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AIB Extramural

Home > About the Programs > AIB Extramural > Loan Repayment Program Participation

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AIB Extramural


Repayable Debt

In exchange for a two-year (or three-year for the Intramural General Research LRP) commitment to your research career, the NIH will repay your educational loan debt at the rate of 25% annually, up to a maximum of $35,000 per year.  You will receive the maximum annual disbursement only if your repayable debt is equal to or greater than $140,000. The NIH Loan Repayment Programs (LRP) payment projections are based on the repayable debt calculated at the start of an LRP contract. Repayable debt is a participant's total eligible student loan debt (principal plus existing accrued interest) at the beginning of an LRP contract.

Repayable debt is computed using the loan documentation submitted with an LRP application.

NIH calculates your LRP award amount based on your repayable debt at the start of your LRP contract. NIH will repay 25 percent of your repayable debt annually, up to a maximum of $35,000 per year. You will receive the maximum annual disbursement only if your repayable debt is equal to or greater than $140,000 at the start of your LRP contract.

Repayable Debt Definitions

Debt Threshold: The debt threshold amount is used to establish basic eligibility to apply to the program -- participants must have total eligible educational loans that equal or exceed 20 percent of their annual institutional base salary at the time of initial participation in a loan repayment program.

Institutional Base Salary: The institutional base salary is the annual income or compensation that the organization pays for the applicant's appointment, whether the time is spent on research, teaching, patient care, or other activities. Institutional base salary excludes any income that an applicant earns outside the duties of the organization (Click here for more detailed information on salary and compensation).

Total Educational Debt: The Total Educational Debt is the principal, capitalized interest, interest projected from the beginning to the end of your LRP Contract, and related expenses (such as the required insurance premiums on the unpaid balances of some loans) of qualified U.S. Government (Federal, state, local), academic institutions, and commercial U.S. educational loans obtained by participants for: undergraduate, graduate, and health professional school tuition expenses; other reasonable educational expenses required by the school(s) attended, including fees, books, supplies, educational equipment and materials, and laboratory expenses; and reasonable living expenses, including the cost of room and board, transportation and commuting costs, and other living expenses as determined by the Secretary.

Repayable Debt Schedule

NIH will repay the remaining educational debt as follows ( Click here to see the estimated Annual Disbursement table):
  1. at the rate of 25% of the repayable debt for each year of qualified service, up to the $35,000 annual maximum per year;

  2. one or two year renewal contracts beyond the second year may be entered into;

  3. if the applicant's contract is renewed, the NIH will repay at the rate of 50% of the remaining repayable debt up to a $35,000 annual maximum; or 100% of the repayable debt if it is $10,000 or less.
In return for the repayment of their educational loans, LRP participants must agree to (1) engage in qualified research as specified during the period of the contract as a health professional engaged in qualifying research, (2) make payments to lenders on their own behalf for periods of Leave Without Pay (LWOP); (3) Pay monetary damages as required for breach of contract; and (4) satisfy all other terms and conditions of the LRP contract and application procedures.

Payments are to be made on a quarterly schedule after completion of qualified research, unless otherwise agreed to by the Secretary and the participant. Payments will not be made to lenders until the NIH receives confirmation of the receipt of the prior payment, the account balance and the Research Assignment/Employment Verification (obtained rom the Research Supervisor). Participants are responsible for obtaining payment confirmations, current account balances from their lenders, and ensuring that this information is provided to the NIH Division of Loan Repayment. Accounts are monitored to ensure accurate crediting of payments and to avoid lost or misapplied payments.

Examples of Loan Repayment Benefits

Example No. 1

Dr. Jackson has $51,900 of outstanding, qualified educational loans (principal and current interest) for which she has applied for repayment by the Loan Repayment Program for Pediatric Research (PR-LRP). She is selected to participate in the PR-LRP and her annual base pay at the date of program eligibility is expected to be $75,000.

Dr. Jackson's debt threshold is $15,000, or 20 percent of her $75,000 salary. Thus, she qualifies to submit an application for the PR-LRP, since she has total debt ($51,900) exceeding her threshold amount of $15,000.

Dr. Jackson qualifies to receive $51,900 in repayments. For the initial two-year contract, the Extramural Loan Repayment Program agrees to repay one-fourth of the repayable debt for each year of qualified service, or $12,975 per year for a total of $25,950 in her initial 2-year contract. She will have to apply for renewal contracts to receive additional payments toward the remaining repayable debt . If a renewal contract is awarded, Dr. Jackson will receive payments at the rate of one-half of the remaining repayable debt for the renewal period or $12,975 in loan repayments.

In addition, Dr. Jackson will receive tax reimbursements, equal to 39 percent of the loan repayments made to her lenders, to partially offset the increased Federal tax liability associated with loan repayments. These reimbursements are deposited with the Federal Reserve Bank for credit to her IRS tax account.

Example No. 2

Dr. Saunders has $95,000 of outstanding, qualified educational loans (principal and current interest) for which he has applied for repayment in the Loan Repayment Program for Clinical Research (LRP-CR). He is selected to participate in the LRP-CR and his annual salary at the date of program eligibility is expected to be $75,000.

Dr. Saunders's debt threshold is $15,000, or 20 percent of his $75,000 salary. Thus, he qualifies for participation in the LRP-CR, since he has total debt ($95,000) exceeding his debt threshold amount ($15,000).

Dr. Saunders qualifies to receive $95,000 in repayment. For the initial two-year contract, the Extramural Loan Repayment Program agrees to repay 25% of the repayable debt for each year of qualified service, or $23,750 per year for a total of $47,500 during his initial 2-year contract. He will have to apply for a renewal contract to receive additional payments toward the remaining repayable debt. If a renewal contract is awarded, Dr. Saunders will receive payments at the rate of one-half of the remaining repayable debt for the renewal period or $23,750.

In addition, Dr. Saunders will receive tax reimbursements, equal to 39 percent of the loan repayments made to his lenders, to partially offset the increased Federal tax liability associated with loan repayments. These reimbursements are deposited with the Federal Reserve Bank for credit to his IRS tax account.

Example No. 3

Dr. Sampson has $170,000 of outstanding, qualified educational loans (principal and current interest) for which she has applied for repayment in the LRP-CR. She is selected to participate in the LRP-CR and her annual salary at the date of program eligibility is expected to be $75,000.

Dr. Sampson's debt threshold is $15,000, or 20 percent of her $75,000 salary. Thus, she qualifies to apply the LRP-CR, since she has total debt ($170,000) exceeding her threshold amount ($15,000).

Dr. Sampson qualifies to receive $170,000 in repayment. For the initial 2-year contract, the Extramural Loan Repayment Program agrees to repay 25% of the repayable debt for each year of qualified service, up to a maximum of $35,000 per year, or a total of $70,000 during her 2-year contract. She will have to apply for a renewal contract to receive additional payments toward the remaining repayable debt. If a renewal contract is awarded, Dr. Sampson will receive payments at the rate of one-half of the remaining repayable debt for the renewal period up to the annual maximum of $35,000.

In addition, Dr. Sampson will receive tax reimbursements, equal to 39 percent of the loan repayments made to her lenders, to partially offset the increased Federal tax liability associated with loan repayments. These reimbursements are deposited with the Federal Reserve Bank for credit to her IRS tax account.

Tax Liabilities

Extramural Loan Repayment Program repayments made to lenders and tax payments made to the IRS represent taxable income for program participants. This income is reported annually to the IRS and the participant on Form 1099-G. To fully or partially offset Federal tax liability increases, the LRP makes payments equal to 39 percent of the total loan repayment amount directly to the participant's IRS (Federal tax) account simultaneously with each loan payment. Participants are responsible for paying any taxes resulting from loan repayment that are not covered by the 39 percent payment -- including Federal, State and local taxes. Participants should seek professional financial guidance regarding the tax consequences resulting from the LRP repayments.

Extending Participation

Participants may apply to continue their Extramural Loan Repayment Program participation. Renewal contracts are issued for one or two year periods and are based upon the same criteria as the initial contract. Additionally, a demonstration of research accomplishments during the previous contract is required. Progress toward development as an independent investigator is a major factor in renewal of Extramural Loan Repayment Program support. Renewal applications are competitively reviewed and the submission of a renewal application does not assure the award of benefits.

Portability of Award

During the initial two-year period and subsequent renewal periods the LRP awards are portable and can be transferred across institutions and research projects. However, the portability of the awards is subject to a review of continuing eligibility by the NIH Institute or Center (IC) that funded the award. In their review of continuing eligibility, the funding IC will assess the appropriateness of the research project, research environment, and mentoring plan, as well as reconfirm that basic eligibility conditions will be satisfied, e.g., that the research is supported by domestic nonprofit funding and will occupy at least 50 percent or more of your total level of effort for an average of at least 20 hours per week during each quarterly service period. That is, during each contract quarter, you must conduct the required research for a minimum of 240 hours (based on a 12-week quarter) or 260 hours (based on a 13-week quarter).

You should notify the NIH LRP of any changes to your research assignment and/or institution during the two-year period, and we will provide you with instructions on requesting NIH approval for the changes to your institution or research project. It is recommended that you advise us of these changes 2 months prior to their effective date, to allow sufficient processing time within the NIH.

If you are unable to establish qualifying research assignments for the two-year period, you should consider reapplying when you are in a better position to comply with the contract provisions. Loan repayment is expected to be offered every year.



Date Last Updated: May 12, 2013


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