Part B of title VII of the Act and of the program, he may authorize such exceptions or modifications;

(b) Estimated cost of acquisition and remodeling: suitability of facility. Each application for a project involving the acquisition of existing facilities shall include in the detailed estimates of the cost of the project, the cost of acquiring such facilities, and any cost of remodeling, renovating or altering such facilities to serve the purposes for which they are acquired. Such application shall demonstrate to the satisfaction of the Secretary that the architectural, structural and other pertinent features of the facility, as modified by any proposed expansion, remodeling, renovation, or alteration, will be clearly suitable for the purposes of the program, and, to the extent of the costs in which Federal participation is requested, are not in excess of what is necessary for the services proposed to be provided in such facilities;

(c) Determination of necessary cost. The necessary cost of acquisition of existing facilities will be determined on the basis of such documentation submitted by the applicant as the Secretary may prescribe (including the reports of such real estate appraisers as the Secretary may approve) and other relevant factors;

(d) Bona fide sale. Federal participation in the acquisition of existing facilities is on condition that such acquisition constitutes a bona fide sale involving an actual cost to the applicant and will result in additional or improved facilities for purposes of the program; and

(e) Facility which has previously received Federal grant. No grant for the acquisition of a facility which has previously received a Federal grant for construction, acquisition, or equipment shall serve either to reduce or restrict the liability of the applicant or any other transferor or transferee from any obligation of accountability imposed by the Federal Government by reason of such prior grant.

any award when in his judgment such conditions are necessary to assure or protect advancement of the approved project, the interest of public health or the conservation of grant funds.

§ 57.112 Early termination and withholding of payments.

Whenever the Secretary finds that a grantee has failed in a material respect to comply with the applicable provisions of the Act, the regulations of this subpart or the terms of the grant, he may, on reasonable notice to the grantee, withhold further payments, and take such other action, including the termination of the grant, as he finds appropriate to carry out the purposes of the applicable provisions of the Act and regulations. Noncancellable obligations of the grant properly incurred prior to the receipt of the notice of termination will be honored. The grantee shall be promptly notified of such termination in writing and given the reasons therefor.

APPENDIX A-MINIMUM STANDARDS OF

CONSTRUCTION AND EQUIPMENT

The minimum standards of construction and equipment set forth below have been established by the Secretary as required by section 727 of the Act. In accordance with 5 U.S.C. 552(a)(1), the publications to which reference is made in this Appendix A, unless otherwise indicated, are hereby incorporated by reference and made a part hereof. These documents are available for inspection at the Department's and Regional Offices' Information Centers listed in 45 CFR 5.31 and copies of such documents may be purchased as specified. These standards are applicable to all projects approved for construction grants under Part B of title VII of the Act; in addition, teaching hospitals and outpatient facilities are also required to comply with the requirements of "Minimum Requirements of Construction and Equipment for Hospital and Medical Facilities' (DHHS Publication No. (IBR)74-4000)" which document is incorporated by reference in § 53.101(a) of this chapter. Said document will be provided to all applicants with a need therefor, and is available to any interested person, whether or not affected by the provisions of this subpart, upon request to the Regional Office of the Department of Health and Human Services or the Public Inquiries Branch, Public Health Service, Washington, D.C.

(a) General. The structural design, construction, and fire safety provisions of all

project facilities shall comply with the standards of the National Building Code, 1967 (available from American Insurance Association Engineering and Safety Department, 85 John Street, New York, NY 10038, or 120 South La Salle Street, Chicago, IL 60603, or 465 California Street, San Francisco, CA 94104) or with applicable State, local codes and ordinances, whichever is more restrictive.

(b) Mechanical. All installations of fuel burning equipment, steam, heating, air conditioning and ventilation, plumbing and other piping systems and boilers shall comply with the following standards:

(1) Handbook of Fundamentals: American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE) 1972; United Engineer Center, 345 East 47th Street, New York NY 10017.

(2) National Standard Plumbing Code 1955; American Society of Mechanical Engineers (ASME); United Engineer Center, 345 East 47th Street, New York, NY 10017.

(3) Boiler and Pressure Vessel Code, 1971 edition, with current addenda, section 8, Division I. American Society of Mechanical Engineers (ASME); United Engineer Center, 345 East 47th Street, New York, NY 10017.

(c) Fire and safety. The fire-resistant design criteria for the facility will be governed by the criteria necessary for that portion of the facility which is subject to the most severe usage. Remodeled structures shall be upgraded, in total, unless it is feasible to isolate the improved portion of the building with fire walls and fire doors. Fireresistant design shall be in accordance with the standards of Fire Safety Code Number 101, 1970, National Fire Protection Association, International, 60 Batterymarch Street, Boston, MA 02110.

(d) Emergency electrical service. Fire alarm systems and other electrical service shall conform to the standards as specified in Life Safety Code Number 101, 1970, National Fire Protection Association, International, 60 Batterymarch Street, Boston, MA 02110.

(e) Electrical. All electrical installations and equipment shall be in accordance with State and local codes and applicable sections of National Electric Code, NFPA Bulletin No. 70 HC, 1971, National Fire Protection Association, International, 60 Batterymarch Street, Boston, MA 02110.

(f) Radiation protection. All areas in which X-ray, gamma-ray, beta-ray producing and similar equipment is located shall be protected from radiation in accordance with the standards which are in the handbook reports No. 33, 1968; 34, 1970; 35, 1970, and 36, 1970, of the National Council on Radiation Protection and Measurement, Box 4867, Washington, DC 20008.

(g) Earthquake. All facilities shall be designed and constructed in accordance with

As used in this subpart:

"Act" means the Public Health Service Act, as amended.

"Date upon which a student ceases to be a full-time student" means the first day of the month which is nearest to the date upon which an individual ceases to be a full-time student as defined in this section.

"Federal capital loan" means a loan made by the Secretary to a school under section 744(a) of the Act, as in effect prior to October 1, 1977, the proceeds of which are to be returned to the Secretary.

"Full-time student" means a student who is enrolled in a health professions school and pursuing a course of study which is a full-time academic workload, as determined by the school, leading to a degree specified in section 741(b) of the Act.

"Health professions school" or "school" means a public or private nonprofit school of medicine, school of dentistry, school of osteopathy, school

of pharmacy, school of podiatry, school of optometry, and school of veterinary medicine as defined in section 701(4) of the Act.

"Health professions student loan" means the amount of money advanced to a student by a school from a health professions student loan fund under a properly executed promissory note.

"Institutional capital contribution" means the money provided by a school, in an amount not less than one-ninth of the federal capital contribution, and deposited in a health professions student loan fund.

"National of the United States" means (1) a citizen of the United States, or (2) a person who, though not a citizen of the United States, Owes permanent allegiance to the United States.

"School year" means the traditional approximately 9-month September to June annual session. For the purpose of computing school year equivalents for students who, during a 12-month period, attend for a longer period than the traditional school year, the school year will be considered to be 9 months in length.

"Secretary" means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

"State" means, in addition to the several States, only the District of Columbia, the Commonwealth of Puerto Rico. The Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, and the Trust Territory of the Pacific Islands.

§ 57.203 Application by school.

(a) Each school seeking a federal capital contribution must submit an application at the time and in the form and manner than the Secretary may require.1 The application must be signed by an individual authorized to act for the applicant and to assume on behalf of the applicant the obligations imposed by the statute, the regula

1 Applications and instructions are available from the Division of Manpower Training Support, Bureau of Health Manpower, Center Building, 3700 East-West Highway, Hyattsville, Maryland 20782.

tions of this subpart, and the terms and conditions of the award.

(b) Each application will be reviewed to determine eligibility and the reasonableness of the amount of Federal support requested. The Secretary may require the applicant to submit additional data for this purpose.

(c) An application will not be approved unless an agreement between the Secretary and the applicant school for a federal capital contribution under section 740 of the Act is reached.

§ 57.204 Payment of Federal capital con

tributions.

(a) Annual payment. The Secretary will make payments to each school with which he or she has entered into an agreement under the Act at a time determined by him or her. If the total of the amounts requested for any fiscal year by all schools for federal capital contributions exceeds the amount of Federal funds determined by the Secretary at the time of payment to be available for this purpose, the payment to each school will be reduced to whichever is smaller:

(1) The amount requested in the application, or

(2) An amount which bears the same ratio to the total amount of Federal funds determined by the Secretary at the time of payment to be available for that fiscal year for the Health Professions Student Loan Program as the number of full-time students estimated by the Secretary to be enrolled in that school bears to the estimated total number of full-time students in all participating schools during that year. Amounts remaining after these payments are made will be distributed in accordance with this paragraph among schools whose applications requested more than the amount paid to them, but with whatever adjustments that may be necessary to prevent the total paid to any school from exceeding the total requested by it.

(b) Method of payment. The payment of federal capital contributions to a school will be paid in a manner that avoids unnecessary accumulations of money in any health professions student loan fund.

§ 57.205 Health professions student loan funds.

(a) Funds established with federal capital contributions. Any fund established by a school with federal capital contributions will be deposited and carried in a special account of the school. At all times the fund must contain monies representing the institutional capital contribution. This fund is to be used by the school only for

(1) Health professions student loans to full-time students;

(2) Capital distribution as provided in section 743 of the Act or as agreed to by the school and the Secretary,

(3) Costs of litigation and, to the extent specifically approved by the Secretary, other collection costs that exceed the usual expenses incurred in the collection of health professions student loans.

§ 57.206 Eligibility and selection of health professions student loan applicants.

(a) Determination of eligibility. (1) Applicants are eligible for consideration for a health professions student loan if they are:

(i) Nationals of the United States, permanent residents of the Trust Territory of the Pacific Islands or the Northern Mariana Islands or lawful permanent residents of the United States, Puerto Rico, the Virgin Islands or Guam;

(ii) Enrolled, or accepted for enrollment in the school as full-time students;

(iii) In need of the amount of the loan to pursue a full-time course of study at the school; and

(iv) of exceptional financial need in the case of students of medicine or osteopathy who will graduate after June 30, 1979. A student will be considered to demonstrate exceptional financial need if the school determines that his or

her resources, as described in § 57.206(b)(1), do not exceed the lesser of $5,000 or one-half of the costs of attendance at the school. Summer earnings, educational loans, veterans (G.I.) benefits and earnings during the school year will not be considered as resources in determining whether an applicant meets the eligibility criteria for exceptional financial need.

(2) The school must provide written notification to each applicant of the provisions of section 741(f) of the Act under which the Secretary may repay all or part of a loan.

(b) Selection of applicants. The school will select qualified applicants, including medical and osteopathic applicants, and determine the amount of student loans by considering:

(1) The financial resources available to the student by using one of the national need analysis systems or any other procedure approved by the Commissioner of Education and published under 45 CFR 144.13 in combination with other information which the school has regarding the student's financial status. The school must take into account, regardless of the tax status of the student, the expected contribution from parents, spouse, self or other family members; and

(2) The costs reasonably necessary for the student's attendance at the school, including any special needs and obligations which directly affect the student's ability to attend the school on a full-time basis. The school must document the criteria used for determining these costs.

(c) Selection of medical and osteopathic student applicants. In addition to the factors in § 57.206(b), the school must select medical and osteopathic students graduating after June 30, 1979, based on the order of greatest need, taking into consideration the other resources available to the student through the school. For purposes of establishing priority for selecting medical and osteopathic student applicants to receive health professions student loans, summer earnings, educational loans, veterans (G.I.) benefits, and earnings during the school year will be considered as financial resources.

[44 FR 32698, June 7, 1979]

§ 57.207 Maximum amount of health professions student loans.

The total of the health professions student loans made from the fund to any student for a school year may not exceed $2,500 and the cost of tuition. The maximum amount loaned during a 12-month period to any student en

rolled in a school which provides a course of study longer than the 9month school year may be proportionately increased.

§ 57.208 Health professions student loan promissory note.

(a) Promissory note form. Each health professions student loan must be evidenced by a promissory note approved by the Secretary.

(1) Each promissory note must state that the loan will bear interest on the unpaid balance computed only for periods during which repayment of the loan is required, at the rate of 7 percent per year.

(2) A copy of each, executed note must be supplied by the school to the student borrower.

(b) Security. A school may require security or endorsement only if the borrower is a minor and if, under the applicable State law, the note signed by him or her would not create a binding obligation.

§ 57.209 Payment of health professions student loans.

(a) Health professions student loans from any fund may be paid to or on behalf of student borrowers in installments considered appropriate by the school except that a school may not pay to or on behalf of any borrower more during any given installment period (e.g., semester, term, or quarter) than the school determines the student needs for that period.

(b) No payment may be made from a fund to or on behalf of any student borrower if at the time of the payment the borrower is not a full-time student.

§ 57.210 Repayment and collection of health professions student loans.

(a) Each health professions student loan, including accrued interests, will be repayable in equal or graduated periodic installments in amounts calculated on the basis of a 10-year repayment period. Except as otherwise provided in this paragraph, repayment of a loan must begin one year after the student ceases to be a full-time student.

(1) If a borrower reenters the same or another school as a full-time stu

dent within the 1-year period, the date upon which interest will accrue and the repayment period will begin will be determined by the date on which the student last ceases to be a fulltime student at that school.

(2) The following periods will be exIcluded from the 10-year repayment period: (i) all periods for up to a total of 3 years of active duty performed by the borrower as a member of the Army, Navy, Air Force, Marine Corps, Coast Guard, National Oceanic and Atmospheric Administration Corps or the U.S. Public Health Service Corps; (ii) all periods for up to a total of 3 years of service as a volunteer under the Peace Corps Act; and (iii) all periods of advanced professional training except that with respect to health professions student loans made prior to November 18, 1971 but after June 30, 1969, these periods of advanced training may not exceed a total of 5 years.2

(3) Each student borrower may, subject to the provisions of paragraph (b)(3) of this section, choose the repayment schedule which he or she prefers from those in use by the school, but a student borrower may at his or her option and without penalty, prepay all or part of the principal and accrued interest at any time.

(b) Collection of health professions student loans. (1) Each school at which a fund is established must exercise due diligence in the collection of all health professions student loans due the fund. The school must use the collection practices which are generally accepted among institutions of higher education and which are at least as extensive and effective as those used in the collection of other student loan accounts due the school.

(2) With respect to any health professions student loan made after June

2 Individuals who received health professions student loans prior to July 1, 1969, remain subject to the repayment provisions of 42 CFR 57.214(a)(2) (1976) as adopted on February 7, 1974. These provisions can be found at 39 FR 4773 (Feb. 7, 1974) and a copy can be obtained by writing the Divisions of Manpower Training Support, Bureau of Health Manpower, Center Building, 3700 East-west Highway, Hyattsville, Maryland. 20782.