Contract law filter - National Health Service Corps repayment, breach of
October 11, 2018 10:04 AM Subscribe
A friend of mine just started his first job as a medical doctor after completing residency. He isn't from the United States and doesn't have much in the way of financial education; so although he had previously entered into a contract with the National Health Service Corps to work in primary care in a rural area, he didn't read the fine print as he didn't think it mattered. Long story short, despite essentially fulfilling the same sort of job as specified in the contract, and although he is still actively trying to make this right, they are now coming after him for what seems like a truly extortionate amount of money, and it's beginning to destroy his sanity.
Looking for advice or tips on what sort of lawyer to contact for legal advice.
From my understanding, he thought he could fulfill his contracted obligation with the NHSC and still work his current job. Either that or he may have completely forgotten about this over the last few years since signing the contract, I wouldn't be surprised.
After some back and forth with the lawyer assigned to his case, they essentially stated that he can either quit his current job (which would entail financial penalties to his current employer) or immediately pay them something like 500,000, although the original loan was less than 100,000.
For my part I am completely baffled, as that seems absurdly extortionate; not to mention draconian and kafkaesque. Furthermore, there doesn't seem to be any system in place where they have assigned him a job on graduation, to ensure that he fulfills his obligation; he has to find a job and then apply, hoping it meets their criteria. They don't seem to have any interest in working out a deal, or meeting him halfway. He would struggle for a few years but ultimately be fine paying them 200k or even 300k; it seems fair for breaking a contract but 500% seems insane, and it's causing him to lose sleep and seemingly go to a dark place mentally for the last few weeks. I suggested almost as a joke he should just declare bankruptcy and walk away, but apparently despite the fact it isn't a student loan per se, this is prohibited under the terms of the contract. I don't understand how that's possible.
I would welcome any advice or tips on how to find an appropriate attorney to help my friend out. Thanks in advance!
From my understanding, he thought he could fulfill his contracted obligation with the NHSC and still work his current job. Either that or he may have completely forgotten about this over the last few years since signing the contract, I wouldn't be surprised.
After some back and forth with the lawyer assigned to his case, they essentially stated that he can either quit his current job (which would entail financial penalties to his current employer) or immediately pay them something like 500,000, although the original loan was less than 100,000.
For my part I am completely baffled, as that seems absurdly extortionate; not to mention draconian and kafkaesque. Furthermore, there doesn't seem to be any system in place where they have assigned him a job on graduation, to ensure that he fulfills his obligation; he has to find a job and then apply, hoping it meets their criteria. They don't seem to have any interest in working out a deal, or meeting him halfway. He would struggle for a few years but ultimately be fine paying them 200k or even 300k; it seems fair for breaking a contract but 500% seems insane, and it's causing him to lose sleep and seemingly go to a dark place mentally for the last few weeks. I suggested almost as a joke he should just declare bankruptcy and walk away, but apparently despite the fact it isn't a student loan per se, this is prohibited under the terms of the contract. I don't understand how that's possible.
I would welcome any advice or tips on how to find an appropriate attorney to help my friend out. Thanks in advance!
I used a similar program for nurses. It seems like there were many approved sites available. It sucks for your friend but it seems like he's violating a contractual agreement.
posted by latkes at 10:24 AM on October 11, 2018 [2 favorites]
posted by latkes at 10:24 AM on October 11, 2018 [2 favorites]
they essentially stated that he can either quit his current job (which would entail financial penalties to his current employer) or immediately pay them something like 500,000
Are the "financial penalties" to his current employer more than $500,000?
I'm having trouble imagining they are.
It seems like there were many approved sites available
Same with NHSC - there are more than 5000 locations where he can work.
posted by NotMyselfRightNow at 10:34 AM on October 11, 2018 [1 favorite]
Are the "financial penalties" to his current employer more than $500,000?
I'm having trouble imagining they are.
It seems like there were many approved sites available
Same with NHSC - there are more than 5000 locations where he can work.
posted by NotMyselfRightNow at 10:34 AM on October 11, 2018 [1 favorite]
The HPSA site designation and scoring process is the foundation of NHSC's loan repayment arrangement. "Same sort of job" doesn't cut it.
he has to find a job and then apply, hoping it meets their criteria.
That's not how it works. The criteria are not mysterious, and there's a job portal for designated sites. If a site isn't designated but looks like it could meet the criteria, it's possible to work with administrators to get it scored before starting work. Your friend needs to find a job at a designated site.
posted by holgate at 10:38 AM on October 11, 2018 [4 favorites]
he has to find a job and then apply, hoping it meets their criteria.
That's not how it works. The criteria are not mysterious, and there's a job portal for designated sites. If a site isn't designated but looks like it could meet the criteria, it's possible to work with administrators to get it scored before starting work. Your friend needs to find a job at a designated site.
posted by holgate at 10:38 AM on October 11, 2018 [4 favorites]
He should fulfill his moral (and legal) obligation to the NHSC and find an employment lawyer to see if the lawyer can help him mitigate the penalties owed to his current employer.
posted by Jahaza at 12:53 PM on October 11, 2018 [3 favorites]
posted by Jahaza at 12:53 PM on October 11, 2018 [3 favorites]
Can you clarify what you mean by "financial penalties to his current employer"? As stated above, his being held liable in some financial way for leaving his current employer would be unusual. Was he hired under some sort of non-transferrable grant program or something? If that's not the case, and he's just concerned about potential harm for the current employer or losing their goodwill, well, that sucks, but he should just quit and find an employer that will help him meet his NHSC obligations.
Unfortunately, "absurdly extortionate; not to mention draconian and kafkaesque" is a succinct summation of student loans and how they work in the US, and there's no way out of it once you're in. Literally the only way your friend can be "actively working to make this right," within the system, is finding and starting a job that qualifies under the guidelines. Nothing else will do, and he should start that process today.
posted by halation at 1:44 PM on October 11, 2018 [1 favorite]
Unfortunately, "absurdly extortionate; not to mention draconian and kafkaesque" is a succinct summation of student loans and how they work in the US, and there's no way out of it once you're in. Literally the only way your friend can be "actively working to make this right," within the system, is finding and starting a job that qualifies under the guidelines. Nothing else will do, and he should start that process today.
posted by halation at 1:44 PM on October 11, 2018 [1 favorite]
Best answer: Praemunire and halation, the MD in question probably either got a signing bonus or a stipend during residency that he'd have to pay back. It's not uncommon for places that are hard to recruit to (like the rural areas) to pay residents a small salary during residency in return for a commitment to practice for a few years afterward. There may also be financial penalties (like repaying malpractice premiums) in the contract. It sounds like he didn't read his NHSC contract very carefully so he may have signed a disadvantageous contract for his job as well.
The NHSC is not kidding around, unfortunately. There is a lot of demand for that kind of loan repayment and they want to make sure that people who sign up for it will actually practice in those underserved areas, so they make the penalties for not starting at all pretty draconian. They are also real sticklers for the letter of the law--a friend of mine had to extend her time commitment with them because her job gave her more vacation time than the NHSC allowed her to take.
The optimal solution would be for him to get his current practice site reclassified as NHSC-eligible. If he's working in a rural area with a high HPSA (health professions shortage area) score he may be able to do this. If he's working at an FQHC he'd be automatically eligible. Just because his site isn't an approved site right now doesn't mean it's not eligible--lots of administrators don't understand the program or haven't bothered to check into it.
posted by The Elusive Architeuthis at 9:10 PM on October 11, 2018 [2 favorites]
The NHSC is not kidding around, unfortunately. There is a lot of demand for that kind of loan repayment and they want to make sure that people who sign up for it will actually practice in those underserved areas, so they make the penalties for not starting at all pretty draconian. They are also real sticklers for the letter of the law--a friend of mine had to extend her time commitment with them because her job gave her more vacation time than the NHSC allowed her to take.
The optimal solution would be for him to get his current practice site reclassified as NHSC-eligible. If he's working in a rural area with a high HPSA (health professions shortage area) score he may be able to do this. If he's working at an FQHC he'd be automatically eligible. Just because his site isn't an approved site right now doesn't mean it's not eligible--lots of administrators don't understand the program or haven't bothered to check into it.
posted by The Elusive Architeuthis at 9:10 PM on October 11, 2018 [2 favorites]
Best answer: There is a lot of demand for that kind of loan repayment and they want to make sure that people who sign up for it will actually practice in those underserved areas
And there are only a few hundred LRP and S2S awards granted each year.
The default penalties are very much spelled out: the repayment amount plus $7500 for every month not served plus interest, due within a year. And yes, the best way to resolve this is if his current site is automatically eligible and administrators file the necessary paperwork.
posted by holgate at 6:34 AM on October 12, 2018
And there are only a few hundred LRP and S2S awards granted each year.
The default penalties are very much spelled out: the repayment amount plus $7500 for every month not served plus interest, due within a year. And yes, the best way to resolve this is if his current site is automatically eligible and administrators file the necessary paperwork.
posted by holgate at 6:34 AM on October 12, 2018
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Can his current employer become an NHSC site?
There are lots of inner-city, non-rural options, but he needs to be geographically flexible.
posted by 8603 at 10:13 AM on October 11, 2018 [2 favorites]