The purpose of the Maryland Loan Assistance Repayment Program for Foster Care Recipients is to provide State assistance in the repayment of educational loans owed by foster care recipients who are employed by the State, or by a county or municipality of the State, and who received a graduate or undergraduate degree from an institution of higher education in the State. In this chapter, the following terms have the meanings indicated. Terms Defined. “Foster care recipient” means an individual who was placed in an out-of-home placement by a state or unit of a state government’s department of social services for 3 years or more “Higher education loan” means any loan for undergraduate or graduate study that is obtained by a foster care recipient for tuition, educational expenses, or living expenses from: An institution of higher education, government, or commercial entity; or An entity that is exempt from taxation under §501(c)(3) or (4) of the Internal Revenue Code. “MLARP Foster Care” means the Maryland Loan Assistance Repayment Program for Foster Care Recipients. “OSFA” means the Office of Student Financial Assistance within the Maryland Higher Education Commission. “Secretary” means the Secretary of Higher Education for the State. To be eligible for assistance under MLARP Foster Care, an applicant: Shall have received an undergraduate or graduate degree from an institution of higher education located within the State; Shall be employed at least 20 hours per week by the State, or by a county or municipality of the State; May not be in default on any higher education loan; and Shall be a foster care recipient, as defined under Regulation .02 of this chapter. To be considered for assistance under MLARP Foster Care, an applicant shall provide to OSFA: A completed application, in the form prescribed by OSFA; A copy of the applicant’s State tax return for the most recent available year or, if the applicant did not file a tax return with the State, a copy of the applicant’s most recent federal tax return or Letter 1077 from the IRS confirming nonfiling status; Proof of graduation from an institution of higher education within the State; Verification of being a foster care recipient, as defined under Regulation .02 of this chapter; A statement from an eligible employer confirming the nature of the job, length of employment, and at least part-time employment status; and Documentation of current repayment data on all educational loans. An applicant for assistance in the repayment of a commercial loan shall demonstrate to OSFA that the commercial loan was used for tuition, educational expenses, or living expenses for undergraduate or graduate study. Applications shall be received between October 1 and December 15 of each year. An application postmarked later than December 15 will not be considered. Each applicant shall agree to provide any information or documentation requested by OSFA for the purpose of administering this program and, if requested, shall sign an authorization for the release of information to OFSA for the purpose of administering this program. The applicant’s failure or refusal to provide requested information or a signed authorization may result in a determination of ineligibility, the cancellation of an award, and the denial of a request for the deferment or waiver of a service obligation. An award amount shall be determined by the Secretary, acting through OSFA, based upon a recipient’s verified overall reported educational debt at the time of application. Award funds are distributed in annual amounts, for up to 3 years, provided that the recipient remains eligible and continues to submit required annual employment, lender, and tax documentation. An award amount shall be equal to the lesser of 10 percent of the applicant’s total educational loan debt, or $5,000, for each year the individual qualifies. Eligible applicants shall be ranked and awarded in the order of the submission dates of their completed applications. Applicants who are not selected shall be placed on a waitlist pending the availability of funding. Applicants not selected in an award year must reapply for consideration in a subsequent award year, and will be ranked according to the submission dates of their completed applications in the year the award is granted. OSFA may verify information concerning applicants and recipients for the purpose of administering this program. A recipient shall furnish to OSFA written acceptance of the award and a signed promissory note and employment obligation agreement. The promissory note and service obligation agreement shall include: The obligations of the recipient; The total and annual amounts of the award; Penalties for breach of contract; Circumstances under which the obligation may be canceled, suspended, or waived; and Any other terms the Secretary considers necessary. A recipient shall: Verify eligible employment initially, after 6 months, and at the end of each year in the program; Verify the current status of all educational loans each year in the program; Verify, at the time of the initial application only, being a foster care recipient as defined in Regulation .02 of this chapter; Submit a copy of the recipient’s State tax returns for any year during which an award is received, and federal returns if requested; and Notify OSFA of any change in employment status. OSFA shall require annual verification that the recipient is fulfilling the recipient's obligation under the service obligation agreement. Prior to issuing checks for subsequent years of service, OSFA shall receive confirmation from the eligible employer that the recipient, in accordance with the service obligation agreement, remains employed. Recipients of the MLARP Foster Care shall receive an annual loan repayment under the following conditions: OSFA shall verify the recipient’s employment and lender information; OSFA shall issue an annual check co-payable to the recipient and the lender; and The recipient shall endorse the check and forward it to the lender. If a recipient fails to notify OSFA that the recipient receives other loan repayment assistance, the recipient’s MLARP Foster Care award shall be canceled. If a recipient is employed for at least 20 hours per week at an eligible employer, the employment obligation shall be fulfilled at a rate of 1 year for each year that the award was received. Those recipients not completing the required employment obligation shall be responsible for repaying the award in full or in part, proportionally to that part of the year for which eligible employment was not completed. A recipient shall be deemed to be in breach of the promissory note and employment obligation agreement if, among other reasons specified in the note and agreement, the recipient does not maintain eligible employment in fulfillment of the employment obligation. If a recipient fails to carry out the obligations required under this chapter, the recipient shall repay the State the amount of the award provided plus interest. Repayment may be prorated if the recipient partially fulfills the employment obligation, as determined under Regulation .10 of this chapter. If repayment is required, interest on the funds provided to the recipient shall accrue at an interest rate equal to the interest rate established by the U.S. Department of Education for the Federal Stafford Loan on the first day of July of each year. Interest shall begin accruing as of the date the funds are provided to the student. A recipient may request that repayment required under Regulation .12 of this chapter be deferred: For up to 1 year, if the recipient is unable to maintain employment within the recipient’s current field because the recipient must care for a spouse or child who is disabled; and For up to 3 years, or longer as provided for under §E of this regulation, if the recipient or the recipient’s spouse is assigned to military duty outside of the State. A recipient’s deferment request shall include satisfactory supporting documentation. Such documentation shall consist of the following, as applicable: A sworn affidavit by a qualified physician that the recipient is unable to maintain employment within their current field because the recipient must care for a spouse or child who is disabled; or A copy of military orders. OSFA shall review all documentation and determine if the deferment conditions have been met and, if so, determine the deferment period. OSFA’s determinations regarding whether to grant deferment and the length of deferment are final. During a deferment approved by OSFA, a recipient need not make repayments, and interest does not accrue. OSFA may under extenuating circumstances grant the request of a recipient who is assigned, or whose spouse is assigned, military duty outside of the State, to extend the deferment of repayment beyond 3 years. The recipient’s request shall be in writing and shall include a copy of the military orders. Any employment or payment obligation incurred by a recipient is canceled upon the recipient’s death, upon provision to OSFA of a death certificate, or other evidence of death that is conclusive under State law. OSFA may waive or temporarily suspend a recipient's employment obligation: If, in the determination of the Director of OSFA, compliance by the recipient with the terms and conditions of the employment obligation agreement is impossible or would involve extreme hardship; Due to an extended illness of the recipient verified by a physician; or Due to extenuating family circumstances as determined by the Director of OSFA. OSFA may suspend a recipient’s employment obligation: For up to 3 years, if the recipient or recipient’s spouse is assigned military duty outside of the State; or For up to 6 months, if the recipient is on parental leave. Education Article, §§11-105(u) and 18-3206, Annotated Code of Maryland Effective date: July 30, 2018 (45:15 Md. R. 727)