(a) Default. A
recipient shall be placed in default if he/she has not been granted a waiver or
deferral by the commissioner and:
(1) the
recipient is not available to fulfill his/her service obligation on the start
date; or
(2) the recipient fails,
refuses or is unable to fulfill his/her service obligation; or
(3) an award is rescinded after dispersal of
award monies to the recipient.
(b) Dismissal. A recipient who is dismissed
from employment or discontinues practice at the location of his/her service
obligation, shall contact the Department of Health within 30 days of dismissal
or discontinuance. The commissioner may reassign the recipient to an alternate
underserved area. A recipient who is reassigned shall resume his/her service
obligation at the alternate location within 90 days of the dismissal or
discontinuance. A recipient who is reassigned and who fails to resume his/her
service obligation at the alternate location within 90 days of dismissal or
discontinuance shall be placed in default.
(c) Calculation of financial obligation. An
individual found to be in default will be required to pay the president, within
five years from the date of default, all monies received, plus interest, plus
liquidated damages, as determined by the following formula:
A = 2B (T-S)
T
where "A" is the amount the president is entitled to
receive; "B" is the sum of all payments made to the recipient and the interest
on such amount which would be payable if at the time such awards were paid they
were loans bearing interest at the maximum prevailing rate determined by the
Higher Education Services Corporation; "T" is the total number of months in the
recipient's period of obligated service; and "S" is the number of months of
service actually rendered by the recipient. The minimum number of months in the
recipient's period of obligated service shall be 24 months.
(d) The Department of Health shall advise the
Higher Education Services Corporation of any default, and the Higher Education
Services Corporation shall collect repayments and, where indicated, initiate
action for prosecution to recover monies owed the State.
