Loans for Disadvantaged Students Summary

Loans for Disadvantaged Students (LDS)

The LDS program provides low-interest loans to UCI College of Medicine students with financial need to help pay their costs of medical education. The LDS is a campus-based loan funded by the U.S. Department of Health and Human Services. UCI is the lender.

Loan limits: Variable

Total origination or insurance fee: None

Interest rate: 5 percent per year

Prepayment: No penalty for early repayment

Initial grace period: 1 year

Repayment period begins: 1 year after leaving UCI

Repayment period: Up to ten years

Minimum payment: $45 per quarter, or
if the borrower is more than 60 days past due, the minimum payment is $15 monthly

Credit reporting: Reported to three national credit bureaus: Equifax, Experian, and TransUnion

Late charges: $6 per quarter

Late charges are assessed for failure to make timely payment of all or any part of a scheduled installment or to submit appropriate deferment requests on time.

Deferments: Upon approval of properly documented written requests, borrowers may defer making scheduled installments, and interest will not accrue, during the following periods:

Advanced Professional Training
Pursuing advanced professional training, including internships and residencies.

Student Deferment
Pursuing a full-time course of study at a health professions school eligible for participation in the Health Profession Student Loan Program.

For a period, not to exceed 2 years, when a borrower leaves UCI with the intent to return as a full-time student, while engaging in a full- time educational activity directly related to the health profession for which the borrower is preparing.

Military Service
For a period, not to exceed 3 years, while on full-time active duty as a member of the Armed Forces of the United States.

Peace Corps Service
For a period, not to exceed 3 years, while serving as a volunteer under the Peace Corps Act.

Fellowship Training
For a period, not to exceed 2 years, while participating in a training program or a full-time educational activity which is directly related to the health profession for which the borrower prepared at UCI, and which is engaged in within 12 months after the completion of advanced professional training (internship and residency).

Death cancellation: The total amount owed on the loan is canceled in the event of the death of the borrower.

Permanent and total disability: The total amount owed on the loan is canceled if the borrower becomes permanently and totally disabled after receiving the loan.

Repayment by the Secretary: Subject to the availability of funds and upon application by the borrower, the Secretary may:

enter into an agreement with the borrower under which the Secretary may repay all or part the loan for services by the borrower for at least 2 years in a health manpower shortage area, as identified by the Secretary.
repay all or part of a borrower's loan which is outstanding, if the Secretary determines that the borrower: 1) failed to complete the course of study leading to the first professional degree for which the loan was made; 2) is in exceptionally needy circumstances; 3) is from a low-income or disadvantaged family; and 4) has not resumed professional medical education within a period of two years following the date the borrower ceased the course of study for which the loan was made.

Default: Failure to make an installment payment when it is due or to comply with the other terms of the promissory note may result in the following:

Loss of deferment benefits
Imposition of late charges
Negative reports to national credit bureaus
Suspension of campus services including registration, transcripts, and diplomas
Withholding California State Tax refunds and applying them to past-due loans
Loan acceleration
Assessment of collection costs, attorney fees, and litigation costs
Referral of the loan to an outside collection agency
Referral of the loan to the Secretary for collection assistance, including offset of Federal salaries
Ineligibility for further student financial assistance

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