their total qualifying loan balance(s) for qualifying nursing education, as of the effective date of the contract.
• For a third year of service, the NELRP will pay participants 25 percent of their original qualifying loan balance(s) for qualifying nursing education, as of the effective date of their initial 2-year contract.  See Section J.2 of this Guidance.

The NELRP participant will receive salary and benefits from the employing CSF or professional group.  Employment compensation packages are negotiated between the nurse and the employer.  The CSF cannot guarantee a NELRP contract award.  Therefore, the NELRP loan repayments should not be part of the salary negotiations between the nurse and the employer. 

G. Method of Payment

The DHHS disburses each monthly payment through an electronic funds transfer to the participant's checking or savings account identified on the ACH Vendor/Miscellaneous Payment Enrollment Form submitted by the applicant.  The first direct deposit is made approximately 30 days after the effective date of the contract.  It is the participant's responsibility to use the NELRP payments (the amounts received by the participant after Federal tax withholding) to pay the lenders or holders of qualifying nursing education loans.  Periodically, the NELRP may contact a participant’s lenders or holders to verify that payments have been made.  Please note that, unlike some other Federal programs, the NELRP does not provide any tax assistance payments.

Participants must immediately notify the DSCS in writing of any changes in mailing address, email address, name, or financial institution (bank) information to ensure an uninterrupted flow of loan repayment funds.  In the case of a name change, please provide legal documentation, such as a copy of a marriage certificate.  Please send your request to Division of Scholar and Clinician Support, Room 8A-19,  5600 Fishers Lane, Rockville, MD  20857.

If for any reason a participant does not receive a scheduled payment, the participant should call the NELRP as soon as possible at 1-800-221-9393 or email callcenter@hrsa.gov.  Please be advised that if the NELRP has any questions concerning a participant’s eligibility for continuing payments, the NELRP will delay payments pending clarification of the participant’s eligibility status. 

NOTE:  Under the Treasury Offset Program, the Department of the Treasury is authorized to offset NELRP payments for delinquent Federal and State debts and delinquent court-ordered child support payments.  In keeping with the President’s Executive Orders concerning compliance with child support orders, the NELRP stresses the importance of honoring any child support obligations the participant may have.

H. Qualifying Educational Loans

1) Loans Eligible for Repayment

A NELRP participant will receive funds to repay a portion of the outstanding principal of, and interest on, qualifying loans (see Definition of Terms) obtained by the participant, at the time of the participant's undergraduate and/or graduate nursing education, to pay for:

• Tuition, fees, and other reasonable educational expenses (see Definition of Terms) for qualifying nursing education; and
• Reasonable living expenses (see Definition of Terms) incurred for qualifying nursing education.

2) Examples of Eligible Loans

• Nursing Student Loans;
• Stafford Loans; and
• Supplemental Loans for Students.

3) Examples of Loans Not Eligible

• Loans for which the applicant has an Existing Service Obligation (see Definition of Terms);
• Loans obtained for training in vocational or practical nursing (LVN/LPN);
• Loans obtained from family members or private institutions not subject to Federal or State examination and supervision as lenders;
• Loans made prior to or after the applicant's qualifying nursing education;
• Loans obtained for non-nursing education.
• Loans that have been paid in full;
• Any portion of a consolidated/refinanced educational loan that is not clearly identified as being for reasonable educational expenses and reasonable living expenses incurred for qualifying nursing education by the applicant (See Definition of Terms).
• Consolidated/refinanced educational loans that include another person’s loans;
• Credit card payments for nursing education expenses are not qualifying loans;
• Parent Plus Loans;
• Federal Perkins Loans (unless the applicant can provide documentation as indicated in Section M.3 (Instructions for Providing Required Supporting Documentation) that such loans are not subject to cancellation); and

I. Leaving the CSF (Changing Jobs)

Participants are expected to complete their full contract service obligation at their initial service site.  Should participants become unable to complete their obligation at their initial NELRP service site, they must continue their service at another eligible approved CSF.  When a participant desires a transfer, a written request must be submitted to the Division of Scholar and Clinician Support (DSCS) for approval before the participant leaves his or her current service site.  The participant must also obtain and submit a letter/certification from the desired transfer site as set forth in Section M.3 of this Guidance, which documents the CSF’s status as a first funding preference facility at the time the transfer request is made.  If a participant transfers to a new location, moving expenses will not be paid.

1) Transfers

ALL TRANSFER SITES MUST BE APPROVED BY THE DIVISION OF SCHOLAR AND CLINICIAN SUPPORT.  FAILURE TO RECEIVE PRIOR APPROVAL WILL RESULT IN IMMEDIATE SUSPENSION OF PAYMENTS UNTIL THE DSCS STAFF RECEIVES VERIFICATION OF EMPLOYMMENT AT AN ELIGIBLE TRANSFER FACILITY AND APPROVES THE TRANSFER.  CONTINUED FAILURE TO DOCUMENT FULL-TIME EMPLOYMENT AT AN APPROVED CSF MAY RESULT IN THE PARTICIPANT BEING RECOMMENDED FOR DEFAULT OF HIS/HER CONTRACT.

The following requirements apply to participants who request a transfer:

• In order for the DSCS to approve the participant’s transfer; the participant must transfer to one of the types of CSFs that is included in the first funding preference at the time the participant makes the transfer request.
• Participants who transfer from one CSF to another may not incur a service obligation to the new facility or employer while participating in the NELRP.
• If there is no break in service between the initial site and the approved transfer site, the NELRP will continue to make loan repayments to the participant.  However, if the participant fails to resume service within 30 days of the stop-work date at the initial CSF, the NELRP will stop all loan repayments.  Once the participant has commenced full-time service at another approved CSF, loan repayments will be resumed as appropriate and the service end date will be extended to account for the entire service obligation period.
• If a NELRP participant ceases full-time employment at the initial site and does not resume service at an eligible approved CSF within 60 days, the participant will be recommended for default of his/her NELRP obligation.

A participant’s request for transfer approvals must be submitted to the DSCS staff in writing.  The request should include the reason for the transfer, a letter/certification from the CSF regarding the CSF’s status as a first preference facility and indicating if the facility is a private nonprofit, private for profit, or public/government owned, and be mailed to the following address:

U. S. Department of Health and Human Services
Health Resources and Services Administration
Bureau of Clinician Recruitment and Service
Division of Scholar and Clinician Support
5600 Fishers Lane; Room 8A-55
Rockville, MD 20857

Participants with questions may call 1-800-221-9393 or email: callcenter@hrsa.gov.

2) Members of a Reserve Component of the Armed Forces

Individuals in the Reserve component of the Armed Forces or National Guard are eligible to participate in the NELRP.  However, reservists should understand the following:

• If a reservist is away from the NELRP service site due to military training and/or service, the time away will be combined with the participant’s other absences from the service site during that service year.  If the reservist’s military training and/or service, in combination with all other absences from the service site does not exceed 7 weeks per service year, no further action is necessary.
• If a reservist’s military training and/or service (including a call to active duty), in combination with all other absences from the NELRP service site, will exceed 7 weeks per service year, the reservist must notify the DSCS immediately and submit a written request for a suspension of the NELRP service obligation (see Section L of this Guidance).  The suspension request should include documentation of the reservist’s training or call to active duty orders.  The NELRP payments will be stopped while the reservist is on an approved suspension and will resume when the reservist returns to full-time service.  The NELRP service obligation will be extended to account for the break in service due to the reserve or active duty obligation.
• If the CSF where the reservist was serving at the time of deployment is unable to reemploy that reservist, the reservist will be expected to complete his/her NELRP service obligation at another an eligible approved CSF.  The reservist must contact the DSCS and request a transfer, and receive approval, in accordance with the transfer policy (see Section I.1 of this Guidance) prior to commencing employment at the facility.  If the reservist fails to resume service at an eligible approved CSF within 60 days of the end of the deployment or such longer time as law may allow, the reservist will be recommended for default of his/her NELRP obligation. 

J. Federal Contracting Process

1) Initial Contract

A 2-year contract must be signed and returned to the Division of Applications and Awards, Nursing Education Loan Repayment Branch along with all required supplemental forms and all required supporting documentation (see Section M of this Guidance).

If the applicant is selected for participation into the NELRP, the contract is signed by the Secretary or his/her designee.  A copy of the signed participant’s executed contract, a payment authorization worksheet, and award letter will be sent to the participant no later than October 31, 2008.

The applicant’s contract will not be signed by the Secretary or his/her designee unless all REQUIRED information on the application, required supplemental forms, and required supporting documentation has been provided, a complete application package has been received by the application deadline, and the applicant has been approved to receive a NELRP award by the Division of Applications and Awards, Nursing Education Loan Repayment Branch.  A Checklist describing the application materials is included in this Guidance for your convenience.

PLEASE NOTE:  A signed NELRP contract that does not contain the 12 terms and conditions on one sheet of white paper (8 ½ inch x 11 inch) will not be accepted.

PLEASE NOTE:  The participant's service obligation to the NELRP officially begins on the date the contract is signed by the Secretary or his/her designee.  If the participant fails to commence service on the effective date of the contract, he/she will be placed in default of the contract.

2) Amendment Contract

Participants who receive a 2-year contract may be eligible to amend their NELRP contract to serve for a third consecutive year under the following conditions:

• The participant must notify the Nursing Education Loan Repayment Program in writing, at least 6 months prior to the end of the second service year, that the participant wishes to amend the NELRP contract for a third year.
• The participant must continue to serve at an eligible approved CSF.  If the participant's current site is no longer a nonprofit CSF, an amendment contract will not be awarded.  If such a participant wishes to continue in the NELRP, he/she must request prior approval for a transfer (see Section I of this Guidance).  If a participant transfers to a new location, moving expenses will not be paid.
• The NELRP payments received under the NELRP 2-year contract must have been applied to reduce the original qualifying nursing education loan balances, as indicated on the payment authorization worksheet that participants will receive with their award letter.  A participant's loan balances will be verified and a payment history from his/her lender(s)/holder(s) will be required to show that all NELRP funds received previously were applied toward the approved qualifying loans during the contract period.  Failure to apply the loan payments to reduce the original qualifying nursing education loans will result in the denial of a request for an amendment contract.
• The participant must not have an existing service obligation to the CSF or another entity.

Participants who meet the above requirements and are approved to receive an amendment contract will receive payments equal to an additional 25 percent of their original qualifying nursing education loan balance.  The amendment contract will not be effective until the participant has completed his/her 2-year service period under the initial contract.  The amendment contract service period must begin immediately following the completion of the initial service commitment (i.e., no break in service between the 2-year initial contract and the 1-year amendment contract is allowed). 

There is no guarantee that a 2-year service commitment contract will be amended beyond the initial 2 years.  Applicants for contract amendments must continue to meet the program eligibility criteria, must be in full compliance with their existing NELRP service obligation, must be planning to work for the duration of the contract amendment at an eligible approved CSF, and must have applied all NELRP payments previously received to reduce their qualifying loans.  Award of amendment contracts is subject to the availability of funds.

K. Breaching the NELRP Contract

The following applies to participants who breach their NELRP contract:

• Effect of Not Completing 2 Years of Service - A participant who fails to complete 2 years of full-time service at an approved CSF is liable to repay all the NELRP payments received (including amounts withheld for Federal taxes), plus interest at the maximum legal prevailing rate.  Breach of the contract will permanently