Institutions must be sure that students who receive EFN and FADHPS scholarships meet the set eligibility requirements specified in statute and in regulations. Only prior recipients are eligible. A description of the eligibility requirements follows.
A student applicant must be a citizen or national of the United States, or a lawful permanent resident of the United States, the Commonwealth of Puerto Rico, the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa or the Trust Territory of the Pacific. A student who remains in this country on a student or visitor's visa is not eligible.
Students must be enrolled full-time in programs leading to the following degrees in order to be eligible for EFN and FADHPS funds:
EFN and FADHPS recipients are not required under statute or regulations to maintain good academic standing. However, a school has the option of stipulating that recipients must be in good academic standing as defined by the school for other programs, such as HPSL.
[Section 736(a) of the Public Health Service Act]
The student must demonstrate exceptional financial need for assistance in order to pursue the full-time course of study at the health professions school in which he or she is enrolled or accepted for enrollment. Exceptional financial need is defined as the condition in which a student's financial resources do not exceed the lesser of $5,000 or one-half the cost of attendance at the school in which the student is enrolled.
[Section 736(a) of the Public Health Service Act]
All schools participating in the EFN and FADHPS programs must:
Resources for determining exceptional financial need include expected family contribution from the:
Resources for determining exceptional financial need do not include:
Exceptional financial need notwithstanding, schools must consider all resources to determine the amount of EFN and FADHPS scholarships that students may receive.
Beginning with the 1993-94 academic year, all graduate students must be considered independent according to the need analysis formula in Title IV of the Higher Education Act. Nonetheless, institutions still must take parents' information into account for the purpose of awarding EFN and FADHPS funds. This requirement cannot be waived. In cases where the parents refuse to provide income information, an affidavit documenting such a refusal cannot be accepted in lieu of the required information. Unless the parents are deceased, a student who does not provide parental income information may not be considered for EFN or FADHPS funds.
The amount of EFN and FADHPS funds awarded to students plus the amount of the expected family contribution--including parents' contribution--may not exceed the cost of attendance. Note that Department of Education programs authorized under Title IV of the Higher Education Act, such as Federal Stafford Loans, Federal Perkins Loans and Federal College Work-Study, donot require parents' contribution to determine eligibility for independent students. EFN and FADHPS, however, require parents' contribution for all students without regard to age, tax, marital or independent status. It is possible, therefore, that an independent student's expected family contribution figure will be lower for these Department of Education programs than for the EFN and FADHPS programs, because parents' financial information is not taken into account. For the purpose of awarding EFN and FADHPS, the Department of Education funds may replace the parents' contribution for students who meet the Higher Education Act's independent student definition. An overaward will not result as long as the total of the independent student's contribution plus financial aid from all sources and actual other resources does not exceed the cost of attendance.
Developing student budgets requires careful identification of reasonable costs necessary for the student's attendance at the school, including any special needs or obligations of each student or costs common to particular groups of students. The school must develop student budgets which treat students within groups consistently, but are sensitive to individual circumstances. Schools must be able to document the various student budgets used in determining financial need. Using the Title IV requirements for developing costs of attendance is an appropriate approach for administering EFN and FADHPS funds.
The Department of Health and Human Services recognizes that from time to time an individual student's budget may deviate from the standard cost of attendance because of unusual circumstances. Financial aid administrators should use their authority to make changes to the standard student budget judiciously. Further, the school must carefully document all such changes.
Only students who come from disadvantaged backgrounds may obtain FADHPS awards. This eligibility requirement does not apply to students who receive EFN awards.
To identity students who come from disadvantaged backgrounds, the school must determine if students meet one of the following two criteria:
The Department of Health and Human Services publishes the requisite income levels in the Federal Register periodically.
[42 CFR Part 57.1804]
EFN and FADHPS scholarships carry two primary health care service obligations for recipients. First, recipients must agree to complete the program of education for which the EFN and FADHPS has been awarded. Second, EFN and FADHPS programs:
Following are the acceptable and unacceptable residency training/practice activities:
Statuary Definition of Primary Care:
Acceptable Residency Training:
Medicine/Osteopathic Medicine: |
Dentistry: |
3-year residency approved by ACGME or AOA in-- |
Advanced Education/Residency programs accredited by the Commission on Dental Accreditation in-- |
-family medicine -internal medicine -pediatrics -combined medicine/pediatrics -preventive medicine -general practice |
-general dentistry -general practice -dental public health Programs accredited by the Council on Education for Public Health leading to a Master's in Public Health or similar degree |
Advanced education programs in general dentistry sponsored by an institution of higher education, as approved by the Secretary on a case-by-case basis |
Acceptable Practice Activities:
Medicine/Osteopathic Medicine: |
Dentistry: |
-Primary Care Clinical Practice -Clinical Preventive Medicine -Occupational Health -Senior/Chief Resident in primary care residency program -Faculty, Administrators, or Policy Makers certified in one of the primary health care disciplines -Geriatrics -Adolescent Medicine Adolescent Pediatrics -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 |
-General Dentistry Practice -Pediatric Dentistry -Dental Public Health -Dental Faculty -Policy Makers with General Dentistry Training -Administrators with General Dentistry Training |
Unacceptable Practice Activities:
Medicine/Osteopathic Medicine: |
Dentistry: |
-Cardiology -Gastroenterology -Obstetrics/Gynecology -Surgery -Dermatology -Radiology -Rehabilitative Medicine -Physical Medicine -Emergency Medicine -Other Subspecialty Training or Certification |
-Orthodontics -Endodontics -Oral Surgery -Prosthodontics -Periodontics -Oral Pathology |
Any form of subspecialization (non-primary care) during residency or practice would constitute a breach of service obligation on the date recipients enter into non-primary care residency/practice.
It is not required that the 3 years of primary care residency training be consecutive. Recipients who spend up to 1 year of the 4 years doing something other than residency training (e.g., leave of absence, family leave, fellowships in primary care, etc.) are not in breach of their contract.
To assure that the EFN/FADHPS programs are most effective in helping to achieve the national goal of making primary care more widely available, and in contributing to the success of health care reform, the Department requires that EFN and FADHPS recipients fulfill their primary care service obligation in the United States. Service outside of the United States is only permitted if the borrower is in military service and is assigned to serve at a location outside of the United States.
A service obligation with the military or a service obligation with EFN/FADHPS does not have precedence over the other. Both must be fulfilled in accord with the terms of the contract and may be fulfilled concurrently. For example, a student who has taken EFN or FADHPS and has a military service obligation would be required to practice primary care in accord with the EFN or FADHPS agreement and would also be required to comply with the military obligation.
It is not required that the 3 years of primary care residency training be consecutive. Recipients who spend up to 1 year of the 4 years doing something other than residency training (e.g., leave of absence, family leave, fellowships in primary care, etc.) are not in breach of their contract. Any form of subspecialization (non-primary care) during residency or practice would constitute a breach of service obligation on the date recipients enter into non-primary care residency/practice.
An EFN/FADHPS recipient must complete residency training 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). Upon completion of residency training, the recipient mustenter and remain in primary care practice for 5 years unless there are extenuating circumstances for which the school determines that a break in service is appropriate, such as extended illness, maternity/family leave, or time to establish a practice or secure employment.
The school must obtain documentation which supports the recipient's request for a break in service (e.g., a signed statement from the recipient stating the reason for the break in service). The school 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 Department. Requests for approval of such must be submitted to:
 | DHHS/HRSA/BHPr |
| Division of Student Assistance |
| Office for Campus Based Programs |
| Scholarship Team |
| 5600 Fishers Lane, Room 8-34 |
| Rockville, MD 20857 |
The law requires that EFN/ FADHPS recipients 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, the recipient would be in breach of the service obligation if he or she were to obtain any type of subspecialty training that would allow him or her to subspecialize during his or her remaining service.
The first documentation of the recipient's annual activities is due at the time of graduation. Information on where graduates have matched would be sufficient to satisfy this documentation requirement for the first year. In the absence of residency matching information, the recipient has up to 120 days from graduation to provide documentation of his or her activities. The recipient is considered in default, for purposes of calculating the 3-year repayment period, at the point that the recipient breaches the terms of the contract, or on the date documentation was due and not submitted, whichever occurs first.
RESIDENCY TRAINING: The Department has modified the Health Professions Student Loan (HPSL) deferment form to include a section for EFN and FADHPS recipients to complete to certify that they are in an eligible residency program (see Exhibit B). This form is sufficient for documenting compliance with the agreement to enter primary care during residency training.
PRIMARY CARE PRACTICE: Upon completing residency and entering primary care practice, the recipient can begin using the self-certification form (see Exhibit C), or the school can develop its own form or documentation procedures for its recipients to use for the purpose of self-certifying compliance with the service obligation on an annual basis. At a minimum, the certification must state that the recipient is practicing primary care in accordance with the terms of the EFN/FADHPS contract and must be signed and dated by the recipient.
[Section 795(a) of the Public Health Service Act]
EFN and FADHPS recipients who do not fulfill their primary health care service obligations are subject to financial penalties. The law requires them to repay the amount of their scholarships plus interest to the Federal Government--not to the school--within three years of being in breach. The interest rate charged will be equal to the legal maximum prevailing interest rate at the time the EFN or FADHPS recipient breaches the agreement.
The EFN/FADHPS contract requires all recipients to agree to a 5-year service commitment. If an EFN/FADHPS recipient were to decide not to enter primary care during the award year in which the funds were received, the school would have the option of reversing this award and replacing it with alternative funds (if available). However, once the award year has ended, any EFN/FADHPS recipient who decides not to enter primary care must repay the scholarship in full. To avoid interest accrual, the total amount of the scholarship award would have to be paid in full by the date the recipient is determined to be in default. Otherwise, the amount of the scholarship award, plus interest that accrues beginning on the date of default, must be repaid within 3 years of the date of default.
A breach of service obligation occurs when an EFN or FADHPS recipient:
For EFN and FADHPS recipients, schools are required to report defaulters to the Department for collection of the debt, and thus it would be the Department's responsibility to determine whether to reverse a default that was the result of the recipient's failure to provide proper documentation of compliance with the service obligation.
Fiscal Management, Collections, Chapter 2 also addresses penalties to EFN and FADHPS recipients who do not fulfill their primary health care service obligations.
Schools must report EFN /FADHPS defaulters to the Department within 30 days of determination. Submit the documentation as follows:
Mail above documentation to:
| DHHS/HRSA/BHPr |
| Division of Student Assistance |
| Office for Campus Based Programs |
| Scholarship Team |
| 5600 Fishers Lane, Room 8-34 |
| Rockville, MD 20857 |
[Section 795(b)(1) of the Public Health Service Act]
The Secretary of Health and Human Services has the authority to waive or suspend the EFN and FADHPS recipient's liability for failure to fulfill the primary health care service obligation. Specifically, the Secretary must waive or suspend repayments if:
Fiscal Management, Collections, Chapter 2 also addresses waivers and suspension of liability for EFN and FADHPS recipients.
[Section 795(b)(2) of the Public Health Service Act]
Students who are eligible for EFN and FADHPS awards may not receive funds in excess of the costs of certain budget items that are specified by the law and established by the school. The institution must award a full EFN or FADHPS scholarship to each designated recipient. One full scholarship is equal to tuition plus other reasonable educational expenses, including fees, books and laboratory expenses. Because of this requirement, partial scholarships cannot be made, however, institutional funds may make up the difference. If a school adds institutional funds to the award to bring it to the required level, these funds would become part of the debt owed to the Department in case of breach of contract by recipients. Schools with more funds than needed are encouraged to notify the Department as soon as possible so that those funds can be reallocated to a school that needs additional funding.
In addition to not exceeding these specified costs, the EFN or FADHPS award when added to the student's other resources may not be greater than his or her financial need. More information on determining a student's financial need appears in Chapter 3, Section 1C.
Since EFN/FADHPS scholarships do not cover living expenses, they are not taxable.
[Section 736(b)(3) of the Public Health Service Act]
There are no explicit requirements for disbursing EFN funds to eligible students who have been designated as scholarship recipients. However, FADHPS regulations require disbursements according to the student's need for each academic period. An academic period refers to semesters, trimesters, quarters, etc. Schools may not award the entire FADHPS scholarship in a lump sum to a student at the beginning of the academic year.
Good practice suggests that procedures for disbursing EFN awards should correspond with FADHPS requirements.
Statute and regulations governing the EFN and FADHPS program do not specify requirements for verifying student information, except that institutions must obtain photocopies of parents', students' (and spouses') tax returns with original signatures. Good practice also dictates that institutions should verify student information using the same procedures as for other programs. Readers are directed to Health Professions, HPSL, Chapter 3 and Health Professions, HEAL, Chapter 2 which discuss verification for the Health Professions Student Loan (HPSL) and the Heath Education Assistance Loan (HEAL), respectively. Financial aid administrators should also consider applying the same verification requirements to the EFN and FADHPS program that are mandated under the Higher Education Act for the Title IV programs administered by the Department of Education.
After the school has determined prior recipients for EFN and FADHPS awards, it should prepare an award letter to be forwarded directly to each applicant. The award letter should provide a space for the student to accept or reject the EFN and FADHPS award. Schools should also send duplicate copies to students, so they can retain one copy and return the original copy to the school.
EFN and FADHPS awards may not exceed the financial need of the student. This does not prohibit financial aid administrators from making adjustments to the cost of attendance or expected family contribution figures to more accurately reflect an individual student's financial circumstances. However, financial aid administrators must be judicious in their exercise of professional discretion in these instances. Further, they must carefully document all such changes. See Chapter 3 Section 1C for more information on determining students' financial need.
Institutions must maintain student records as needed for audit purposes. Good practice suggests that these records contain the same types of information that are maintained for the other health professions and nursing programs. For example, institutions should consider keeping the following information about each EFN and FADHPS recipient:
No requirement stipulates that these records should be maintained in files that are safeguarded against fire, theft and tampering. However, good practice again strongly supports institutionalefforts to keep EFN and FADHPS records--as well as all student records--in files that resist damage from various sources.
The Department of Health and Human Services permits institutions to maintain their records in a variety of formats at the option of the school. Record keeping formats include:
