
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC254l-1]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 6A--PUBLIC HEALTH SERVICE
 
                SUBCHAPTER II--GENERAL POWERS AND DUTIES
 
                       Part D--Primary Health Care
 
       subpart iii--scholarship program and loan repayment program
 
Sec. 254l-1. National Health Service Corps Loan Repayment 
        Program
        

(a) Establishment

    The Secretary shall establish a program to be known as the National 
Health Service Corps Loan Repayment Program to assure, with respect to 
the provision of primary health services pursuant to section 254d(a)(2) 
of this title--
        (1) an adequate supply of physicians, dentists, certified nurse 
    midwives, certified nurse practitioners, and physician assistants; 
    and
        (2) if needed by the Corps, an adequate supply of other health 
    professionals (including mental health professionals).

(b) Eligibility

    To be eligible to participate in the Loan Repayment Program, an 
individual must--
        (1)(A) must \1\ have a degree in medicine, osteopathic medicine, 
    dentistry, or other health profession, or be certified as a nurse 
    midwife, nurse practioner,\2\ or physician assistant;
---------------------------------------------------------------------------
    \1\ So in original. The word ``must'' probably should not appear.
    \2\ So in original. Probably should be ``practitioner,''.
---------------------------------------------------------------------------
        (B) be enrolled in an approved graduate training program in 
    medicine, osteopathic medicine, dentistry, behavioral and mental 
    health, or other health profession; or
        (C) be enrolled as a full-time student--
            (i) in an accredited (as determined by the Secretary) 
        educational institution in a State; and
            (ii) in the final year of a course of a study or program, 
        offered by such institution and approved by the Secretary, 
        leading to a degree in medicine, osteopathic medicine, 
        dentistry, or other health profession;

        (2) be eligible for, or hold, an appointment as a commissioned 
    officer in the Regular or Reserve Corps of the Service or be 
    eligible for selection for civilian service in the Corps; and
        (3) submit to the Secretary an application for a contract 
    described in subsection (f) of this section (relating to the payment 
    by the Secretary of the educational loans of the individual in 
    consideration of the individual serving for a period of obligated 
    service).

(c) Information to be included with application and contract forms; 
        understandability; availability

                     (1) Summary and information

        In disseminating application forms and contract forms to 
    individuals desiring to participate in the Loan Repayment Program, 
    the Secretary shall include with such forms--
            (A) a fair summary of the rights and liabilities of an 
        individual whose application is approved (and whose contract is 
        accepted) by the Secretary, including in the summary a clear 
        explanation of the damages to which the United States is 
        entitled under section 254o of this title in the case of the 
        individual's breach of the contract; and
            (B) information respecting meeting a service obligation 
        through private practice under an agreement under section 254n 
        of this title and such other information as may be necessary for 
        the individual to understand the individual's prospective 
        participation in the Loan Repayment Program and service in the 
        Corps.

                        (2) Understandability

        The application form, contract form, and all other information 
    furnished by the Secretary under this subpart shall be written in a 
    manner calculated to be understood by the average individual 
    applying to participate in the Loan Repayment Program.

                          (3) Availability

        The Secretary shall make such application forms, contract forms, 
    and other information available to individuals desiring to 
    participate in the Loan Repayment Program on a date sufficiently 
    early to ensure that such individuals have adequate time to 
    carefully review and evaluate such forms and information.

                    (4) Recruitment and retention

        (A) The Secretary shall distribute to health professions schools 
    materials providing information on the Loan Repayment Program and 
    shall encourage the schools to disseminate the materials to the 
    students of the schools.
        (B)(i) In the case of any health professional whose period of 
    obligated service under the Loan Repayment Program is nearing 
    completion, the Secretary shall encourage the individual to remain 
    in a health professional shortage area and to continue providing 
    primary health services.
        (ii) During the period in which a health professional is 
    planning and making the transition to private practice from 
    obligated service under the Loan Repayment Program, the Secretary 
    may provide assistance to the professional regarding such transition 
    if the professional is remaining in a health professional shortage 
    area and is continuing to provide primary health services.
        (C) In the case of entities to which participants in the Loan 
    Repayment Program are assigned under section 254f of this title, the 
    Secretary shall encourage the entities to provide options with 
    respect to assisting the participants in remaining in the health 
    professional shortage areas involved, and in continuing to provide 
    primary health services, after the period of obligated service under 
    the Loan Repayment Program is completed. The options with respect to 
    which the Secretary provides such encouragement may include options 
    regarding the sharing of a single employment position in the health 
    professions by 2 or more health professionals, and options regarding 
    the recruitment of couples where both of the individuals are health 
    professionals.

(d) Factors considered in providing contracts; priorities

    (1) Subject to section 254f-1 of this title, in providing contracts 
under the Loan Repayment Program--
        (A) the Secretary shall consider the extent of the demonstrated 
    interest of the applicants for the contracts in providing primary 
    health services; and
        (B) may consider such other factors regarding the applicants as 
    the Secretary determines to be relevant to selecting qualified 
    individuals to participate in such Program.

    (2) In providing contracts under the Loan Repayment Program, the 
Secretary shall give priority--
        (A) to any application for such a contract submitted by an 
    individual whose training is in a health profession or specialty 
    determined by the Secretary to be needed by the Corps;
        (B) to any application for such a contract submitted by an 
    individual who has (and whose spouse, if any, has) characteristics 
    that increase the probability that the individual will continue to 
    serve in a health professional shortage area after the period of 
    obligated service pursuant to subsection (f) of this section is 
    completed; and
        (C) subject to subparagraph (B), to any application for such a 
    contract submitted by an individual who is from a disadvantaged 
    background.

(e) Approval required for participation

                           (1) In general

        An individual becomes a participant in the Loan Repayment 
    Program only upon the Secretary and the individual entering into a 
    written contract described in subsection (f) of this section.

    (2) Repealed. Pub. L. 101-597, title II, Sec. 202(b)(2)(B), 
                        Nov. 16, 1990, 104 Stat. 3024

(f) Contents of contracts

    The written contract (referred to in this subpart) between the 
Secretary and an individual shall contain--
        (1) an agreement that--
            (A) subject to paragraph (3), the Secretary agrees--
                (i) to pay on behalf of the individual loans in 
            accordance with subsection (g) of this section; and
                (ii) to accept (subject to the availability of 
            appropriated funds for carrying out sections 254d through 
            254h of this title and section 254j of this title) the 
            individual into the Corps (or for equivalent service as 
            otherwise provided in this subpart); and

            (B) subject to paragraph (3), the individual agrees--
                (i) to accept loan payments on behalf of the individual;
                (ii) in the case of an individual described in 
            subsection (b)(1)(C) of this section, to maintain enrollment 
            in a course of study or training described in such 
            subsection until the individual completes the course of 
            study or training;
                (iii) in the case of an individual described in 
            subsection (b)(1)(C) of this section, while enrolled in such 
            course of study or training, to maintain an acceptable level 
            of academic standing (as determined under regulations of the 
            Secretary by the educational institution offering such 
            course of study or training); and
                (iv) to serve for a time period (hereinafter in this 
            subpart referred to as the ``period of obligated service'') 
            equal to 2 years or such longer period as the individual may 
            agree to, as a provider of primary health services in a 
            health professional shortage area (designated under section 
            254e of this title) to which such individual is assigned by 
            the Secretary as a member of the Corps or released under 
            section 254n of this title;

        (2) a provision permitting the Secretary to extend for such 
    longer additional periods, as the individual may agree to, the 
    period of obligated service agreed to by the individual under 
    paragraph (1)(B)(iv), including extensions resulting in an aggregate 
    period of obligated service in excess of 4 years;
        (3) a provision that any financial obligation of the United 
    States arising out of a contract entered into under this subpart and 
    any obligation of the individual that is conditioned thereon, is 
    contingent on funds being appropriated for loan repayments under 
    this subpart and to carry out the purposes of sections 254d through 
    254h of this title and sections 254j and 254k of this title;
        (4) a statement of the damages to which the United States is 
    entitled, under section 254o of this title for the individual's 
    breach of the contract; and
        (5) such other statements of the rights and liabilities of the 
    Secretary and of the individual, not inconsistent with this subpart.

(g) Payments

                           (1) In general

        A loan repayment provided for an individual under a written 
    contract under the Loan Repayment Program shall consist of payment, 
    in accordance with paragraph (2), on behalf of the individual of the 
    principal, interest, and related expenses on government and 
    commercial loans received by the individual regarding the 
    undergraduate or graduate education of the individual (or both), 
    which loans were made for--
            (A) tuition expenses;
            (B) all other reasonable educational expenses, including 
        fees, books, and laboratory expenses, incurred by the 
        individual; or
            (C) reasonable living expenses as determined by the 
        Secretary.

                    (2) Payments for years served

        (A) In general

            For each year of obligated service that an individual 
        contracts to serve under subsection (f) of this section the 
        Secretary may pay up to $35,000 on behalf of the individual for 
        loans described in paragraph (1). In making a determination of 
        the amount to pay for a year of such service by an individual, 
        the Secretary shall consider the extent to which each such 
        determination--
                (i) affects the ability of the Secretary to maximize the 
            number of contracts that can be provided under the Loan 
            Repayment Program from the amounts appropriated for such 
            contracts;
                (ii) provides an incentive to serve in health 
            professional shortage areas with the greatest such 
            shortages; and
                (iii) provides an incentive with respect to the health 
            professional involved remaining in a health professional 
            shortage area, and continuing to provide primary health 
            services, after the completion of the period of obligated 
            service under the Loan Repayment Program.

        (B) Repayment schedule

            Any arrangement made by the Secretary for the making of loan 
        repayments in accordance with this subsection shall provide that 
        any repayments for a year of obligated service shall be made no 
        later than the end of the fiscal year in which the individual 
        completes such year of service.

                          (3) Tax liability

        For the purpose of providing reimbursements for tax liability 
    resulting from payments under paragraph (2) on behalf of an 
    individual--
            (A) the Secretary shall, in addition to such payments, make 
        payments to the individual in an amount equal to 39 percent of 
        the total amount of loan repayments made for the taxable year 
        involved; and
            (B) may make such additional payments as the Secretary 
        determines to be appropriate with respect to such purpose.

                        (4) Payment schedule

        The Secretary may enter into an agreement with the holder of any 
    loan for which payments are made under the Loan Repayment Program to 
    establish a schedule for the making of such payments.

(h) Employment ceiling

    Notwithstanding any other provision of law, individuals who have 
entered into written contracts with the Secretary under this section, 
while undergoing academic or other training, shall not be counted 
against any employment ceiling affecting the Department.

(i) Reports

    Not later than March 1 of each year, the Secretary shall submit to 
the Congress a report providing, with respect to the preceding fiscal 
year--
        (1) the total amount of loan payments made under the Loan 
    Repayment Program;
        (2) the number of applications filed under this section;
        (3) the number, and type of health profession training, of 
    individuals receiving loan repayments under such Program;
        (4) the educational institution at which such individuals 
    received their training;
        (5) the total amount of the indebtedness of such individuals for 
    educational loans as of the date on which the individuals become 
    participants in such Program;
        (6) the number of years of obligated service specified for such 
    individuals in the initial contracts under subsection (f) of this 
    section, and, in the case of individuals whose period of such 
    service has been completed, the total number of years for which the 
    individuals served in the Corps (including any extensions made for 
    purposes of paragraph (2) of such subsection);
        (7)(A) the number, and type of health professions training, of 
    such individuals who have breached the contract under subsection (f) 
    of this section through any of the actions specified in subsection 
    (a) or (b) of section 254o of this title; and
        (B) with respect to such individuals--
            (i) the educational institutions with respect to which 
        payments have been made or were to be made under the contract;
            (ii) the amounts for which the individuals are liable to the 
        United States under section 254o of this title;
            (iii) the extent of payment by the individuals of such 
        amounts; and
            (iv) if known, the basis for the decision of the individuals 
        to breach the contract under subsection (f) of this section; and

        (8) the effectiveness of the Secretary in recruiting health 
    professionals to participate in the Loan Repayment Program, and in 
    encouraging and assisting such professionals with respect to 
    providing primary health services to health professional shortage 
    areas after the completion of the period of obligated service under 
    such Program.

(July 1, 1944, ch. 373, title III, Sec. 338B, as added Pub. L. 100-177, 
title II, Sec. 201(3), Dec. 1, 1987, 101 Stat. 992; amended Pub. L. 100-
607, title VI, Sec. 629(a)(2), Nov. 4, 1988, 102 Stat. 3146; Pub. L. 
101-597, title II, Sec. 202(a)-(g)(1), (h), title IV, Sec. 401(b)[(a)], 
Nov. 16, 1990, 104 Stat. 3023-3026, 3035; Pub. L. 105-392, title I, 
Sec. 109, Nov. 13, 1998, 112 Stat. 3562.)


                            Prior Provisions

    A prior section 338B of act July 1, 1944, was renumbered section 
338C by section 201(2) of Pub. L. 100-177 and is classified to section 
254m of this title.


                               Amendments

    1998--Subsec. (b)(1)(B). Pub. L. 105-392 substituted ``behavioral 
and mental health, or other health profession'' for ``or other health 
profession''.
    1990--Subsec. (a). Pub. L. 101-597, Sec. 202(a)(1), substituted 
``Corps Loan Repayment Program to assure, with respect to the provision 
of primary health services pursuant to section 254d(a)(2) of this 
title--'' and pars. (1) and (2) for ``Corps Loan Repayment Program 
(hereinafter in this subpart referred to as the `Loan Repayment 
Program') in order to assure--
        ``(1) an adequate supply of trained physicians, dentists, and 
    nurses for the Corps; and
        ``(2) if needed by the Corps, an adequate supply of podiatrists, 
    optometrists, pharmacists, clinical psychologists, graduates of 
    schools of veterinary medicine, graduates of schools of public 
    health, graduates of programs in health administration, graduates of 
    programs for the training of physician assistants, expanded function 
    dental auxiliaries, and nurse practitioners (as defined in section 
    296m of this title), and other health professionals.''
    Subsec. (b)(1). Pub. L. 101-597, Sec. 202(b)(1)(A), amended par. (1) 
generally. Prior to amendment, par. (1) read as follows:
    ``(A) be enrolled--
        ``(i) as a full-time student--
            ``(I) in an accredited (as determined by the Secretary) 
        educational institution in a State; and
            ``(II) in the final year of a course of study or program, 
        offered by such institution and approved by the Secretary, 
        leading to a degree in medicine, osteopathic medicine, 
        dentistry, or other health profession; or
        ``(ii) in an approved graduate training program in medicine, 
    osteopathic medicine, dentistry, or other health profession; or
    ``(B) have--
        ``(i) a degree in medicine, osteopathic medicine, dentistry, or 
    other health profession;
        ``(ii) completed an approved graduate training program in 
    medicine, osteopathic medicine, dentistry, or other health 
    profession in a State, except that the Secretary may waive the 
    completion requirement of this clause for good cause; and
        ``(iii) a license to practice medicine, osteopathic medicine, 
    dentistry, or other health profession in a State;''.
    Subsec. (b)(2) to (4). Pub. L. 101-597, Sec. 202(b)(2)(A), inserted 
``and'' at end of par. (2), added par. (3), and struck out former pars. 
(3) and (4) which read as follows:
    ``(3) submit an application to participate in the Loan Repayment 
Program; and
    ``(4) sign and submit to the Secretary, at the time of the 
submission of such application, a written contract (described in 
subsection (f) of this section) to accept repayment of educational loans 
and to serve (in accordance with this subpart) for the applicable period 
of obligated service in a health manpower shortage area.''
    Subsec. (c)(4). Pub. L. 101-597, Sec. 401(b)[(a)], substituted 
reference to health professional shortage area for reference to health 
manpower shortage area in subpars. (B) and (C).
    Pub. L. 101-597, Sec. 202(c), added par. (4).
    Subsec. (d). Pub. L. 101-597, Sec. 401(b)[(a)], substituted 
reference to health professional shortage area for reference to health 
manpower shortage area in par. (2)(B).
    Pub. L. 101-597, Sec. 202(d), amended subsec. (d) generally. Prior 
to amendment, subsec. (d) read as follows: ``In determining which 
applications under the Loan Repayment Program to approve (and which 
contracts to accept), the Secretary shall give priority to applications 
made by--
        ``(1) individuals whose training is in a health profession or 
    specialty determined by the Secretary to be needed by the Corps; and
        ``(2) individuals who are committed to service in medically 
    underserved areas.''
    Subsec. (e). Pub. L. 101-597, Sec. 202(b)(2)(B), substituted ``only 
upon the Secretary and the individual entering into a written contract 
described in subsection (f) of this section.'' for ``only on the 
Secretary's approval of the individual's application submitted under 
subsection (b)(3) of this section and the Secretary's acceptance of the 
contract submitted by the individual under subsection (b)(4) of this 
section.'' in par. (1) and struck out par. (2) which read as follows: 
``The Secretary shall provide written notice to an individual promptly 
on--
        ``(A) the Secretary's approving, under paragraph (1), of the 
    individual's participation in the Loan Repayment Program; or
        ``(B) the Secretary's disapproving an individual's participation 
    in such Program.''
    Subsec. (f)(1)(B)(ii), (iii). Pub. L. 101-597, Sec. 202(b)(1)(B), 
substituted ``subsection (b)(1)(C)'' for ``subsection (b)(1)(A)''.
    Subsec. (f)(1)(B)(iv). Pub. L. 101-597, Sec. 401(b)[(a)], 
substituted reference to health professional shortage area for reference 
to health manpower shortage area.
    Pub. L. 101-597, Sec. 202(a)(2), inserted ``as a provider of primary 
health services'' before ``in a health''.
    Subsec. (f)(2). Pub. L. 101-597, Sec. 202(e), inserted before 
semicolon at end ``, including extensions resulting in an aggregate 
period of obligated service in excess of 4 years''.
    Subsec. (g)(1). Pub. L. 101-597, Sec. 202(f)(1), inserted 
``regarding the undergraduate or graduate education of the individual 
(or both), which loans were made'' after ``loans received by the 
individual''.
    Subsec. (g)(2)(A). Pub. L. 101-597, Sec. 401(b)[(a)], substituted 
reference to health professional shortage area for reference to health 
manpower shortage area in cls. (ii) and (iii).
    Pub. L. 101-597, Sec. 202(f)(2)(A), substituted ``For each year'' 
for ``Except as provided in subparagraph (B) and paragraph (3), for each 
year'' and ``$35,000'' for ``$20,000'', inserted at end ``In making a 
determination of the amount to pay for a year of such service by an 
individual, the Secretary shall consider the extent to which each such 
determination--'', and added immediately thereafter cls. (i) to (iii).
    Subsec. (g)(2)(B), (C). Pub. L. 101-597, Sec. 202(f)(2)(B), 
redesignated subpar. (C) as (B) and struck out former subpar. (B) which 
read as follows: ``For each year of obligated service that an individual 
contracts under subsection (f) of this section to serve in the Indian 
Health Service, or to serve in a health program or facility operated by 
a tribe or tribal organization under the Indian Self-Determination Act 
(25 U.S.C. 450f et seq.), the Secretary may pay up to $25,000 on behalf 
of the individual for loans described in paragraph (1).''
    Subsec. (g)(3). Pub. L. 101-597, Sec. 202(g)(1), amended par. (3) 
generally. Prior to amendment, par. (3) read as follows: ``In addition 
to payments made under paragraph (2), in any case in which payments on 
behalf of an individual under the Loan Repayment Program result in an 
increase in Federal, State, or local income tax liability for such 
individual, the Secretary may, on the request of such individual, make 
payments to such individual in a reasonable amount, as determined by the 
Secretary, to reimburse such individual for all or part of the increased 
tax liability of the individual.''
    Subsec. (i). Pub. L. 101-597, Sec. 401(b)[(a)], substituted 
reference to health professional shortage area for reference to health 
manpower shortage area in par. (8).
    Pub. L. 101-597, Sec. 202(h), amended subsec. (i) generally. Prior 
to amendment, subsec. (i) read as follows: ``The Secretary shall, not 
later than March 1 of each year, submit to the Congress a report 
specifying--
        ``(1) the number, and type of health profession training, of 
    individuals receiving loan payments under the Loan Repayment 
    Program;
        ``(2) the educational institution at which such individuals are 
    receiving their training;
        ``(3) the number of applications filed under this section in the 
    school year beginning in such year and in prior school years; and
        ``(4) the amount of loan payments made in the year reported 
    on.''
    1988--Subsec. (b)(1). Pub. L. 100-607 substituted ``osteopathic 
medicine'' for ``osteopathy'' wherever appearing.


                    Effective Date of 1990 Amendment

    Section 202(g)(2) of Pub. L. 101-597 provided that: ``The amendment 
made by paragraph (1) [amending this section] shall apply only with 
respect to contracts under section 338B of the Public Health Service Act 
[this section] (relating to service in the National Health Service 
Corps) that are entered into on or after the effective date of this Act 
[Nov. 16, 1990].''


                               Regulations

    Section 205 of title II of Pub. L. 100-177 provided that: ``Not 
later than 180 days after the effective date of the amendments made by 
this title [Dec. 21, 1987], the Secretary of Health and Human Services 
shall issue regulations for the loan repayment programs established by 
the amendments [enacting this section and sections 254q and 254q-1 of 
this title, amending sections 242a, 254d, 254g, 254h-1, and 254o of this 
title, and repealing former section 254q of this title].''

                  Section Referred to in Other Sections

    This section is referred to in sections 254d, 254h-1, 254m, 254n, 
254o, 254o-1, 254q-1, 288-2, 288-4, 288-5 of this title; title 25 
section 1616a.
