patient facility, the applicant or other owner of the facility ceases to be a public or other nonprofit agency qualified to file an application under section 291e of this title, or

(b) the facility shall cease to be used for the teaching purposes (and the other purposes permitted under section 293b of this title) for which it was constructed, unless the Secretary determines, in accordance with regulations, that there is good cause for releasing the applicant or other owner from the obligation to do so, or

(As amended Nov. 18, 1971, Pub. L. 92-157, title I, § 102(c) (5), (f) (2) (C), (j) (1), (5), 85 Stat. 432, 435437.)

AMENDMENTS

1971-Pub. L. 92–157, § 102(c) (5), inserted in introductory text following "twenty years" the parenthetical phrase "(or in the case of interim facilities, within such shorter period as the Secretary shall be regulation prescribe)".

Subsec. (a). Pub. L. 92–157, § 102(f) (2) (C), (j) (1), inserted "or outpatient facility" following "affiliated hospital" and substituted section "291e" for "291h" of this title, respectively.

Subsec. (b). Pub. L. 92-157, § 102(j) (5), inserted "or" at the end of the text.

§ 293d. Definitions.

As used in this part and parts C, E, and F(1) The terms "construction" and "cost of construction" include (A) the construction of new buildings, the expansion of existing buildings, and the acquisition, remodeling, replacement, renovation, major repair (to the extent permitted by regulations), or alteration of existing buildings, including architects' fees, but not including the cost of acquisition of land or off-site improvements, and (B) initial equipment of new buildings and of the expanded, remodeled, repaired, renovated, or altered part of existing buildings; but such term shall not include the construction or cost of construction of so much of any facility as is used or is to be used for sectarian instruction or as a place for religious worship.

(2) The term "nonprofit school" means a school owned and operated by one or more corporations or associations no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

(3) The term "affiliated hospital or affiliated outpatient facility" means a hospital or outpatient facility, as defined in section 2910 of this title, which is not owned by, but is affiliated (to the extent and in the manner determined in accordance with regulations) with, a school of medicine, osteopathy, or dentistry which meets the eligibility conditions set forth in section 293a (b)(1) of this title.

(4) The terms "school of medicine", "school of dentistry", "school of osteopathy", "school of pharmacy", "school of optometry", "school of podiatry", "school of veterinary medicine", and "school of public health" mean a school which provides training leading, respectively, to a degree of doctor of medicine, a degree of doctor of dentistry or an equivalent degree, a degree of doctor of osteopathy, a degree of bachelor of science in pharmacy or an equivalent degree, a degree of doctor of optometry or an equivalent degree, a degree of doctor of podiatry or an

equivalent degree, a degree of doctor of veterinary medicine or an equivalent degree, and a graduate degree in public health, and including advanced training related to such training provided by any such school.

(5) The term "teaching facilities" means areas dedicated for use by students, faculty, or administrative or maintenance personnel for clinical purposes, research activities, libraries, classrooms, offices, auditoriums, dining areas, student activities, or other related purposes necessary for, and appropriate to, the conduct of comprehensive programs of education. Such term includes interim facilities but does not include off-site improvements or living quarters.

(6) The term "interim facilities" means teaching facilities designed to provide teaching space on a short-term (less than ten years) basis while facilities of a more permanent nature are being planned and constructed. (As amended Nov. 18, 1971, Pub. L. 92-157, title I, § 102(c) (1)−(4), (f) (2) (B), 85 Stat. 431, 432, 435.)

AMENDMENTS

1971-Par. (1). Pub. L. 92–157, § 102(c) (1), (4), definedterms "construction" and "cost of construction" to include in cl. (A) the acquisition of existing buildings and substituted a period for a semicolon as the end punctuation, respectively.

Par. (2). Pub. L. 92-157, § 102(c) (4), substituted a period for a semicolon as the end punctuation.

Part. (3). Pub. L. 92-157, § 102(f) (2) (B), included deflnition for "affiliated outpatient facility", substituted reference to section "2910" for "2911" of this title, and included affiliation with a school of dentistry.

Par. (4). Pub. L. 92-157, § 102(c) (3), (4), substituted "an equivalent degree" for "doctor of pharmacy" and "doctor of surgical chiropody" appearing following "bachelor of science in pharmacy" and "doctor of podiatry", and substituted a period for a semicolon as the end punctuation, deleting "and" following the punctuation, respectively.

Par. (5). Pub. L. 92–157, § 102(c) (2), substituted definition of "teaching facilities" for definition of "school of nursing".

Par. (6). Pub. L. 92-157, § 102(c) (2), added par. (8).

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 295e-3 of this title; title 20 section 1132e-1.

§ 293e. National Advisory Council on Education for Health Professions.

(a) Establishment; composition; selection of mem

bers.

There is established in the Public Health Service a National Advisory Council on Health Professions Education (hereafter in this section referred to as the "Council"), consisting of the Secretary (or his delegate), who shall be Chairman of the Council, and twenty members appointed by the Secretary (without regard to the provisions of Title 5 relating to appointments in the competitive service) from persons who because of their education, experience, or training are particularly qualified to advise the Secretary with respect to the programs of assistance authorized by parts B, C, D, E, and F of this subchapter. At least four of the appointed members shall be selected from the general public and two shall be selected from among full-time students enrolled in health professions schools. (b) Functions.

The Council shall advise the Secretary in the preparation of general regulations and with respect

to policy matters arising in the administration of this subchapter (other than parts A and G thereof).

(c) Administration.

The Secretary may use the services of any member or members of the Council in connection with matters related to the administration of this subchapter (other than parts A and G thereof), for such periods, in addition to conference periods, as he may determine. (As amended Nov. 18, 1971, Pub. L. 92157, title I, § 108 (a), 85 Stat. 460.)

AMENDMENTS

1971-Subsec. (a). Pub. L. 92-157 substituted "National Advisory Council on Health Professions Education" for "National Advisory Council on Education for Health Professions", "Secretary (or his delegate)" for "Surgeon General", eliminated ex officio status of the Surgeon General and the Commissioner of Education, increased membership from seventeen to twenty, substituted provision respecting appointments because of education, experience, or training of the appointees for prior provisions for selection from leading authorities in the fields of higher education, nine of whom to be particularly concerned with training in medicine, dentistry, osteopathy, pharmacy, optometry, podiatry, veterinary medicine, or public health professions, and spelling out certain factors such as experience in planning, constructing, financing, or administration of schools and familiarity with need for teaching facilities in all areas of the Nation, and provided for two appointees from among full-time students enrolled in health professions schools. Subsec. (b). Pub. L. 92-157 substituted "Secretary" for "Surgeon General" and "administration of this subchapter (other than parts A and G thereof)" for "administration of this part" and eliminated provision respecting advisory function in reviewing applications under this part.

Subsec. (c). Pub. L. 92–157 substituted "Secretary" for "Surgeon General", and "administration of this subchapter (other than parts A and G thereof)" for "administration of this part" and eliminated sentence for consultation between and coordination of work of Council and National Advisory Council on Health Research Facilities relating to matters of this part.

Subsec. (d). Pub. L. 92-157 struck out subsec. (d) compensation and travel expenses provisions. Such subsec. (d) had previously been repealed by Pub. L. 91-515. See 1970 Amendment Note.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 295f-5, 295g of this title.

§ 293g. Regulations.

(a) The Secretary, after consultation with the Council, shall prescribe general regulations for this part covering the eligibility of institutions, the order of priority in approving applications, the terms and conditions for approving applications, determinations of the amounts of grants, and minimum standards of construction and equipment for various types of institutions.

(b) The Secretary may make such other regulations as he finds necessary to carry out the provisions of this part. (As amended Nov. 18, 1971, Pub. L. 92-157, title I, § 102(j) (7) (B), 85 Stat. 437.)

AMENDMENTS

1971-Subsec. (a). Pub. L. 92-157 substituted "The Secretary, after consultation with the Council" for "The Surgeon General, after consultation with the Council and with the approval of the Secretary".

Subsec. (b). Pub. L. 92-157 substituted "The Secretary may make" for "The Surgeon General is authorized to make, with the approval of the Secretary".

§ 293h. Technical assistance.

The Secretary may provide technical assistance (1) to applicants under this part and other public or nonprofit private schools, agencies, organizations, and institutions, and combinations thereof, in designing and planning the construction of any facility for which financial assistance may be provided under this part, and (2) to State or interstate planning agencies established to plan programs for relieving shortages of training capacity for health personnel. (As amended Nov. 18, 1971, Pub. L. 92-157, title I, § 102 (i), 85 Stat. 436.)

AMENDMENTS

1971-Pub. L. 92-157, in revising the text, authorized the Secretary, rather than the Surgeon General, to provide technical assistance, provided for the assistance to applicants under this part and other public or nonprofit private schools, agencies, organizations, and institutions, and combinations thereof and to State or interstate planning agencies, formerly limited to State or interstate planning agencies, substituted provision respecting planning of programs for relieving shortages of training capacity for health personnel for former povision for relieving such shortages in the fields of medicine, dentistry, osteopathy, pharmacy, optometry, podiatry, and public health, and substituted provision for assistance in designing and planning the construction of facilities for former provision for assistance through constructing teaching facilities, providing adeqaute financial support to schools, or otherwise.

§ 293i. Loan guarantees and interest subsidies.

(a) Eligibility of private entity; commitments; percentage limitation.

To assist nonprofit private entities to carry out approved construction projects for teaching facilities, the Secretary may, during the period beginning July 1, 1971, and ending with the close of June 30, 1974, guarantee (in accordance with this section and subject to subsection (f) of this section) to any non-Federal lender which makes a loan to such an entity for such a project payment when due of the principal of and interest on such loan if such entity is eligible (as determined under regulations of the Secretary) for a grant under this part for such project. The Secretary may make commitments, on behalf of the United States, to make such loan guarantees prior to the making of such loans. No such loan guarantee (1) may, except under such special circumstances and under such conditions as are prescribed by regulations, apply to any amount which, when added to any grant under this part or any other law of the United States, exceeds 90 per centum of the cost of construction of the project, or (2) may apply to more than 90 per centum of the loss of principal of and interest on the loan.

(b) Amount of interest subsidy.

In the case of any nonprofit private entity which is eligible (as determined under regulations of the Secretary) for a grant under this part to assist it in carrying out an approved construction project for teaching facilities after June 30, 1971, and to whom a loan has been made by a non-Federal lender to assist it in carrying out such project, the Secretary, during the period beginning July 1, 1971, and ending with the close of June 30, 1974, may, subject to subsection (f) of this section, pay to the holder of such loan (and for and on behalf of the entity which received such loan) amounts sufficient to reduce by

not to exceed 3 per centum per annum the net effective interest rate otherwise payable on such loan.

(c) Application; contents; approval by Secretary; terms, conditions, security, and repayments schedule; interest rate; loan not otherwise available.

A loan guarantee or interest subsidy payment may be made under this section only upon an application (submitted in such manner and containing such information as the Secretary may by regulations require) approved by the Secretary. The Secretary may not approve an application for a loan guarantee or interest subsidy payment unless he determines that the terms, conditions, security (if any), and schedule and amount of repayments with respect to the loan are sufficient to protect the financial interests of the United States and are otherwise reasonable, including a determination that the rate of interest does not exceed such per centum per annum on the principal obligation outstanding as the Secretary determines to be reasonable, taking into account the range of interest rates prevailing in the private market for similar loans and the risks assumed by the United States. The Secretary may not approve an application for a loan guarantee, unless he determines that the loan would not be available on reasonable terms and conditions without the guarantee under this section.

(d) Recovery right; waiver; subrogation; modification of terms and conditions; incontestability: fraud or misrepresentation exceptions.

(1) The United States shall be entitled to recover from the applicant for a loan guarantee under this section the amount of any payment made pursuant to such guarantee, unless the Secretary for good cause waives such right of recovery; and, upon making any such payment, the United States shall be subrogated to all of the rights of the recipient of the payments with respect to which the guarantee was made.

(2) To the extent permitted by paragraph (3), any terms and conditions applicable to a loan guarantee under this section may be modified by the Secretary to the extent he determines it to be consistent with the financial interest of the United States.

(3) Any loan guarantee made by the Secretary pursuant to this section shall be incontestable in the hands of an applicant on whose behalf such guarantee is made, and as to any person who makes or contracts to make a loan to such applicant in reliance thereon, except for fraud or misrepresentation on the part of such applicant or such other person. (e) Loan guarantee and interest subsidy fund; establishment; fiscal year availability; sources of moneys: appropriations authorization; operations under section; notes or obligations: issuance by Secretary, forms and denominations, maturities, terms and conditions, interest rate, purchase and sale by Secretary of Treasury: conditions and restrictions, redemption.

There is established in the Treasury a loan guarantee and interest subsidy fund (hereinafter in this subsection referred to as the "fund") which shall be available to the Secretary without fiscal year limitation, in such amounts as may be specified from time to time in appropriation Acts, (1) to enable him to discharge his responsibilities under guarantees issued by him under this section, and (2) for interest

subsidy payments authorized by this section. There are authorized to be appropriated from time to time such amounts as may be necessary to provide the sums required for the fund; except that the amount appropriated for interest subsidy payments may not exceed $8,000,000 in the fiscal year ending June 30, 1972, $16,000,000 in the fiscal year ending June 30, 1973, and $24,000,000 in the fiscal year ending June 30, 1974. There shall also be deposited in the fund amounts received by the Secretary or other property or assets derived by him from his operations under this section, including any money derived from the sale of assets. If at any time the sums in the fund are insufficient to enable the Secretary to discharge his responsibilities under guarantees issued by him under this section or to make interest subsidy payments authorized by this section, he is authorized to issue to the Secretary of the Treasury notes or other obligations in such forms and denominations, bearing such maturities, and subject to such terms and conditions, as may be prescribed by the Secretary with the approval of the Secretary of the Treasury, but only in such amounts as may be specified from time to time in appropriation Acts. Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of the notes or other obligations. The Secretary of the Treasury shall purchase any notes and other obligations issued hereunder and for that purpose he may use as a public debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, and the purposes for which the securities may be issued under that Act are extended to include any purchase of such notes and obligations. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired by him under this subsection. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or other obligations shall be treated as public debt transactions of the United States. Sums borrowed under this subsection shall be deposited in the fund and redemption of such notes and obligations shall be made by the Secretary from the fund.

(f) Limitations.

(1) The cumulative total of the principal of the loans outstanding at any time with respect to which guarantees have been issued under this section may not exceed such limitations as may be specified in appropriation Acts.

(2) In any fiscal year no loan guarantee may be made under subsection (a) of this section and no agreement to make interest subsidy payments may be entered into under subsection (b) of this section if the making of such guarantee or the entering into of such agreement would cause the cumulative total of

(A) the principal of the loans guaranteed under subsection (a) of this section in such fiscal year, and

(B) the principal of the loans for which no guarantee has been made under subsection (a)

of this section and with respect to which an agreement to make interest subsidy payments is entered into under subsection (b) of this section in such fiscal year,

to exceed the amount of grant funds obligated under this part in such fiscal year; except that this paragraph shall not apply if the amount of grant funds obligated under this part in such fiscal year equals the sums appropriated for such fiscal year under section 293 of this title.

(g) Administrative assistance.

The Secretary, with the consent of the Secretary of Housing and Urban Development, may obtain from the Department of Housing and Urban Development such assistance with respect to the administration of this section as will promote efficiency and economy thereof. (July 1, 1944, ch. 373, title VII, § 729, as added Nov. 18, 1971, Pub. L. 92-157, title I, § 102(d), 85 Stat. 432.)

REFERENCES IN TEXT

The Second Liberty Bond Act, referred to in subsec. (e), is Act Sept. 24, 1917, c. 56, 40 Stat. 288, as amended, which is classified to section 745, former section 747, sections 752, 752a, 753, 754, 754a, 754b, 757, 757b, and 757c, former section 757c-1, sections 757c-2, 757c-3, 757c-4, 757d, 757e, 758, 760, 764, former section 765, and sections 766, 769, 771, 773, 774, and 801 of Title 31, Money and Finance. That Act, referred to in subsec. (e), means the Second Liberty Bond Act.

PART C.-STUDENT LOANS

PART REFERRED TO IN OTHER SECTIONS

This part is referred to in sections 293d, 293e of this title.

Subpart I.-Loans to Students Studying in the United States

AMENDMENTS

1971-Pub. L. 92-157, title I, § 105 (f) (1), Nov. 18, 1971, 85 Stat. 451, added the heading of subpart I.

SUBPART REFERRED TO IN OTHER SECTIONS

This subpart is referred to in sections 294g, 295g-1 of this title.

§ 294. Loan agreements for establishment of student loan funds.

(a) Authority of Secretary of Health, Education, and Welfare.

The Secretary of Health, Education, and Welfare 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, osteopathy, dentistry, pharmacy, podiatry, optometry, or veterinary medicine which is located in a State and is accredited as provided in section 293a (b) (1) (B) of this title.

(b) Terms and conditions.

Each agreement entered into under this section shall

(4) provide that loans may be made from such fund only to students pursuing 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 podiatry or an equivalent degree, doctor of optom

etry or an equivalent degree, or doctor of veterinary medicine or an equivalent degree and that while the agreement remains in effect no such student who has attended such school before July 1, 1974 shall receive a loan from a loan fund established under section 424 of Title 20; and

(As amended Nov. 18, 1971, Pub. L. 92-157, title I, § 105(e) (1), (4), (f) (2), 85 Stat. 451.) AMENDMENTS

1971-Subsec. (a). Pub. L. 92-157, § 105(f)(2), substituted "this subpart" for "this part".

Subsec. (b) (4). Pub. L. 92–157, § 105(e)(1), (4), substituted "1974" for "1971” and “an equivalent degree" for "doctor of pharmacy" and "doctor of surgical chiropody" appearing following "bachelor of science in pharmacy" and "doctor of podiatry", respectively.

§ 294a. Loan provisions.

(a) Academic year limitation.

Loans from a loan fund established under this subpart may not exceed $3,500 for any student for any academic year or its equivalent.

(b) School determination of terms and conditions; needy students eligible.

Any such loans shall be made on such terms and conditions as the school may determine, but may be made only to a student 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 podiatry or an equivalent degree, doctor of optometry or an equivalent degree, or doctor of veterinary medicine or an equivalent degree.

(c) Repayment in periodic installments; acceleration; commencement and duration of period; exclusions from period.

Such loans 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 one year after the student ceases to pursue a full-time course of study at a school of medicine, osteopathy, dentistry, pharmacy, podiatry, optometry, or veterinary medicine excluding from such ten-year period all periods (up to three years) of (1) active duty performed by the borrower as a member of a uniformed service, or (2) service as a volunteer under the Peace Corps Act; and periods of advanced professional training including internships and residencies) 1

1

(f) Payment of principal and interest for practice in physician etc. shortage areas; limitation; liability for reimbursement; election of loan cancellation under amended or original provisions.

(1) In the case of any individual—

(A) who has received a degree of doctor of medicine, doctor of osteopathy, doctor of dentistry or an equivalent degree, doctor of veterinary medicine or an equivalent degree, doctor of optometry or an equivalent degree, bachelor of science in pharmacy or an equivalent degree, or doctor of podiatry or an equivalent degree;

1 So in original. There is no opening parenthesis.

(B) who obtained (i) one or more loans from a loan fund established under this part, or (ii) any other educational loan for his costs at a school of medicine, osteopathy, dentistry, veterinary medicine, optometry, pharmacy, or podiatry; and

(C) who enters into an agreement with the Secretary to practice his profession (as a member of the National Health Service Corps or otherwise) for a period of at least two years in an area in a State designated under section 254b(b) of this title or otherwise determined by the Secretary, after consultation with the appropriate State health authority (as determined by the Secretary by regulations) to have a shortage of and need for persons trained in his profession; the Secretary shall make payments in accordance with paragraph (2), for and on behalf of that individual, on the principal of and interest on any loan of his described in subparagraph (B) of this paragraph which is outstanding on the date he begins the practice specified in the agreement described in subparagraph (C) of this paragraph.

(2) The payments described in paragraph (1) shall be made by the Secretary as follows:

(A) Upon completion by the individual for whom the payments are to be made of the first year of the practice specified in the agreement he entered into with the Secretary under paragraph (1), the Secretary shall pay 30 per centum of the principal of, and the interest on each loan of such individual described in paragraph (1)(B) which is outstanding on the date he began such practice.

(B) Upon completion by that individual of the second year of such practice, the Secretary shall pay another 30 per centum of the principal of, and the interest on each such loan.

(C) Upon completion by that individual of a third year of such practice, the Secretary shall pay another 25 per centum of the principal of, and the interest on each such loan.

(3) Notwithstanding the requirement of completion of practice specified in paragraph (2), the Secretary shall, on or before the due date thereof, pay any loan or loan installment which may fall due within the period of practice for which the borrower may receive payments under this subsection, upon the declaration of such borrower, at such times and in such manner as the Secretary may prescribe (and supported by such other evidence as the Secretary may reasonably require), that the borrower is then engaged as described by paragraph (1) or (2) (C), and that he will continue to be so engaged for the period required (in the absence of this paragraph) to entitle him to have made the payments provided by this subsection for such period; except that not more than 85 per centum of the principal of any such loan shall be paid pursuant to this paragraph.

(4) A borrower who fails to fulfill an agreement with the Secretary entered into under paragraph (1) shall be liable to reimburse the Secretary for any payments made pursuant to paragraph (2) (A) or paragraph (3) in consideration of such agreement.

(5) Notwithstanding the amendment made by section 105 (b)(1) of the Comprehensive Health Manpower Training Act of 1971 to this subsection

(A) any person who obtained one or more loans from a loan fund established under this part, who before the date of the enactment of such Act became eligible for cancellation of all or part of such loans (including accrued interest) under this subsection (as in effect on the day before such date), and who on such date was not engaged in a practice for which loan cancellation was authorized under this subsection (as so in effect), may at any time elect to receive such cancellation in accordance with this subsection (as so in effect); and

(B) in the case of any person who obtained one or more loans from a loan fund established under this part and who on such date was engaged in a practice for which cancellation of all or part of such loans (including accrued interest) was authorized under this subsection (as so in effect), this subsection (as so in effect) shall continue to apply to such person for purposes of providing such loan cancellation until he terminates such practice.

Nothing in this paragraph shall be construed to prevent any person from entering into an agreement for loan cancellation under this subsection (as amended by section 105 (b) (1) of such Act).

(g) Security or endorsement; minor borrowers.

Loans shall be made under this subpart without security or endorsement, except that if the borrower is a minor and the note or other evidence of obligation executed by him would not, under the applicable law, create a binding obligation, either security or endorsement may be required.

(h) Transfer or assignment of evidences of loans.

No note or other evidence of a loan made under this subpart may be transferred or assigned by the school making the loan except that, if the borrower transfers to another school participating in the program under this subpart such note or other evidence of a loan may be transferred to such other school.

(j) Penalty for late payment.

Subject to regulations of the Secretary, a school may assess a charge with respect to a loan made under this subpart for failure of the borrower to pay all or any part of an installment when it is due and, in the case of a borrower who is entitled to deferment of the loan under subsection (c) of this section or cancellation of part or all of the loan under subsection (f) of this section, for any failure to file timely and satisfactory evidence of such entitlement. The amount of any such charge may not exceed $1 for the first month or part of a month by which such installment or evidence is late and $2 for each such month or part of a month thereafter. The school may elect to add the amount of any such charge to the principal amount of the loan as of the first day after the day on which such installment or evidence was due, or to make the amount of the charge payable to the school not later than the due date of the