Health and Human Services Department Nurse Faculty Loan Program (NFLP)

Under the Affordable Care Act, Public Law 111-148, Title VIII, section 846A was amended to increase the annual loan limit to $35,500 from $30,000 and will be adjusted after FY 2011 to provide for cost-of-attendance increases for the yearly loan rate and the aggregate loan. Section 847(f) added a funding priority for sections 847 and 846A of the PHS Act. This funding priority will be awarded to School of Nursing Student Loans that supports doctoral nursing students.
Eligible applicants are accredited collegiate schools of nursing that offer an advanced nursing degree program(s) that prepare graduate students to teach.

The United States Department of Health and Human Services (HHS), acting through the Health Resources and Services Administration (HRSA) is authorized to enter into an agreement with the school and make an award to the school in the form of a Federal Capital Contribution (FCC). The school must use the FCC to establish a distinct account called the NFLP fund. The school is required to deposit an Institutional Capital Contribution (ICC) that is equal to no less than one-ninth of the FCC. The account may only be used to make loans to graduate nursing students who agree to meet the requirements of the NFLP and for the costs associated with the collection of the loans and the interest on the loans.

Participating schools make NFLP loans from the loan fund to eligible graduate (master’s and doctoral) nursing students to complete their nursing education programs. Students may receive NFLP loans up to $35,500 per academic year for a maximum of five years to support the cost of tuition, fees, books, laboratory expenses and other reasonable education expenses. Following graduation from the nursing program, the nursing school will cancel up to 85 percent of the loan principal and interest in exchange for the loan recipient’s service as a full-time nursing faculty at a school of nursing, with a certain percentage cancelled each year for up to four years.

The loan cancellation over the four-year period is as follows: 20 percent of the principal and interest may be canceled upon completion of each of the first, second, and third years of full time employment, which, after the three year period, totals 60 percent, followed by the cancellation of 25 percent of the principal and interest upon completion of the fourth year of full-time employment as a faculty member in an accredited school of nursing. Repayment on the remaining 15 percent of the loan balance is postponed during the cancellation period. NFLP loans are repayable and/or cancelled over a ten-year repayment period that begins 9 months after the individual ceases to pursue a course of study at a school of nursing. NFLP loans accrue interest at a rate of three percent per annum for loan recipients who establish employment as nurse faculty.