REPAYMENT OF YOUR NORTH CAROLINA STUDENT LOAN PROGRAM FOR HEALTH, SCIENCE AND MATHEMATICS (HSM) SCHOLARSHIP LOAN
WHAT YOU MUST KNOW
You made a commitment to repay the funds you received from the state of North Carolina when you signed the promissory note(s) for the HSM scholarship loan. The goal of the HSM is to provide financial resources to students with the expectation that these resources will be repaid through employment (work service) in areas of health, science and mathematics as specified in the
Regulations Governing the Need-based Scholarship-loan Programs
. The preferred method for you to repay your scholarship loan is by working in an approved position and site in North Carolina for one year for each year the HSM scholarship-loan was received.
If you do not meet the work service requirement, then your loan must be repaid in cash with 10% interest (15% interest if you move/live outside of the state of North Carolina) on the principal amount borrowed beginning 90 days from the first date of ineligibility. Ineligibility occurs when you fail to meet the requirements for the program (i.e., drop out of school, do not work as specified, or do not graduate). These are your responsibilities.
Building/Maintaining Good Credit
Repaying loan obligations on time helps you:
Maintain your credit rating in good standing.
Avoid extended interest payments.
Avoid negative activity reported to credit bureaus.
Avoid additional monetary or other penalties imposed by a collection agency or by legal action.
Apply payments to only principal and interest, not to penalty fees.
Service cancellation or cash repayment must begin within 90 days following graduation or within 90 days of the first date on which you become ineligible (The actual date is provided in your graduation letter).
You MUST contact NCSEAA at the beginning of your employment. Before service cancellation can begin, NCSEAA must have proof that you completed your degree, and you must also complete an Application for Service Cancellation. Unless the NCSEAA is notified that service cancellation should begin, cash payments will be expected.
Remember to check with us to see if your scholarship loan can be forgiven if you have worked for at least six months in North Carolina following completion of a program for which you received funding.
WHAT IF YOU CAN'T MAKE A PAYMENT?
If you ever have financial difficulties making cash repayments, contact the NCSEAA as soon as possible before your account becomes past due. Contact us immediately to
Call one of our Repayment Counselors at 800-700-1775, Ext. 312, or 919-549-8614, Ext. 312.
We are aware that occasionally circumstances arise that make repayment more difficult or sometimes impossible. Our goal is to help you keep your account in good standing and avoid additional collection actions for unexcused non-payment.
Depending on your program, you may be eligible for:
Temporary reduced monthly payments if you provide appropriate documentation to justify the reduction.
Repayment postponements or deferments for being in school, or in a medical or unemployment hardship situation.
Postponement of Repayment
A deferment is a temporary postponement of repayment for a specified period of time. Interest DOES accrue during deferment. Under certain circumstances (personal illness, maternity leave, unemployment, or full-time enrollment in school), you may request a "deferment" of repayment. If you have a change of circumstances that you think would qualify for deferment, you must contact the NCSEAA. If you are in cash repay, then you must continue to make payments until the deferment is approved.
DEFAULT MEANS SERIOUS CONSEQUENCES
If you default - that is, do not repay your educational loan as promised, you will lose your eligibility for any state-funded assistance for education. Defaulting on a loan results in serious consequences that can affect you for many years.
Defaulting on a loan means:
The default status of your loan may be reported to national credit bureaus.
This may seriously damage your credit rating and your ability to obtain additional credit for car loans, home mortgages or credit cards.
You will be subject to an increase in your total debt as a result of assessment of projected collection costs.
These costs could add 25% or more to the amount you otherwise would owe for loan principal and interest. Collection costs are prorated as a portion of each payment you make for principal and interest. Payments are applied first towards collection costs owed, then towards interest accrued, and, lastly, towards the loan principal.
NCSEAA will pursue these collection actions for repayment of a defaulted loan:
Refer your account to a collection agency;
Seize your State tax refunds;
Contact your employer, if you are a State employee, for wage garnishment of up to 10% of your disposable income;
Transfer your loan to the State Attorney General's Office for collection/legal action.