Section 20-25-6 - Repayment of the loan(a) Each loan shall be evidenced by an executed promissory note which shall set forth the terms and conditions of the loan. Repayment of principal and interest shall commence after the grace period. Repayment of principal and interest shall be made in equal quarterly or monthly installments within a seven-year period as determined by the university. A payment plan of not less than $120 a quarter or $40 a month shall be required on all loans.(b) Interest rate. The rate of interest payable on the loan shall be five per cent simple interest.(c) Interest rate penalty. If a borrower fails to submit, by the date the university establishes, documentation required by the university to verify that the borrower is teaching in the Hawaii public school system for a minimum of seven consecutive years from the original date of employment with the department of education, excluding temporary leaves of absence, then the borrower shall pay the remaining balance of the loan at the rate of ten per cent simple interest.(d) Prior to the borrower's graduation or termination from the teacher education program, the borrower shall be responsible for reporting any change in name, address, telephone number, or social security number to the financial aid office. After the graduation or termination from the teacher education program, the borrower shall be responsible for reporting any change in name, address, phone number, or social security number to the university office which handles the loan collection.(e) Exit interview. Immediately prior to the borrower's graduation or termination from the teacher education program, the borrower shall be responsible for completing an exit interview with the university. The purpose of the exit interview is to schedule repayments and explain the borrower's rights and responsibilities under the loan. If the borrower fails to complete an exit interview, the university shall provide the borrower with the exit interview information either online or by mail.(f) Collection fees. The university may charge late fees which do not exceed twenty per cent of the installment payment due and all other reasonable fees for the collection of the loan. Any payment received shall be applied in the following order: (3) Accrued interest; and(g) Acceleration of loan. The university may demand the immediate repayment of the entire loan, including any accrued interest, late fees, and collection fees, if the borrower fails to make a scheduled repayment or fails to submit the annual certification form on time.(h) Annual certification. The borrower shall submit, by the date the university establishes, documentation required by the university to demonstrate that the borrower meets the conditions for the loan waiver or repayment at the five per cent interest rate. The borrower shall submit the required certification for a minimum of seven consecutive years from the borrower's original date of employment with the department of education, excluding temporary leaves of absence. (1) Loan waiver. (A) Waiver qualifications. The borrower shall:(i) Be employed in a Hawaii public school as a full-time elementary or secondary school teacher for a complete academic year or its equivalent; and(ii) Be employed in a hard-to-fill position as determined by the superintendent of education, including special education, regular education shortage categories, or Title 1 schools;(B) Waiver rate. For the first five years of qualifying teaching service, the annual waiver rate shall be ten per cent of the original principal amount plus the interest which accrued on the unpaid balance. For the sixth and seventh years of qualifying service, the waiver rate shall be twenty-five per cent of the original principal amount plus the interest which accrued on the unpaid balance; and(C) Waiver of defaulted loans. A borrower whose defaulted loan has been accelerated may qualify for a loan waiver for teaching service performed before the date of acceleration. A borrower shall not qualify for a loan waiver for services performed on or after the date of acceleration.(2) Repayment at five per cent interest rate. To qualify, the borrower shall teach in a Hawaii public school as a full-time elementary or secondary school teacher for a complete academic year or its equivalent in a position that has not been designated as hard-to-fill by the superintendent of education. (i) Cancellation of loan upon death or permanent disability of a borrower. If the borrower becomes permanently and totally disabled after receiving the loan, the unpaid balance of the loan shall be canceled upon receipt of a written request for cancellation and any documentation required by the university to demonstrate that the borrower meets the conditions for cancellation. If the borrower dies, the unpaid balance shall be canceled on the basis of a death certificate or other official proof of death. [Eff. OCT 12 2002] (Auth: HRS § 304-20.6)[Am and Comp 9/8/2017] (Auth: HRS § 304A-701) (Imp: HRS § 304A-701)