(c) No grant may be made under subsection (a) of this section for any project for any period after grants have been made with respect to such project for five fiscal

years.

PARTIAL REIMBURSEMENT TO DIPLOMA SCHOOLS FOR COSTS ATTRIBUTABLE TO THIS TITLE

SEC. 806. (a) In order to prevent further attrition and promote the development of public and nonprofit private diploma schools of nursing, there are hereby authorized to be appropriated $4,000,000 for the fiscal year ending June 30, 1965, $7,000,000 for the fiscal year ending June 30, 1966, and $10,000,000 for the fiscal year ending June 30, 1967, and each of the two succeeding fiscal years, to defray a portion of the cost of training students of nursing whose enrollment in such schools can be reasonably attributed to the provisions of this title.

(b) From the amounts appropriated pursuant to subsection (a), the Surgeon General shall pay to each public or nonprofit private diploma school of nursing for each fiscal year in the five-year period beginning on July 1, 1964, and ending June 30, 1969, an amount equal to the product of $250 and the sum of the number of federallysponsored students in such school during such year and the number by which the full-time enrollment in such school during such year exceeds the average of the fulltime enrollments in such school during the fiscal years ending June 30, 1962, June 30, 1963, and June 30, 1964, except that no such diploma school of nursing shall for any fiscal year receive an amount in excess of the product of $100 and the full-time enrollment in such school during such year. If the amounts appropriated pursuant to subsection (a) for any fiscal year are inadequate to make the grants provided for in the preceding sentence, the amount of the grant to each such diploma school of nursing shall be reduced so that it shall bear the same ratio to such amounts appropriated for such year as the amount such school would be entitled to under the preceding sentence bears to the aggregate amount which all diploma schools of nursing would be entitled to for such year under such sentence.

(c) For the purposes of this section

(1) the term "federally-sponsored student" means any student enrolled in a public or nonprofit private diploma school of nursing on a full-time basis who has received for that year a loan of $100 or more from a loan fund established pursuant to section 822; and (2) the full-time enrollment in any school and the number of federally-sponsored students in any school shall be determined as of February 15 of each fiscal year.

PART B-ASSISTANCE TO NURSING STUDENTS

TRAINEESHIPS FOR ADVANCED TRAINING OF PROFESSIONAL

NURSES

SEC. 821. (a) There are authorized to be appropriated $8,000,000 for the fiscal year ending June 30, 1965, $9,000,000 for the fiscal year ending June 30, 1966, $10,000,000 for the fiscal year ending June 3, 1967, $11,000,000 for the fiscal year ending June 30, 1968, and $12,000,000 for the fiscal year ending June 30, 1969, to cover the cost of traineeships for the training of professional nurses to teach in the various fields of nurse training (including practical nurse training), to serve in administrative or supervisory capacities, or to serve in other professional nursing specialties determined by the Surgeon General to require advanced training.

(b) Traineeships under this section shall be awarded by the Surgeon General through grants to public or nonprofit private institutions providing the training.

(c) Payments to institutions under this section may be made in advance or by way of reimbursement, and at such intervals and on such conditions, as the Surgeon General finds necessary. Such payments may be used only for traineeships and shall be limited to such amounts as the Surgeon General finds necessary to cover the costs of tuition and fees, and a stipend and allowances (including travel and subsistence expenses) for the trainees.

LOAN AGREEMENTS

SEC. 822. (a) 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 part with any public or nonprofit private school of nursing which is located in a State. (b) Each agreement entered into under this section. 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 paid under this part to the school by the Secretary, (B) an additional amount from other sources equal to not less than oneninth of such Federal capital contributions, (C) collections of principal and interest on loans made from the fund, and (D) any other earnings of the fund;

(3) provide that the fund shall be used only for loans to students of the school in accordance with the agreement and for costs of collection of such loans and interest thereon:

(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 baccalaureate or associate degree in nursing or an equivalent degree or

a diploma in nursing, or to a graduate degree in nursing, and that while the agreement remains in effect no such student who has attended such school before July 1, 1969, shall receive a loan from a loan fund established under section 204 of the National Defense Education Act of 1958; and

(5) contain such other provisions as are necessary to protect the financial interests of the United States.

LOAN PROVISIONS

SEC. 823. (a) The total of the loans for any academic year (or its equivalent, as determined under regulations of the Secretary) made by schools of nursing from loan funds established pursuant to agreements under this part may not exceed $1,000 in the case of any student. In the granting of such loans, a school shall give preference to persons who enter as first-year students after enactment of this title.

(b) Loans from any such student loan fund by any school shall be made on such terms and conditions as the school may determine; subject, however, to such conditions, limitations, and requirements as the Secretary of Health, Education, and Welfare 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 enabling the student to complete his course of study; and except that

(1) such a loan may be made only to a student who (A) is in need of the amount of the loan to pursue a full-time course of study at the school leading to a baccalaureate or associate degree in nursing or an equivalent degree, or a diploma in nursing, or a graduate degree in nursing, and (B) is capable, in the opinion of the school, of maintaining good standing in such course of study:

(2) such a loan shall be repayable in equal or graduated periodic installments (with the right of the borrower to accelerate repayment) over the tenyear period which begins one year after the student ceases to pursue a full-time course of study at a school of nursing, except that (A) interest shall not accrue on any such loan, and periodic installments need not be paid, during any period during which the borrower is pursuing a full-time course of study at a collegiate school of nursing leading to a baccalaureate degree in nursing or an equivalent degree, or to a graduate degree in nursing, and (B) any such period shall not be included in determining such tenyear period;

(3) not to exceed 50 per centum of any such loan (plus interest) shall be canceled for full-time em

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ployment as a professional nurse (including teaching in any of the fields of nurse training and service as an administrator, supervisor, or consultant in any of the fields of nursing) in any public or nonprofit private institution or agency, at the rate of 10 per centum of the amount of such loan plus interest thereon, which was unpaid on the first day of such service, for each complete year of such service:

(4) the liability to repay the unpaid balance of such loan and accrued interest thereon shall be canceled upon the death of the borrower, or if the Secretary determines that he has become permanently and totally disabled;

(5) 164 such a loan shall bear interest on the unpaid balance of the loan, computed only for periods during which the loan is repayable, at the rate of 3 per centum per annum or the going Federal rate at the time the loan is made, whichever is the greater; and for purposes of this paragraph, the term "going Federal rate" means the rate of interest which the Secretary of the Treasury specifies during June of each year for purposes of loans made during the fiscal year beginning on the next July 1, determined by estimating the average yield to maturity, on the basis of daily closing market quotations or prices during the preceding May on all outstanding marketable obligations of the United States having a maturity date of fifteen or more years from the first day of such month of May, and by rounding off such estimated average annual yield to the next higher multiple of one-eighth of 1 per centum: Provided, That notwithstanding the foregoing provisions of this paragraph, the rate of interest determined in accordance with such provisions for the first loan obtained by a student from a loan fund established under this part shall also apply to any subsequent loan to such student from such fund during his course of study;

(6) such a loan shall be made 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;

(7) no note or other evidence of any such loan 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 part, such note or other evidence of a loan may be transferred to such other school.

(c) Where all or any part of a loan, or interest, is canceled under this section, the Secretary of Health, Educa

164 Par. (5) of sec. 823 (b) amended by sec. (g) (1) of P.L. 89-290.

tion, and Welfare shall pay to the school an amount equal to the school's proportionate share of the canceled portion, as determined by the Secretary.

(d) Any loan for any year by a school from a student loan fund established pursuant to an agreement under this part shall be made in such installments as may be provided in regulations of the Secretary or such agreement and, upon notice to the Secretary by the School that any recipient of a loan is failing to maintain satisfactory standing, any or all further installments of his loan shall be withheld, as may be appropriate.

(e) An agreement under this part with any school shall include provisions designed to make loans from the student loan fund established thereunder reasonably available (to the extent of the available funds in such fund) to all eligible students in the school in need thereof.

AUTHORIZATION OF APPROPRIATIONS FOR LOANS

SEC. 824. There are authorized to be appropriated to the Secretary of Health, Education, and Welfare for Federal capital contributions to student loan funds pursuant to section 822 (b) (2) (A) $3,100,000 for the fiscal year ending June 30, 1965, $8,900,000 for the fiscal year ending June 30, 1966, $16,800,000 for the fiscal year ending June 30, 1967, $25,300,000 for the fiscal year ending June 30, 1968, $30,900,000 for the fiscal year ending June 30, 1969, and such sums for the fiscal year ending June 30, 1970, and each of the two succeeding fiscal years as may be necessary to enable students who have received a loan for any academic year ending before July 1, 1969, to continue or complete their education. Sums appropriated pursuant to this section for any fiscal year shall be available, in accordance with agreements under this part, for Federal capital contributions to schools with which such agreements have been made, to be used, together with deposits in such fund pursuant to section 822 (b) (2) (B), for establishment and maintenance of student loan funds.

ALLOTMENTS AND PAYMENTS OF FEDERAL CAPITAL

CONTRIBUTIONS

SEC. 825. (a) Sums appropriated pursuant to section 824 for any fiscal year shall be allotted by the Secretary of Health, Education, and Welfare among the States as follows: (1) He shall allot to each State an amount which bears the same ratio to 50 per centum of such sums as the number of students who graduated from secondary schools in such State during the preceding fiscal year bears to the total number of students who graduated from secondary schools in all of the States during such year; and (2) he shall also allot to each State an amount which bears the same ratio to 50 per centum of such sums as the number of students who will be enrolled full time