Secretary GARDNER. I think your point is well taken. We are short everywhere, we have very, very pressing demands on us. I would simply make the point that with our scarce resources and with the need to allocate those scarce resources we must not only have then in mind the very important tasks of helping sick people in rural areas but we have to try to construct the kind of world in which our youngsters don't have to go to war every generation.

One of the main purposes of the international health act was to initiate the process of international collaboration in an area in which we could work peaceably with people, or mutually understood and agreed upon objectives, in the hope that this kind of peaceful activity could knit together a world that is now torn with war. That too is important.

Mr. YOUNGER. Well, as Shakespeare said that is a "consummation devoutly to be wished," but our experience with foreign aid does not bear out much hope for progress in that field. My 5 minutes are up, Mr. Chairman.

Mr. FRIEDEL (presiding). We are going to adhere to the 5-minute rule.

Mr. Dingell.

Mr. DINGELL. Thank you, Mr. Chairman. Mr. Secretary, I note in your statement that this language appears on page 10:

It is certainly necessary to see whether total loan forgiveness can be accelerated. Rates specified in this bill will provide the necessary attraction but as you well know there are other factors involved which apparently outweigh purely financial

concerns.

Now in the past, Mr. Secretary, this committee has supported partial forgiveness of loans, as you well know. I think the committee might well consider supporting the total forgiveness of the type you have indicated here if it were pretty clear that the committee could expect that it would work.

Your statement here indicates a rather clear reservation as to whether or not this loan forgiveness will in fact work or not;

What I am saying, Mr. Secretary, is that you appear to have hedged your bet on this point. What I am asking is, How on the basis of the reservations that you indicate can you expect the committee to support total forgiveness as embodied in H.R. 13196.

Secretary GARDNER. I would simply say that we tried to state what we regarded are the facts as honestly as we could. I would not say that we doubt that it will work. I think we were trying to state as clearly as possible that it is a partial solution and in a situation of this sort it is a very difficult situation, partial solutions are well worth turning to.

Mr. DINGELL. Do you have any statistical evidence or basis of experience that you can communicate to the committee at this time that would indicate that this will help meet the shortage of the particular kind of people referred to, the shortage of medical personnel, the type referred to in the act?

Dr. LEE. We have some evidence from certain programs that have been going on in States and we can certainly get that information and make it available to the committee. We do not have it immediately available.

62-707-66-3

(The information requested follows:)

STATE SCHOLARSHIP-LOAN PROGRAMS FOR MEDICAL STUDENTS, AS AN INCENTIVE FOR PRACTICE IN RURAL OR OTHER SHORTAGE AREAS

Some States for a number of years have supported programs for loans to medical students, repayable wholly or in part by practice in areas of physician shortage. The loan programs vary in their provisions, but a common pattern is to require 1 year of service in a rural or other shortage area in exchange for every year of loan aid.

Although there is little published information on the effectiveness of such programs in recruiting needed personnel, available data suggest that their success is mixed. Some loan recipients perform their obligated service as intended; others choose to repay the loans in cash. Of those who do perform obligated service, by no means all remain to make a career in the area.

For example, of 222 students receiving Virginia rural physician scholarships between 1942 and 1964, and entering practice during that time (i.e., no longer performing military service or completing internships), 94 or about two-fifths have repaid all or part of their indebtedness through practice in an approved location. A slightly higher proportion have repaid their loans in cash and the remaining cases are pending. A recent followup survey of University of Virginia and Medical College of Virginia graduates who aid obligated service showed that somewhat over half were still engaged in general practice in the same area.

Experience in other States has tended to be similar, with some variation in the proportion of graduates meeting service requirements. Among the deterrents to rural practice are reported to be the desire to enter specialty practice, professional isolation in small towns, lack of nearby hospital and laboratory facilities, heavy workload of rural general practitioner, and preference for city living. The following reports give some idea of experience to date:

ALABAMA-MEDICAL SCHOLARSHIPS PROGRAM

(Information from Ira L. Myers, M.D., Secretary, Alabama Board of Medical Examiners, February 1966)

In the years 1953-59, 46 scholarships were awarded. Seventeen of this number, or about 40 percent, have repaid their loan in money rather than service. Several are delaying their repayment pending military service or special training obligations.

The experience since 1960 is incomplete since these obligations have not yet become due.

There has been considerable disappointment with the program as a device for inducing physicians to work in sparsely populated areas. In May 1965, the program was amended to provide for relatively shorter service requirements for persons practicing in communities of less than 5,000 population, among other changes.

ARKANSAS-MEDICAL STUDENT LOANS

(Office of Education Survey of State Scholarship and Loan Programs, 1960–62)

Of 27 medical students awarded loans in the 5-year period 1953-58, 2 had already repaid their loans in cash and 3 had had loan payments canceled by medical practice in rural communities (as of 1960).

FLORIDA-MEDICAL SCHOLARSHIPS PROGRAM

("A Brief Summary of Florida's Medical Scholarship Program, Nov. 18, 1965." Obtained from Dr. Robert V. Schultz, Training Coordinator, Florida State Board of Health)

Since 1955, 123 scholarships have been granted to medical students, including 6 to osteopathic students. Of these students, 87 have graduated; and the status of the graduates is as follows:

Twelve have engaged in practice in areas of need, as designated by the State board of health, repaying all or part of their indebtedness in this way. Eight are serving internships.

Twelve are pursuing residency training (one in violation of scholarship contract).

Fifteen are in military service.

Thirty-eight have repaid in cash, are in the process of repaying, or are subject to collection proceedings.

Two are pending.

GEORGIA-MEDICAL STUDENT LOANS

(Office of Education Survey of State Scholarship and Loan Programs, 1960–62)

During the 9-year period 1953-62, 343 medical students received loans. By July 1, 1962, 13 physicians had completely repaid loans totaling $36,500 through service in the smaller Georgia communities, 23 were serving 1-year residencies, 13 were in the Armed Forces, and remainder were still in medical school, serving internships, or fulfilling their obligations through service or monetary repayment. Letter from L. R. Siebert, secretary of State Medical Education Board of Georgia, June 24, 1960:

"At the present time there are approximately 30 doctors who are repaying their scholarships by practicing in rural areas. There will be approximately 15 additional doctors to begin practice on July 1, 1960 * * *.

"We feel that the program. *** is a very effective means to provide the State with much needed physicians ***"

KENTUCKY-RURAL MEDICAL SCHOLARSHIPS

(OE Survey of State Scholarships and Loan Programs, 1959-62)

As yet experience with the loan cancellation option of the program has been so limited that it is not yet possible to tell what effect it will have on supplying physicians to the counties most in need of medical service.

Letter from J. P. Sanford, secretary, Rural Kentucky Medical Scholarship Fund, June 21, 1960:

"Medical students receiving loans since the inception of the program total 197. Of this number, 115 have completed medical school. Of the 56 practicing in rural areas, 27 have fulfilled their moral obligation to the fund and 29 are now in process.'

MISSISSIPPI'S MEDICAL-STUDENT LOANS

(D. S. Pankratz and Julis C. Davis. "A Review of Mississippi's Medical Education Program." Journal of Medical Education, April 1960.)

Of a total of 609 participants in the program, 511 had graduated and their status was as follows:

Total___.

Completed obligated service..

Still performing obligated service.

Practiced 2 or more years and repaid balance of loan..

On military leave, in internship or residency training.
Deviated from contract_

1 511

115

181

61

86

78

1 Excludes students who failed or withdrew, died, or were still in school. NOTE.-Since 1960, loan recipients in Mississippi must do obligated service and also repay loans plus interest.

NORTH CAROLINA-LOANS FOR STUDY IN SELECTED HEALTH PROFESSIONS

(Information provided by William F. Henderson, Executive Secretary, North Carolina Medical Care Commission, Feb. 9, 1966)

Of 184 medical students who received loans since the beginning of the program in 1945, 138 had graduated and their status was as follows:

Twenty-seven were in postgraduate training or military service.

Seventy-six had completed obligatory practice (51) or were engaged in it

(25).

Thirty-five had defaulted on their service obligations.

SOUTH CAROLINA-MEDICAL SCHOOL SCHOLARSHIPS

(Information provided by Dr. G. S. T. Peeples, South Carolina State Health officer, Feb. 3, 1966)

Of the students granted scholarships (eight annually), only about 10 percent have fulfilled their service contracts to date. About 70 percent have repaid the money with interest.

VIRGINIA-STATE RURAL PHYSICIAN SCHOLARSHIPS

(Letter from Mack I. Shanholtz, M.D., State health commissioner, Department of Health, Commonwealth of Virginia, Jan. 7, 1966, and attachments) Since 1942 Virginia has had a program of scholarships to medical students who agree in return to practice in rural or certain other shortage areas for a specified length of time. The program currently provides for 20 scholarships annually to the University of Virginia School of Medicine, 20 to the Medical College of Virginia School of Medicine, and 10 to the Virginia State College for Negro students attending Meharry Medical College.

Originally the law provided that the scholarship could be repaid as a loan, but this item was deleted in 1948. In the current law, provision for repayment as a loan is allowed if the recipient withdraws from the program before graduating, if he fails to maintain his scholastic standing, if he becomes permanently disabled, or if at any time he "demonstrates a peculiar and unusual ability and aptitude in a special branch of the medical sciences and, in the opinion of the faculty *** would be a loss to the field of medical research and science if he did not go into that branch of medical science for which he has demonstrated extraordinary ability." The latter provision has been used three times.

As of May 1965, experience with practice obligations among medical students through the 1964 class was as follows:

Mr. DINGELL. Now there are some other questions here that I would like to discuss with you, and in referring now to the student loan provisions, is it fair to say that it is the experience of the Department of Health, Education, and Welfare that NDEA student loan provisions have worked well over the years in terms of stimulating educational activity?

Secretary GARDNER. Yes, sir.

Mr. DINGELL. Is it also fair, Mr. Secretary, in saying that this particular program has operated with fairly limited cost to the Federal Government?

Secretary GARDENER. Yes, sir.

Mr. DINGELL. One of the virtues of this particular program, as I understand it, has been the relatively simplicity of the program. Am I correct?

Secretary GARDNER. Reasonably-reasonable simplicity; yes. It has not always been simple for the colleges to administer these programs. And it certainly will not be simple in the future as the number of loans, the number of students covered rises rapidly.

Mr. DINGELL. I understand that. But in terms of legislative drafting and having to apply for and belong to only one program it has been a fairly simple and effective program, has it not?

Secretary GARDNER. Yes.

Mr. DINGELL. Mr. Secretary, I notice you are setting forth in your statement, as embodied within the provisions of the legislation before this committee no less than four alternatives which would now be available to participating institutions under this particular program? Am I correct?

Secretary GARDNER. Yes, sir.

Mr. DINGELL. This is somewhat a proliferation of different programs to accomplish the same end. Am I correct?

Secretary GARDNER. Well, accomplishing an end which we regard as more advantageous. We think we are getting something for these complexities.

Mr. DINGELL. Can you fairly say that this is going to make for simple administration?

Secretary GARDNER. No, sir. I think that this in some cases may be fairly complex. But I think in some cases it may enable the college, which is not, after all, primarily a lending institution, to unburden itself of some rather complex administrative obligations— complex now and certain to become more burdensome as the load of student loans rises.

Mr. DINGELL. Do you anticipate or can you give this committee some idea of the rise in loans you anticipate or rise in student loan demand under NDEA or similar programs so that we can perhaps understand the wisdom of the four alternatives to the present device?

Secretary GARDNER. Let me just say that one of the basic reasons for moving in this direction is to expand the number of student loans, to permit more students to be covered under the load provisions than could be covered if we simply relied on Federal financing.

Mr. KELLY. I would like to say, Mr. Dingell, that we are endeavoring to parallel in the health profession and nurse program student loans the concepts that are being proposed with respect to all of the college student loan programs.

The health profession student loan program would not be expanded. It would be at the amount authorized and estimated as the amount required but it would parallel the program in which there would be very great expansion. It is anticipated that there will be somewhere between $500 and $900 million worth of additional loan funds made available as a result of last year's enactment of the Higher Education Act which provided for a loan insurance program with subsidized interest and that all that we are endeavoring to do is move in the direction of the use of that program to the maximum extent possible and minimizing the use of the program which requires Federal outlays. Mr. DINGELL. What you are saying essentially then is that you are trying to increase the availability of loans and made more simple the participation by institutions of higher learning in this type of program?

Mr. KELLY. That is right.

Mr. DINGELL. Can you submit to the committee some statistical basis on which we can make a judgment that this in fact will happen and perhaps set aside the fears that have been expressed by-to me by some of the educators in my district that this kind of program