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Arizona Loan Repayment Program

Contract Default – Avoiding Default

The loan repayment recipient must notify ADHS within ten (10) business days of his/her failure to complete the full term of service at the approved service site per Arizona Administrative Code (A.A.C.) R9-15-215.

Based on the provider's notification, the ADHS program manager will recommend one of two options:

Transfer Recommendation

With any transfer, ADHS will recommend that the provider requests for a contract suspension to allow time for the provider to resolve any issues identified or to transfer to another eligible site without going into a default status and for ADHS to process the transfer request. Once a contract suspension is requested and granted by ADHS, the contract will then be suspended effective the date of the request or the provider’s end date with the service site for the length of time requested AND the contract will be extended to account for the period of suspension. Prior to or during the suspension period, program staff will assist the provider by providing resources that can facilitate transfer to a new eligible site. It is the responsibility of the provider to find and match with an eligible site during or by the end of the suspension period. Once the provider finds a new eligible site to transfer to, he/she must contact ADHS. ADHS will then require submission of necessary documents to verify that the new site meets program requirements. Once verified, the loan repayment contract will then be amended to reflect the new service site. The provider can resume service at the new site once a fully executed contract amendment has been established.

The existing procedure for quarterly loan repayments will remain in force.

Default Determination

The provider will enter into default with the ALRP contract in the following conditions:

  • A provider who failed to find an eligible service site upon the expiration date of the contract suspension period. The initial suspension period allowed is 6 months to a maximum allowable suspension of one year.
  • A provider who terminates employment at the approved service site and makes an independent decision not to complete service under the terms of the loan repayment contract.

A provider who breached his/her loan repayment contract will be officially notified of his/her default status and will be bound to the contract’s Special Terms and Conditions for Default.