42 U.S.C. § 297a — Student loan fund

Page 1096 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 296p–1 described in section 296e(i) of this title, the Secretary shall include’’ for ‘‘The Secretary shall submit to the Congress before the end of each fiscal year’’. Pub. L. 116–136, § 3404(a)(6)(D), (E), redesignated sub- sec. (f) as (e) and struck out former subsec. (e). Prior to amendment, text of subsec. (e) read as follows: ‘‘For purposes of any amount of funds appropriated to carry out this section for fiscal year 2003, 2004, or 2005 that is in excess of the amount of funds appropriated to carry out this section for fiscal year 2002, the Secretary shall give preference to awarding grants or entering into contracts under subsections (a)(2) and (c).’’ Subsec. (f). Pub. L. 116–136, § 3404(a)(6)(G), substituted ‘‘an accredited school of nursing, as defined in section 296(2) of this title, a health care facility, including fed- erally qualified health centers or nurse-managed health clinics, or a partnership of such a school and facility’’ for ‘‘a school of nursing, as defined in section 296(2) of this title,,’’. Pub. L. 116–136, § 3404(a)(6)(E), redesignated subsec. (g) as (f). Former subsec. (f) redesignated (e). Subsec. (g). Pub. L. 116–136, § 3404(a)(6)(E), redesig- nated subsec. (g) as (f). Subsec. (h). Pub. L. 116–136, § 3404(a)(6)(D), struck out subsec. (h). Text read as follows: ‘‘There are authorized to be appropriated to carry out this section such sums as may be necessary for each of fiscal years 2010 through 2014.’’ 2010—Pub. L. 111–148, § 5309(a)(1), substituted ‘‘qual- ity’’ for ‘‘retention’’ in section catchline. Subsec. (a). Pub. L. 111–148, § 5309(a)(2), in par. (1), in- serted ‘‘or’’ at end, redesignated par. (3) as (2), and struck out former par. (2) which read as follows: ‘‘devel- oping and implementing internship and residency pro- grams to encourage mentoring and the development of specialties; or’’. Subsec. (b)(3). Pub. L. 111–148, § 5309(a)(3), substituted ‘‘coordinated care’’ for ‘‘managed care, quality im- provement’’. Subsec. (g). Pub. L. 111–148, § 5309(a)(4), inserted ‘‘, as defined in section 296(2) of this title,’’ after ‘‘school of nursing’’. Subsec. (h). Pub. L. 111–148, § 5309(a)(5), substituted ‘‘2010 through 2014’’ for ‘‘2003 through 2007’’. 2002—Pub. L. 107–205 amended section catchline and text generally. Prior to amendment, text read as fol- lows: ‘‘(a) IN GENERAL.—The Secretary may award grants to and enter into contracts with eligible entities for projects to strengthen capacity for basic nurse edu- cation and practice. ‘‘(b) PRIORITY AREAS.—In awarding grants or con- tracts under this section the Secretary shall give pri- ority to entities that will use amounts provided under such a grant or contract to enhance the educational mix and utilization of the basic nursing workforce by strengthening programs that provide basic nurse edu- cation, such as through— ‘‘(1) establishing or expanding nursing practice ar- rangements in noninstitutional settings to dem- onstrate methods to improve access to primary health care in medically underserved communities; ‘‘(2) providing care for underserved populations and other high-risk groups such as the elderly, individ- uals with HIV-AIDS, substance abusers, the home- less, and victims of domestic violence; ‘‘(3) providing managed care, quality improvement, and other skills needed to practice in existing and emerging organized health care systems; ‘‘(4) developing cultural competencies among nurses; ‘‘(5) expanding the enrollment in baccalaureate nursing programs; ‘‘(6) promoting career mobility for nursing per- sonnel in a variety of training settings and cross training or specialty training among diverse popu- lation groups; ‘‘(7) providing education in informatics, including distance learning methodologies; or ‘‘(8) other priority areas as determined by the Sec- retary.’’ § 296p–1. Repealed. Pub. L. 116–136, div. A, title III, § 3404(a)(7), Mar. 27, 2020, 134 Stat. 394 Section, act July 1, 1944, ch. 373, title VIII, § 831A, as added Pub. L. 111–148, title V, § 5309(b), Mar. 23, 2010, 124 Stat. 630, authorized the Secretary to award nurse re- tention grants to eligible entities. Prior sections 296r, 297, and 297–1 were repealed by Pub. L. 105–392, title I, § 123(1), Nov. 13, 1998, 112 Stat. 3562. Section 296r, act July 1, 1944, ch. 373, title VIII, § 827, as added Pub. L. 100–607, title VII, § 701(a)(3), Nov. 4, 1988, 102 Stat. 3153; amended Pub. L. 102–408, title II, § 205, Oct. 13, 1992, 106 Stat. 2073, authorized grants and contracts for special projects to increase nursing edu- cation opportunities for individuals from disadvan- taged backgrounds. Section 297, act July 1, 1944, ch. 373, title VIII, § 830, formerly § 821, as added Pub. L. 88–581, § 2, Sept. 4, 1964, 78 Stat. 913; amended Pub. L. 90–490, title II, § 221, Aug. 16, 1968, 82 Stat. 783; Pub. L. 92–52, § 5, July 9, 1971, 85 Stat. 145; Pub. L. 92–158, §§ 5, 13, Nov. 18, 1971, 85 Stat. 475, 480; renumbered § 830 and amended Pub. L. 94–63, title IX, §§ 935, 941(g)(2), July 29, 1975, 89 Stat. 362, 365; Pub. L. 94–484, title IX, § 901, Oct. 12, 1976, 90 Stat. 2323; Pub. L. 95–83, title III, § 307(o)(5)(B), Aug. 1, 1977, 91 Stat. 394; Pub. L. 96–76, title I, § 108, Sept. 29, 1979, 93 Stat. 579; Pub. L. 97–35, title XXVII, § 2756, Aug. 13, 1981, 95 Stat. 931; Pub. L. 99–92, § 6, Aug. 16, 1985, 99 Stat. 395; Pub. L. 100–607, title VII, § 711, Nov. 4, 1988, 102 Stat. 3159; Pub. L. 102–408, title II, § 206, Oct. 13, 1992, 106 Stat. 2073; Pub. L. 103–43, title XX, § 2014(f), June 10, 1993, 107 Stat. 217, authorized grants for traineeships for ad- vanced education of professional nurses. Section 297–1, act July 1, 1944, ch. 373, title VIII, § 831, as added Pub. L. 96–76, title I, § 111, Sept. 29, 1979, 93 Stat. 580; amended Pub. L. 97–414, § 8(l), Jan. 4, 1983, 96 Stat. 2061; Pub. L. 99–92, § 7, Aug. 16, 1985, 99 Stat. 396; Pub. L. 100–607, title VII, § 712, Nov. 4, 1988, 102 Stat. 3160; Pub. L. 102–408, title II, § 207, Oct. 13, 1992, 106 Stat. 2074, authorized grants for training of nurse anes- thetists. PART E—STUDENT LOANS Editorial Notes CODIFICATION Pub. L. 105–392, title I, § 123(2), Nov. 13, 1998, 112 Stat. 3562, redesignated subpart II of part B as part E. Pub. L. 94–63, title IX, § 941(g)(3), July 29, 1975, 89 Stat. 365, inserted subpart II heading. § 297a. Student loan fund (a) Agreements to establish and operate fund au- thorized The Secretary is authorized to enter into an agreement for the establishment and operation of a student loan fund in accordance with this part with any public or nonprofit private school of nursing which is located in a State. (b) Provisions of agreements Each agreement entered into under this sec- tion shall— (1) provide for establishment of a student loan fund by the school; (2) provide for deposit in the fund, except as provided in section 298d of this title, of (A) the Federal capital contributions paid from allot- ments under section 297d of this title to the school by the Secretary, (B) an additional amount from other sources equal to not less than one-ninth of such Federal capital con- tributions, (C) collections of principal and in- terest on loans made from the fund, (D) collec- Page 1097 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 297a tions pursuant to section 297b(f) of this title, and (E) any other earnings of the fund; (3) provide that the fund, except as provided in section 298d of this title, shall be used only for loans to students of the school in accord- ance with the agreement and for costs of col- lection of such loans and interest thereon; (4) provide that loans may be made from such fund only to students pursuing a full- time or half-time course of study at the school leading to a baccalaureate or associate degree in nursing or an equivalent degree or a di- ploma in nursing, or to a graduate degree in nursing; and (5) contain such other provisions as are nec- essary to protect the financial interests of the United States. (c) Regulatory standards applicable to collection of loans (1) Any standard established by the Secretary by regulation for the collection by schools of nursing of loans made pursuant to loan agree- ments under this part shall provide that the failure of any such school to collect such loans shall be measured in accordance with this sub- section. With respect to the student loan fund established pursuant to such agreements, this subsection may not be construed to require such schools to reimburse such loan fund for loans that became uncollectable prior to 1983. (2) The measurement of a school’s failure to collect loans made under this part shall be the ratio (stated as a percentage) that the defaulted principal amount outstanding of such school bears to the matured loans of such school. (3) For purposes of this subsection— (A) the term ‘‘default’’ means the failure of a borrower of a loan made under this part to— (i) make an installment payment when due; or (ii) comply with any other term of the promissory note for such loan, except that a loan made under this part shall not be considered to be in default if the loan is discharged in bankruptcy or if the school reasonably concludes from written contacts with the borrower that the borrower intends to repay the loan; (B) the term ‘‘defaulted principal amount outstanding’’ means the total amount bor- rowed from the loan fund of a school that has reached the repayment stage (minus any prin- cipal amount repaid or cancelled) on loans— (i) repayable monthly and in default for at least 120 days; and (ii) repayable less frequently than monthly and in default for at least 180 days; (C) the term ‘‘grace period’’ means the pe- riod of nine months beginning on the date on which the borrower ceases to pursue a full- time or half-time course of study at a school of nursing; and (D) the term ‘‘matured loans’’ means the total principal amount of all loans made by a school of nursing under this part minus the total principal amount of loans made by such school to students who are— (i) enrolled in a full-time or half-time course of study at such school; or (ii) in their grace period. (July 1, 1944, ch. 373, title VIII, § 835, formerly § 822, as added Pub. L. 88–581, § 2, Sept. 4, 1964, 78 Stat. 913; amended Pub. L. 90–490, title II, § 222(a), (c)(2), Aug. 16, 1968, 82 Stat. 783, 784; Pub. L. 92–158, § 6(d)(3), (e), Nov. 18, 1971, 85 Stat. 478; Pub. L. 93–385, § 3(b), Aug. 23, 1974, 88 Stat. 741; renumbered § 835 and amended Pub. L. 94–63, title IX, §§ 936(a), 941(h)(1)–(3), (i)(1), (2), July 29, 1975, 89 Stat. 362, 365, 366; Pub. L. 96–76, title I, § 109(a), Sept. 29, 1979, 93 Stat. 579; Pub. L. 97–35, title XXVII, § 2757(a), Aug. 13, 1981, 95 Stat. 931; Pub. L. 99–92, § 8(a), Aug. 16, 1985, 99 Stat. 397; Pub. L. 99–129, title II, § 209(j)(2), Oct. 22, 1985, 99 Stat. 536; Pub. L. 100–607, title VII, § 713(a), Nov. 4, 1988, 102 Stat. 3160; Pub. L. 111–148, title V, § 5310(b)(2), (6), Mar. 23, 2010, 124 Stat. 631.) Editorial Notes AMENDMENTS 2010—Subsec. (a). Pub. L. 111–148, § 5310(b)(2), sub- stituted ‘‘this part’’ for ‘‘this subpart’’. Subsec. (b). Pub. L. 111–148, § 5310(b)(6), substituted ‘‘298d’’ for ‘‘297h’’ in pars. (2) and (3). Subsec. (c). Pub. L. 111–148, § 5310(b)(2), substituted ‘‘this part’’ for ‘‘this subpart’’ wherever appearing. 1988—Subsec. (c)(1). Pub. L. 100–607 inserted provi- sions relating to reimbursement of student loan fund for certain uncollectable loans. 1985—Subsec. (c). Pub. L. 99–92 added subsec. (c). Subsec. (c)(3)(C). Pub. L. 99–129, § 209(j)(2)(A), sub- stituted provisions defining ‘‘grace period’’ as the pe- riod of nine months beginning on the date on which the borrower ceases to pursue a full-time or half-time course of study at a school of nursing for former provi- sions defining ‘‘grace period’’ as the period of one year beginning on (i) the date on which the borrower ceased to pursue a full-time or half-time course of study at a school of nursing; or (ii) the date on which ended any period described in clause (A) or (B) of section 297b(b)(2) of this title which was applicable to such borrower, whichever was later. Subsec. (c)(3)(D)(ii). Pub. L. 99–129, § 209(j)(2)(B), struck out ‘‘first’’ before ‘‘grace period.’’ 1981—Subsec. (b)(4). Pub. L. 97–35 struck out provi- sions respecting prohibition on loans to students at- tending school before Oct. 1, 1980. 1979—Subsec. (b)(4). Pub. L. 96–76 substituted ‘‘1980’’ for ‘‘1978’’. 1975—Subsec. (a). Pub. L. 94–63, § 941(h)(1), (2), sub- stituted ‘‘subpart’’ for ‘‘part’’ and struck out ‘‘of Health, Education, and Welfare’’ after ‘‘Secretary’’. Subsec. (b). Pub. L. 94–63, §§ 936(a), 941(h)(3), (i)(2), in cl. (2) substituted ‘‘from allotments under section 297d of this title’’ for ‘‘under this part’’, in cl. (4) substituted ‘‘October 1, 1978’’ for ‘‘July 1, 1975’’, and in cls. (2) and (3) substituted references to sections 836 and 841 of the Act for references to sections 823 and 829, which had previously been translated as sections 297b and 297h of this title, respectively, requiring no further trans- lations in the text as a result of the renumbering of the Public Health Service Act. 1974—Subsec. (b)(4). Pub. L. 93–385 substituted ‘‘1975’’ for ‘‘1974’’. 1971—Subsec. (b)(4). Pub. L. 92–158 substituted ‘‘full- time or half-time course of study’’ for ‘‘full-time course of study’’ and ‘‘1974’’ for ‘‘1971’’. 1968—Subsec. (b)(2). Pub. L. 90–490, § 222(a)(1), (c)(2), inserted ‘‘, except as provided in section 297h of this title,’’ after ‘‘fund’’ where first appearing and added cl. (D) and redesignated former cl. (D) as (E), respectively. Subsec. (b)(3). Pub. L. 90–490, § 222(a)(1), inserted ‘‘, except as provided in section 297h of this title’’ after ‘‘fund’’ where first appearing and authorized the can- cellation of an additional 50 per centum of a nursery student loan. Page 1098 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 297b 1 So in original. Subsec. (b)(4). Pub. L. 90–490, § 222(a)(2), substituted ‘‘1971’’ for ‘‘1969’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1985 AMENDMENTS Amendment by Pub. L. 99–129 effective June 30, 1984, see section 228(b)(5) of Pub. L. 99–129, set out as a note under section 254l of this title. Pub. L. 99–92, § 10, Aug. 16, 1985, 99 Stat. 402, provided that: ‘‘(a) Except as provided in subsection (b), this Act [enacting section 297i of this title, transferring section 296c to section 298b–5 of this title, amending this sec- tion, sections 296k, 296l, 296m, 297, 297–1, 297b, 297d, 297e, 298, 298b, and 298b–5 of this title, sections 1332, 1333, 1336, and 1341 of Title 15, Commerce and Trade, and sec- tion 6103 of Title 26, Internal Revenue Code, repealing sections 296 to 296b, 296d to 296f, 296j, 297h, and 297j of this title, and enacting provisions set out as notes under sections 201 and 298b–5 of this title and section 1333 of Title 15] and the amendments and repeals made by this Act shall take effect on October 1, 1985. ‘‘(b)(1) The provisions of section 9(c) of this Act [transferring section 296c of this title to section 298b–5 of this title, amending section 298b–5 of this title, and enacting provisions set out as notes under section 298b–5 of this title] and the amendment made by para- graph (1) of such section shall take effect on the date of enactment of this Act [Aug. 16, 1985]. ‘‘(2) The amendment made by section 8(a) of this Act [amending section 297a of this title] shall take effect June 30, 1984.’’ EFFECTIVE DATE OF 1975 AMENDMENT Pub. L. 94–63, title IX, § 905, July 29, 1975, 89 Stat. 355, provided that: ‘‘Except as may otherwise be specifically provided, the amendments made by this part [part B (§§ 905–937) of title IX of Pub. L. 94–63, enacting sections 296j to 296m of this title, amending sections 296, 296a, 296d, 296e, 297 to 297c, 297e, and 297j of this title, repeal- ing sections 296d, 296g, 296i, 297f, and 298c–7 of this title, and enacting provisions set out as notes under sections 296, 296a, 296d, 296e, 296m, 297, 297b, and 297f of this title] shall take effect July 1, 1975. The amendments made by this part to provisions of title VIII of the Public Health Service Act [42 U.S.C. 296 et seq.] (hereinafter in this part referred to as the ‘Act’) are made to such provi- sions as amended by part A of this title [amending sec- tions 296, 296d, 296e, 296g, 296i, 297j, and 298c–7 of this title].’’ Pub. L. 94–63, title IX, § 942, July 29, 1975, 89 Stat. 367, provided that: ‘‘The amendments made by section 941 [enacting section 298b–3 of this title, amending sections 296a to 296d, 296f, 297a to 297e, 297g to 297k, 298, and 298b of this title, and repealing section 298c–8 of this title] shall take effect July 1, 1975. Except as otherwise spe- cifically provided, the amendments made by section 941 to provisions of title VIII of the Act [42 U.S.C. 296 et seq.] are made to such provisions as in effect July 1, 1975, and as amended by part B of this title [see note set out above].’’ EFFECTIVE DATE OF 1968 AMENDMENT Amendment by section 222(c)(2) of Pub. L. 90–490 ap- plicable with respect to loans made after June 30, 1969, see section 222(i) of Pub. L. 90–490, set out as a note under section 297b of this title. § 297b. Loan provisions (a) Maximum amount per individual per year; preference to first year students The total of the loans for any academic year (or its equivalent, as determined under regula- tions of the Secretary) made by schools of nurs- ing from loan funds established pursuant to agreements under this part may not exceed $3,300 in the case of any student, except that for the final two academic years of the program in- volved, such total may not exceed $5,200. The ag- gregate of the loans for all years from such funds may not exceed $17,000 in the case of any student during fiscal years 2010 and 2011. After fiscal year 2011, such amounts shall be adjusted to provide for a cost-of-attendance increase for the yearly loan rate and the aggregate of the loans. In the granting of such loans, a school shall give preference to licensed practical nurses, to persons with exceptional financial need, and to persons who enter as first-year stu- dents after enactment of this subchapter. (b) Terms and conditions Loans from any such student loan fund by any school shall be made on such terms and condi- tions as the school may determine; subject, how- ever, to such conditions, limitations, and re- quirements as the Secretary may prescribe (by regulation or in the agreement with the school) with a view to preventing impairment of the capital of such fund to the maximum extent practicable in the light of the objective of ena- bling the student to complete his course of study; and except that— (1) such a loan may be made only to a stu- dent who (A) is in need of the amount of the loan to pursue a full-time or half-time course of study at the school leading to a bacca- laureate or associate degree in nursing or an equivalent degree, or a diploma in nursing, or a graduate degree in nursing, (B) is capable, in the opinion of the school, of maintaining good standing in such course of study, and (C) with respect to any student enrolling in the school after June 30, 2000, is of financial need (as de- fined in regulations issued by the Secretary);; 1 (2) such a loan shall be repayable in equal or graduated periodic installments (with the right of the borrower to accelerate repayment) over the ten-year period which begins nine months after the student ceases to pursue a full-time or half-time course of study at a school of nursing, excluding from such 10-year period all (A) periods (up to three years) of (i) active duty performed by the borrower as a member of a uniformed service, or (ii) service as a volunteer under the Peace Corps Act [22 U.S.C. 2501 et seq.], (B) periods (up to ten years) during which the borrower is pursuing a full-time or half-time course of study at a col- legiate school of nursing leading to bacca- laureate degree in nursing or an equivalent de- gree, or to graduate degree in nursing, or is otherwise pursuing advanced professional training in nursing (or training to be a nurse anesthetist), and (C) such additional periods under the terms of paragraph (8) of this sub- section; (3) in the case of a student who received such a loan before September 29, 1995, an amount up to 85 per centum of any such loan made before such date (plus interest thereon) shall be can- celed for full-time employment as a profes- sional nurse (including teaching in any of the fields of nurse training and service as an ad- ministrator, supervisor, or consultant in any