42 U.S.C. § 292q — Agreements for operation of school loan

Page 1003 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 292q tution, an eligible lender, or a holder, as the case may be. (D) For purposes of subparagraph (A), a loan is made with respect to an eligible entity if— (i) in the case of an eligible institution, the loan was made to students of the institu- tion; (ii) in the case of an eligible lender, the loan was made by the lender; and (iii) in the case of a holder, the loan was purchased by the holder. (6) The term ‘‘Secretary’’ means the Sec- retary of Education. (July 1, 1944, ch. 373, title VII, § 719, as added Pub. L. 102–408, title I, § 102, Oct. 13, 1992, 106 Stat. 2009; amended Pub. L. 105–392, title I, § 141(c)(2), Nov. 13, 1998, 112 Stat. 3579; Pub. L. 113–76, div. H, title V, § 525(e), Jan. 17, 2014, 128 Stat. 413.) Editorial Notes AMENDMENTS 2014—Par. (6). Pub. L. 113–76 added par. (6). 1998—Par. (1). Pub. L. 105–392 substituted ‘‘or behav- ioral and mental health practice, including clinical psychology’’ for ‘‘or clinical psychology’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2014 AMENDMENT Pub. L. 113–76, div. H, title V, § 525(e), Jan. 17, 2014, 128 Stat. 413, provided in part that the amendment made by section 525(e) is effective as of the date on which the transfer of the HEAL program under subsec. (a) of sec- tion 525 of Pub. L. 113–76, set out as a note under sec- tion 292 of this title, takes effect [no later than the end of the first fiscal quarter that begins after Jan. 17, 2014]. § 292p. Authorization of appropriations (a) In general For fiscal year 1993 and subsequent fiscal years, there are authorized to be appropriated such sums as may be necessary for the adequacy of the student loan insurance account under this subpart and for the purpose of administering this subpart. (b) Availability of sums Sums appropriated under subsection (a) shall remain available until expended. (July 1, 1944, ch. 373, title VII, § 720, as added Pub. L. 102–408, title I, § 102, Oct. 13, 1992, 106 Stat. 2011.) Editorial Notes PRIOR PROVISIONS A prior section 720 of act July 1, 1944, was classified to section 293 of this title prior to the general revision of this subchapter by Pub. L. 102–408. SUBPART II—FEDERALLY-SUPPORTED STUDENT LOAN FUNDS § 292q. Agreements for operation of school loan funds (a) Fund agreements The Secretary is authorized to enter into an agreement for the establishment and operation of a student loan fund in accordance with this subpart with any public or other nonprofit school of medicine, osteopathic medicine, den- tistry, pharmacy, podiatric medicine, optom- etry, or veterinary medicine. (b) Requirements 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 of— (A) the Federal capital contributions to the fund; (B) an amount equal to not less than one- ninth of such Federal capital contributions, contributed by such institution; (C) collections of principal and interest on loans made from the fund; (D) collections pursuant to section 292r(j) of this title; and (E) any other earnings of the fund; (3) provide that the fund 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 funds only to students pursuing a full- time course of study at the school leading to a degree of doctor of medicine, doctor of den- tistry or an equivalent degree, doctor of oste- opathy, bachelor of science in pharmacy or an equivalent degree, doctor of pharmacy or an equivalent degree, doctor of podiatric medi- cine or an equivalent degree, doctor of optom- etry or an equivalent degree, or doctor of vet- erinary medicine or an equivalent degree; (5) provide that the school shall advise, in writing, each applicant for a loan from the student loan fund of the provisions of section 292r of this title under which outstanding loans from the student loan fund may be paid (in whole or in part) by the Secretary; and (6) contain such other provisions as are nec- essary to protect the financial interests of the United States. (c) Failure of school to collect loans (1) In general Any standard established by the Secretary by regulation for the collection by schools of medicine, osteopathic medicine, dentistry, pharmacy, podiatric medicine, optometry, or veterinary medicine of loans made pursuant to loan agreements under this subpart shall pro- vide that the failure of any such school to col- lect such loans shall be measured in accord- ance with this subsection. This subsection may not be construed to require such schools to reimburse the student loan fund under this subpart for loans that became uncollectible prior to August 1985 or to penalize such schools with respect to such loans. (2) Extent of failure The measurement of a school’s failure to collect loans made under this subpart shall be the ratio (stated as a percentage) that the de- faulted principal amount outstanding of such school bears to the matured loans of such school. Page 1004 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 292r (3) Definitions For purposes of this subsection: (A) The term ‘‘default’’ means the failure of a borrower of a loan made under this sub- 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 subpart shall not be considered to be in default if the loan is discharged in bankruptcy or if the school reasonably concludes from written contracts with the borrower that the bor- rower 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 principal amount repaid or canceled) 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 one year beginning on the date on which the borrower ceases to pursue a full- time course of study at a school of medicine, osteopathic medicine, dentistry, pharmacy, podiatric medicine, optometry, or veterinary medicine; and (D) The term ‘‘matured loans’’ means the total principal amount of all loans made by a school under this subpart minus the total principal amount of loans made by such school to students who are— (i) enrolled in a full-time course of study at such school; or (ii) in their grace period. (July 1, 1944, ch. 373, title VII, § 721, as added Pub. L. 102–408, title I, § 102, Oct. 13, 1992, 106 Stat. 2011.) Editorial Notes PRIOR PROVISIONS A prior section 721 of act July 1, 1944, was classified to section 293a of this title prior to the general revision of this subchapter by Pub. L. 102–408. § 292r. Loan provisions (a) Amount of loan (1) In general Loans from a student loan fund (established under an agreement with a school under sec- tion 292q of this title) may not, subject to paragraph (2), exceed for any student for a school year (or its equivalent) the cost of at- tendance (including tuition, other reasonable educational expenses, and reasonable living costs) for that year at the educational institu- tion attended by the student (as determined by such educational institution). (2) Third and fourth years of medical school For purposes of paragraph (1), the amount of the loan may, in the case of the third or fourth year of a student at a school of medicine or os- teopathic medicine, be increased to the extent necessary to pay the balances of loans that, from sources other than the student loan fund under section 292q of this title, were made to the individual for attendance at the school. The authority to make such an increase is subject to the school and the student agreeing that such amount (as increased) will be ex- pended to pay such balances. (b) Terms and conditions Subject to section 292s of this title, any such loans shall be made on such terms and condi- tions as the school may determine, but may be made only to a student who is in need of the amount thereof to pursue a full-time course of study at the school leading to a degree of doctor of medicine, doctor of dentistry or an equivalent degree, doctor of osteopathy, bachelor of science in pharmacy or an equivalent degree, doctor of pharmacy or an equivalent degree, doctor of podiatric medicine or an equivalent degree, doc- tor of optometry or an equivalent degree, or doctor of veterinary medicine or an equivalent degree. (c) Repayment; exclusions from repayment pe- riod Such loans shall be repayable in equal or grad- uated periodic installments (with the right of the borrower to accelerate repayment) over the period of not less than 10 years nor more than 25 years, at the discretion of the institution, which begins one year after the student ceases to pur- sue a full-time course of study at a school of medicine, osteopathic medicine, dentistry, phar- macy, podiatry, optometry, or veterinary medi- cine, excluding from such period— (1) all periods— (A) not in excess of three years of active duty performed by the borrower as a member of a uniformed service; (B) not in excess of three years during which the borrower serves as a volunteer under the Peace Corps Act [22 U.S.C. 2501 et seq.]; (C) during which the borrower participates in advanced professional training, including internships and residencies; and (D) during which the borrower is pursuing a full-time course of study at such a school; and (2) a period— (A) not in excess of two years during which a borrower who is a full-time student in such a school leaves the school, with the intent to return to such school as a full-time student, in order to engage in a full-time educational activity which is directly related to the health profession for which the borrower is preparing, as determined by the Secretary; or (B) not in excess of two years during which a borrower who is a graduate of such a school is a participant in a fellowship train- ing program or a full-time educational activ- ity which— (i) is directly related to the health pro- fession for which such borrower prepared at such school, as determined by the Sec- retary; and