Rule 195-11-.14 - Contract Default and Penalties(1)Student Default. In the event a scholarship recipient is dismissed from medical school for either academic or disciplinary reasons, or if a recipient voluntary withdraws from medical school prior to completion of the requirements for the M.D. or D.O. degree, or if the recipient is unable to obtain licensure from the Georgia Composite Medical Board due to failure to meet licensure requirements to practice medicine, the scholarship funds received, plus interest at 12 percent per annum from the date of each payment by the Board compounded annually to the date the scholarship is paid in full for each scholarship contract year shall be repaid to the Board, with interest to be calculated as follows. (a) Interest is calculated on an annual basis, with interest compounded onto the outstanding principal owed by the student.(b) Interest compounds onto the principal owed, meaning that interest accrues onto the outstanding principal with each annual calculation.(c) In order to calculate interest for a partial year, the annual interest is calculated fully and divided by 12. That calculation is then multiplied by the number of months from the last interest calculation to the month the funds are paid in full.(d) The number of months to use in this calculation is determined as the number of months that have passed since the Georgia Board of Health Care Workforce submitted payment on behalf of the student and the anticipated month that funds shall be received in full.(e) Interest calculations made for the initial month of receipt of Georgia Board of Health Care Workforce funds and the month in which these funds are repaid in full is calculated for an entire month, regardless of the length of time a recipient actually held debt from the Georgia Board of Health Care Workforce during those two months.(f) In cases involving long-term repayment, a one-time charge of 15% will be added to the total debt owed by the student to account for the costs of servicing this debt repayment.(g) The Board may consent or agree to a lesser measure of damages for compelling reasons as determined by the Board, such as life-threatening illness or loss of ability to be gainfully employed due to illness or accident.(2)Default. A scholarship recipient shall be considered in breach of contract in the following circumstances which lead to the triple damage penalty: (a) Recipient fails to submit the annual report while enrolled in a graduate medical education program.(b) Scholarship recipient fails to begin full-time medical practice in a Board approved practice location within 90 days after completing graduate medical education.(c) Scholarship recipient fails to complete all or a portion of the service obligation of the scholarship contracts, including the requirement for full-time practice and the submission of the required annual report.(d) Scholarship recipient fails to obtain and maintain a Georgia medical license during the service obligation period of the initial scholarship contract and any renewal scholarship contracts.(3)Triple Damages Penalty. In the event of default or breach of contract by the recipient, the recipient shall be immediately liable to the Board for three times (3x) the total amount of funding received from the initial scholarship award and all renewal scholarship awards. The total amount on which the triple damages penalty is calculated shall be reduced by credit for fulfillment of any portion of the service obligation. Example:
Initial Scholarship Award: | $ 20,000 |
Renewal Scholarship Award: | $ 20,000 |
Renewal Scholarship Award: | $ 20,000 |
Renewal Scholarship Award: | $ 20,000 |
Total funding received: | $ 80,000 |
Penalty for default: | $240,000 |
(4) Georgia Board of Health Care Workforce may consent to a lesser measure of damages for compelling reasons as determined by the Board.(5) In the event the scholarship recipient disputes the findings of the Board with regard to breach of contract, the scholarship recipient may elect to file an appeal in accordance with the Board's policy for due process. It is incumbent upon the recipient to provide the Board with the recipient's most current mailing address and telephone number.(6)Board Cancellation of Contract. The Georgia Board of Health Care Workforce may cancel the scholarship of any applicant at any time for any cause deemed sufficient by the Board, provided such authority is not used arbitrarily or unreasonable. In such cases as the Board cancels the contract, the penalty for cancellation is the principal paid to the recipient plus 12% interest per annum from the date of each payment by the Board compounded annually to the date the scholarship is paid in full.Ga. Comp. R. & Regs. R. 195-11-.14
O.C.G.A. §49-10.
Original Rule entitled "Contract Default and Penalties" adopted. F. Nov. 27, 2012; eff. Dec. 17, 2012.Amended: F. Aug. 28, 2013; eff. Sept. 17, 2013.Amended: F. Jul. 29, 2014; eff. Aug. 18, 2014.Repealed: New Rule of the same title adopted. F. Dec. 26, 2019; eff. Jan. 15, 2020.