NHSC Contract Hell - Please help!!

[jayzthedentist]

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I am a new dental grad as of May. I need any help I can get and didn't know if the medical community could offer it. In January of 2017 I applied for an NHSC student to service scholarship as one of many options for employment. With this scholarship, you get $120,000 of loan forgiveness in exchange for 3 years of service in an under-served area as determined by the NHSC. I went on a medical mission trip and got extremely sick and I subsequently failed my part 2 board exams. Due to this failure, I was unable to start practicing by the August 1st deadline. August 1st the day that you were required to start working for the NHSC. I called up my contact at the NHSC before August 1st and told her about my situation and how I couldn't do the NHSC anymore. She said she would take care of the paperwork. Several weeks later I got an email saying I had been suspended from the NHSC. I assumed (stupidly) that my contract had been voided. After passing all the board exams, I accepted a job at a wonderful private practice where I currently work. Today I got a call from the NHSC asking me when I would start working for an NHSC site. I told them that I was under the impression I was no longer affiliated with the NHSC. They told me this was not the case and that I was expected to work at an NHSC site and was still under contract. I told them I would like to get out of the contract, as they had not given me a dime to payback my loans. They said this would be a breach of contract and as such it would cost me $7,500 per month of me not being employed at an NHSC site. Since my commitment was for 36 months, I would literally owe the federal government $270,000! I had never even taken any money from the NHSC! This is like indentured servitude! I have never in my life even heard of such a penalty for a breach in contract. I have hired a contract attorney but was wondering if anyone has heard of a way to safely get out of an NHSC contract? I was absolutely blown away by this. Please let me know if you have any questions and I would appreciate any help immensely. Attached is the contract.

 

[smq123]

Moving to the NHSC forum.

 

[smq123]

So, a few things to remember:
- The NHSC is not perfect. It has a high turnover rate, and their staff is not the most dedicated and most caring in the world.

- Sometimes, they take action that is knee-jerk and it is often due to a clerical error on their part.

You can absolutely fight this. If you can prove that they never disbursed you any money, then you can absolutely prove that you do not owe them anything.

HOWEVER, you have to be persistent and keep records of every piece of correspondence that you have with them. It is annoying, and you will have to nag them like you won't believe, but you can absolutely fight this and win.

 

[deleted480308]

As I read that contract, you owe the money. You may be able to get out of that and even get the payments by serving your time though

There does not appear to be an “oops, i want out” clause

 

[jayzthedentist]

Thank you so much for the encouragement! I already have over $350,000 in student loans so adding another $270,000 on top of that would be backbreaking. I definitely can prove they have not given me any money at all. And even their financial people said that! My contract attorney told me we may need to bring this to court because the breach of contract penalty is so excessive it can be deemed unjust. Do you know anyone who has been able to successfully argue this without bringing it to court?

So, a few things to remember:
- The NHSC is not perfect. It has a high turnover rate, and their staff is not the most dedicated and most caring in the world.

- Sometimes, they take action that is knee-jerk and it is often due to a clerical error on their part.

You can absolutely fight this. If you can prove that they never disbursed you any money, then you can absolutely prove that you do not owe them anything.

HOWEVER, you have to be persistent and keep records of every piece of correspondence that you have with them. It is annoying, and you will have to nag them like you won't believe, but you can absolutely fight this and win.

 

[jayzthedentist]

As I read that contract, you owe the money. You may be able to get out of that and even get the payments by serving your time though

There does not appear to be an “oops, i want out” clause

Thats the thing, they never gave me any money. I don't know what the BOC penalty pays for since I have never received any money from any NHSC site or federal government.

 

[smq123]

As I re-read your post, I believe that what likely happened is that "the right hand didn't know what the left hand is doing." Unfortunately, it happens with the NHSC from time to time.

If you have hired a lawyer, they can help you fight this, although you could probably do this on your own. Especially if you kept a copy of the original email saying that your NHSC contract was suspended.

One of my friends got a letter from the NHSC saying that she had inappropriately used their loan repayment money for a non-educational loan (which was incorrect). They were going to charge her $15,000 to repay them for that. She had to argue with them, but she provided them with the paperwork showing that the money was absolutely used for an educational loan, and they left her alone after that.

 

[deleted480308]

Thats the thing, they never gave me any money. I don't know what the BOC penalty pays for since I have never received any money from any NHSC site or federal government.

They were prepared to pay as far as I can see, you are the one who breached by the way you’ve described it

 

[jayzthedentist]

I actually haven't breached the contract because I got an extension to find a job. But either way, no normal contract has a outrageous penalty for a breach like that. Most contracts say you can terminate any time for any reason.... Stupid for me to sign it but I thought when I backed out over the phone the lady took care of it..

They were prepared to pay as far as I can see, you are the one who breached by the way you’ve described it

 

[jayzthedentist]

As I re-read your post, I believe that what likely happened is that "the right hand didn't know what the left hand is doing." Unfortunately, it happens with the NHSC from time to time.

If you have hired a lawyer, they can help you fight this, although you could probably do this on your own. Especially if you kept a copy of the original email saying that your NHSC contract was suspended.

One of my friends got a letter from the NHSC saying that she had inappropriately used their loan repayment money for a non-educational loan (which was incorrect). They were going to charge her $15,000 to repay them for that. She had to argue with them, but she provided them with the paperwork showing that the money was absolutely used for an educational loan, and they left her alone after that.

Thats good your friend was able to win. I hope I can as well and can avoid a lengthy legal battle. My lawyer has everything, including that email of suspension.

 

[deleted480308]

I actually haven't breached the contract because I got an extension to find a job. But either way, no normal contract has a outrageous penalty for a breach like that. Most contracts say you can terminate any time for any reason.... Stupid for me to sign it but I thought when I backed out over the phone the lady took care of it..

You got an extension to find an nhsc job and then breached by not doing so and refusing to go to one when they called you. No, “most” contracts do not give a walk out at any time without penalty.

And yes, you should read all govt contracts more carefully.

I know it seems like I’m busting your chops here, I wish you well....but your case isn’t as one sided in your favor as you seem to think

 

[BidingMyTime]

I actually haven't breached the contract because I got an extension to find a job. But either way, no normal contract has a outrageous penalty for a breach like that. Most contracts say you can terminate any time for any reason.... Stupid for me to sign it but I thought when I backed out over the phone the lady took care of it..

Actually, the whole deal behind a contract is to prevent either party from just backing out for any reason. If nobody cared about your backing out, then you would just be hired as an at-will employee.

I'm guessing you have signed a contract with your current employer, and you also just can't "quit" and go to work for the NHSC without a penalty there. But depending on the penalty there-which I would guess is probably much less than for the NHSC, quitting and going to work for the NHSC might be your best option, if you can't get out of paying the NHSC penalty.

And as you've learned, a "suspension" is not the same thing as a contract termination.

The way the contract reads, is does indeed sound like you must pay a penalty for anytime not worked, regardless of whether or not they paid out any money. This makes sense, because they were counting on your working, and would have possibly denied other applicants for the repayment, because of the contract you had signed. But I'm not a lawyer, hopefully your lawyer will be able to figure out an "out" for you. If an "out" is allowed from the contract, then I would think a certified letter from your lawyer should be enough to get the NHSC to let you go. If there is not a clear "out" in the contract, then I'm guessing it would be likely the case will have to go to court, as from what you've told us here, it seems like the NHSC isn't willing to back down and let you go.

 

[smq123]

Out of curiosity, why DIDN’T you apply for an NHSC job as soon as you passed your boards the second time?

 

[fixemupnp]

I am a new dental grad as of May. I need any help I can get and didn't know if the medical community could offer it. In January of 2017 I applied for an NHSC student to service scholarship as one of many options for employment. With this scholarship, you get $120,000 of loan forgiveness in exchange for 3 years of service in an under-served area as determined by the NHSC. I went on a medical mission trip and got extremely sick and I subsequently failed my part 2 board exams. Due to this failure, I was unable to start practicing by the August 1st deadline. August 1st the day that you were required to start working for the NHSC. I called up my contact at the NHSC before August 1st and told her about my situation and how I couldn't do the NHSC anymore. She said she would take care of the paperwork. Several weeks later I got an email saying I had been suspended from the NHSC. I assumed (stupidly) that my contract had been voided. After passing all the board exams, I accepted a job at a wonderful private practice where I currently work. Today I got a call from the NHSC asking me when I would start working for an NHSC site. I told them that I was under the impression I was no longer affiliated with the NHSC. They told me this was not the case and that I was expected to work at an NHSC site and was still under contract. I told them I would like to get out of the contract, as they had not given me a dime to payback my loans. They said this would be a breach of contract and as such it would cost me $7,500 per month of me not being employed at an NHSC site. Since my commitment was for 36 months, I would literally owe the federal government $270,000! I had never even taken any money from the NHSC! This is like indentured servitude! I have never in my life even heard of such a penalty for a breach in contract. I have hired a contract attorney but was wondering if anyone has heard of a way to safely get out of an NHSC contract? I was absolutely blown away by this. Please let me know if you have any questions and I would appreciate any help immensely. Attached is the contract.

 

[fixemupnp]

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