§ 681.12 Deferment. ( a ) After the repayment period has commenced, installments of principal and interest need not be paid during any period: ( 1 ) During which the borrower is pursuing a full-time course of study at a HEAL school or at an institution of higher education that is a “participating school” in the William D. Ford Federal Direct Loan Program;
( 2 ) Up to 4 years during which the borrower is a participant in an accredited internship or residency program, as described in § 681.11(a)(2). For a borrower who receives his or her first HEAL loan on or after October 22, 1985, this total of 4 years for an internship or residency program includes any period of postponement of the repayment period, as described in § 681.11(a)(1);
( 3 ) Up to 3 years during which the borrower is a member of the Armed Forces of the United States;
( 4 ) Up to 3 years during which the borrower is in service as a volunteer under the Peace Corps Act;
( 5 ) Up to 3 years during which the borrower is a member of the National Health Service Corps; or
( 6 ) Up to 3 years during which the borrower is a full-time volunteer under title I of the Domestic Volunteer Service Act of 1973.
( b ) For any HEAL loan received on or after October 22, 1985, after the repayment period has commenced, installments of principal and interest need not be paid during any period for up to 2 years during which the borrower is a participant in: ( 1 ) A fellowship training program, which: ( i ) Is directly related to the discipline for which the borrower received the HEAL loan;
( ii ) Begins within 12 months after the borrower ceases to be a participant in an accredited internship or residency program, as described in § 681.11(a)(2), or prior to the completion of the borrower's participation in such program;
( iii ) Is a full-time activity in research or research training or health care policy;
( iv ) Is not a part of, an extension of, or associated with an internship or residency program, as described in § 681.11(a)(2);
( v ) Pays no stipend or one which is not more than the annual stipend level established by the Public Health Service for the payment of uniform levels of financial support for trainees receiving graduate and professional training under Public Health Service grants, as in effect at the time the borrower requests the deferment; and
( vi ) Is a formally established fellowship program which was not created for a specific individual; or
( 2 ) A full-time educational activity at an institution defined by section 435(b) of the HEA which: ( i ) Is directly related to the discipline for which the borrower received the HEAL loan;
( ii ) Begins within 12 months after the borrower ceases to be a participant in an accredited internship or residency program, as described in § 681.11(a)(2), or prior to the completion of the borrower's participation in such program;
( iii ) Is not a part of, an extension of, or associated with an internship or residency program, as described in § 681.11(a)(2); and
( iv ) Is required for licensure, registration, or certification in the State in which the borrower intends to practice the discipline for which the borrower received the HEAL loan.
( c ) ( 1 ) To receive a deferment, including a deferral of the onset of the repayment period (see § 681.11(a)), a borrower must at least 30 days prior to, but not more than 60 days prior to, the onset of the activity and annually thereafter, submit to the lender or holder evidence of his or her status in the deferment activity and evidence that verifies deferment eligibility of the activity (with the full expectation that the borrower will begin the activity). It is the responsibility of the borrower to provide the lender or holder with all required information or other information regarding the requested deferment. If written evidence that verifies eligibility of the activity and the borrower for the deferment, including a certification from an authorized official (*e.g.,* the director of the fellowship activity, the dean of the school, etc.), is received by the lender or holder within the required time limit, the lender or holder must approve the deferment. The lender or holder may rely in good faith upon statements of the borrower and the authorized official, except where those statements or other information conflict with information available to the lender or holder. When those verification statements or other information conflict with information available to the lender or holder, to indicate that the applicant fails to meet the requirements for deferment, the lender or holder may not approve the deferment until those conflicts are resolved.
( 2 ) For those activities described in paragraphs (b)(1) or (b)(2) of this section, the borrower may request that the Secretary review a decision by the lender or holder denying the deferment by sending to the Secretary copies of the application for deferment and the lender's or holder's denial of the request. However, if information submitted to the lender or holder conflicts with other information available to the lender or holder, to indicate that the borrower fails to meet the requirements for deferment, the borrower may not request a review until such conflicts have been resolved. During the review process, the lender or holder must comply with any requests for information made by the Secretary. If the Secretary determines that the fellowship or educational activity is eligible for deferment and so notifies the lender or holder, the lender or holder must approve the deferment.
(Approved by the Office of Management and Budget under control numbers 1845-0125 and 1845-0128)