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H H S Department of Health and Human Services
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About the Health Education Assistance Loan (HEAL) Program

(Authorized by Sections 701-720 of the Public Health Service Act)

New HEAL loans to student borrowers were discontinued as of September 30, 1998.  From fiscal year 1978 through 1998 the Federal Health Education Assistance Loan (HEAL) Program insured loans made by participating lenders to eligible graduate students in schools of medicine, osteopathy, dentistry, veterinary medicine, optometry, podiatry,  public health, pharmacy, chiropractic, or in programs in health administration, and clinical psychology.  HEAL refinancing occurred from fiscal year 1994 through fiscal year 2004.


Legislation states that the maximum interest which may be charged to the borrower on the unpaid balance of the loan may not exceed the average bond-equivalent rate during the prior calendar quarter for 91-day Treasury bills sold at auction, plus three percent, rounded to the next higher 1/8 of one percent.  Payment of principal and interest may be deferred during specific eligible periods of deferment.  The HEAL program does not provide a subsidy payment for interest.   Accrued interest may be compounded not more frequently than annually by adding it to the principal amount of the loan.


Repayment begins the first day of the 10th month after the month the borrower ceases to be a full-time student at a HEAL school.  The 9-month period before the repayment period begins is called the "grace period."  However, if the borrower becomes an intern or resident in an accredited program within 9 full months after leaving school, repayment will begin the first day of the 10th month after the borrower ceases to be an intern or a resident. A borrower has from 10 to 25 years to repay the loan after the repayment period starts even when the borrower participates in an authorized deferment program.  There is no penalty for prepayment.  Overdue accounts will be aggressively pursued and referred to collection agencies and credit bureaus or for legal action when borrowers fail to meet the terms of their loans.

Repayment schedule provisions may vary and affect the total amount to be repaid.

  • Lenders must offer a graduated repayment option to borrowers which require smaller payments early in the repayment period.
  • Lenders must offer an income contingent loan repayment schedule that, during the first 5 years of repayment is based on a borrower's income.


Forbearance is an extension of time for making loan payments or the acceptance of smaller payments than were previously scheduled to prevent a borrower from defaulting. Lenders have the authority to grant forbearance in six-month increments up to a maximum of three years.  Periods of forbearance may be extended beyond three years with the approval of the Secretary.  Any such period would be in addition to the 3-year period which lenders/holders can grant. Any period of forbearance granted to a HEAL borrower shall not be included in the 25 year loan repayment period for loans made on or after 10/13/1992. Lenders must notify each borrower of the right to request forbearance; however, if the lender determines that the default of the borrower is inevitable and that forbearance would be ineffective in preventing default, the lender is not required to grant forbearance.


Repayment of principal and interest can be deferred, but interest continues to accrue during periods of:

  • Full-time study at a HEAL school or at an institution of higher education participating in the Federal Family Education Loan Program;
  • Up to three years for full time active duty in the Armed Forces;
  • Up to three years each for service in the Peace Corps, VISTA or the National Health Service Corps;
  • Up to two years for certain fellowship and educational training programs;
  • Up to four years for internship and residency training;
  • Up to one year for graduates of schools of chiropractic;
  • Up to three years for completion of an internship or residency training program in osteopathic general practice, family medicine, general internal medicine, preventive medicine, or general pediatrics and is practicing primary care; and/or
  • Up to three years for providing health care services (beginning 02/01/1999) to Indians through any health program or facility funded in whole or part by the Indian Health Service for the benefit of Indians.


To be totally and permanently disabled the borrower must be unable to engage in any substantially gainful activity because of a medically determinable impairment that is expected to continue for a long and indefinite period of time or to result in death.  A borrower should contact their lender/servicer to discuss their situation and obtain the necessary paperwork to submit an application for total and permanent disability.


Lenders must:

  • Contact the borrower every 6 months to notify him/her of the amount of the debt;
  • Contact the borrower in writing 30-60 days before the commencement of the repayment period to establish the repayment terms;
  • Contact both the borrower and any endorser at least 4 times at regular intervals during the first 120 days of any delinquency period.
  • Notify national consumer credit reporting agencies regarding accounts overdue by more than 60 days; and
  • Request pre-claim assistance from the HEAL Program when the borrower is 90 days delinquent. (HEAL pre-claim assistance consists of three progressively stronger letters urging the borrower to contact his/her lender before the lender initiates litigation against the borrower.)


Lenders and holders are required to litigate defaulted loans and obtain a judgment against the borrower in most cases.   Litigation is not required when the loan involved was made in an amount of less than $5,000 prior to 11/04/1988 or the loan was made in an amount of less than $2,500 on or after 11/04/1988 or if the defaulted claim is less than $1,000.  Schools may assist in the collection of delinquent HEAL loans.  HEAL loans are exempted from any State or Federal Statute of Limitations provisions which limit the period within which a loan may be collected.


Defaulted borrowers are subject to the following:

  • Account referred to a collection agency;
  • Referral to the Inspector General, DHHS and the Department of Justice (DOJ);
  • DOJ registers the judgment in Federal court for enforced collection;
  • Exclusion from Medicare;
  • IRS offset;
  • Publish names of defaulters (who have not entered into a settlement agreement) in the Federal Register and on the Website at


Contact HEAL at 301-443-1540 or toll-free 1-877-411-4325 (1-877-411-HEAL)