6-81-708. Loan contracts — Rural Medical Practice Loans — Obligations and conditions.

6-81-708. Loan contracts — Rural Medical Practice Loans — Obligations and conditions. (a) The Arkansas Rural Medical Practice Student Loan and Scholarship Board shall enter into a loan contract with the applicant to whom a rural medical practice loan is made. (b) The contract shall be approved by the Attorney General and shall be signed by the Chair of the Arkansas Rural Medical Practice Student Loan and Scholarship Board, countersigned by the Secretary of the Arkansas Rural Medical Practice Student Loan and Scholarship Board, and signed by the applicant. (c) Each applicant to whom a rural medical practice loan or loans is granted by the Arkansas Rural Medical Practice Student Loan and Scholarship Board shall execute a written loan contract that incorporates the following obligations and conditions: (1)(A) The recipient of a rural medical practice loan or loans shall bindingly contract that he or she shall practice primary care medicine full time in a qualified rural community upon completion of: (i) His or her medical internship of one (1) year undertaken immediately following the earning of the degree of Doctor of Medicine; (ii) Four (4) additional years of medical training beyond the internship if the training has been approved in advance by the Arkansas Rural Medical Practice Student Loan and Scholarship Board and includes practice experience in a rural community; or (iii) At the request of the recipient of a rural medical practice loan, the Arkansas Rural Medical Practice Student Loan and Scholarship Board may approve the recipient's request to practice in more than one (1) qualified rural community to meet his or her obligation to practice full time if the Arkansas Rural Medical Practice Student Loan and Scholarship Board determines, based upon guidelines established by the Arkansas Rural Medical Practice Student Loan and Scholarship Board, that the physician need in the rural communities cannot sustain a full-time medical practice or that other compelling circumstances exist. (B) The recipient of a rural medical practice loan or loans shall bindingly contract that for each year's loan he or she shall practice medicine in accordance with subdivision (c)(1)(A) of this section for a whole year. (C) For each continuous whole year of medical practice, in accordance with subdivision (c)(1)(A) of this section, subject to reasonable leave periods, including without limitation vacation, sick leave, continuing medical education, jury duty, funerals, holidays, or military service, the Arkansas Rural Medical Practice Student Loan and Scholarship Board shall cancel, by converting to a scholarship grant, the full amount of one (1) year's loan plus accrued interest; (2)(A) The recipient of a rural medical practice loan or loans shall bindingly contract that not engaging in the practice of medicine in accordance with the loan contract and with this subchapter may result in suspension of his or her license to practice medicine in this state. (B) For any contract entered into after August 1, 2007, the recipient's medical license may not be suspended unless the recipient's contract contained a specific term that loss of license was a consequence of breach and the recipient signed a written acknowledgment of understanding that the suspension of license was explained to him or her orally as a potential consequence of breach of the contractual provisions. (C) The suspension may be for a period of years equivalent to the number of years that the recipient is obligated to practice medicine in a rural area but has not so practiced and until the loan with interest together with any civil money penalties, as reduced by each full year of medical practice according to the terms of the loan contract, is paid in full; (3) Any communication from the University of Arkansas College of Medicine with any state medical licensing board shall include a notation that the recipient of a rural medical practice loan has a contract with the State of Arkansas to practice medicine in a rural community and that breach of that contract may result in suspension of the recipient's Arkansas medical license; (4)(A) In the event that any rural medical practice loan recipient under this subchapter does not engage in the practice of medicine in accordance with the terms of this section and of his or her loan contract in order to have the loan contract recognized as a scholarship, the recipient shall remain obligated to repay the loan or loans received, together with interest at the maximum rate allowed by Arkansas law or the federal discount rate plus five percent (5%) per annum, whichever is the lesser, the interest to accrue from the date each payment of funds was received by the recipient. (B) Neither interest nor the obligation to repay the principal sums accrued shall accrue during any one (1) period of time that the recipient involuntarily serves on active duty in the United States Armed Forces. (C) Repayment of principal with interest shall be due and payable in full at the earliest to occur of the following events: (i) Failure to remain enrolled in a medically underserved and rural practice curriculum; (ii) Failure to remain in enrollment status continuously to completion of the degree of Doctor of Medicine for any reason other than temporary personal illness; (iii) Failure to complete internship; (iv)(a) Failure to engage in the full-time practice of medicine while residing in a qualified rural community in Arkansas as defined in § 6-81-701. (b) However, the Arkansas Rural Medical Practice Student Loan and Scholarship Board may waive the residency requirement on a case-by-case basis; and (v) Failure to establish a practice as described under subdivision (c)(4)(C)(iv)(a) of this section within six (6) months following either internship or four (4) additional years of medical education that includes practice experience in a rural community. (D) In the event of the death of the recipient, the entire loan amount that has not been converted to a scholarship grant pursuant to the terms of the loan contract shall be due and payable; (5) If an alternate on the waiting list for acceptance to the University of Arkansas College of Medicine enters into a rural medical practice program contract conditioned only upon the applicant's being accepted for admission to the college and otherwise meets the requirements of § 6-81-706 and if the applicant is moved to the top of the waiting list under § 6-81-718, the alternate's contract shall contain an additional term that breach of the contract may result in civil money penalties in the amount of one hundred percent (100%) of the loan amount; and (6) This subsection shall not prohibit the Arkansas Rural Medical Practice Student Loan and Scholarship Board from considering and entering into a negotiated settlement with the rural medical practice loan recipient involving the license suspension, the amount of the civil money penalty, and the terms of repayment of the loan. (d) The Arkansas Rural Medical Practice Student Loan and Scholarship Board may amend agreements entered into with any loan recipient at any time prior to full performance of the recipient's contractual obligations. (e)(1) A rural medical practice loan recipient may apply to the Dean of the College of Medicine of the University of Arkansas for Medical Sciences for a waiver of the contractual provisions set forth in subdivision (c)(2) of this section. (2)(A) If the dean as Chair of the Arkansas Rural Medical Practice Student Loan and Scholarship Board determines that exigent circumstances warrant a waiver, the loan recipient shall be notified in writing. (B) The dean shall immediately notify the Arkansas State Medical Board of such determination.