
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: 42USC292d]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 6A--PUBLIC HEALTH SERVICE
 
               SUBCHAPTER V--HEALTH PROFESSIONS EDUCATION
 
                          Part A--Student Loans
 
    subpart i--insured health education assistance loans to graduate 
                                students
 
Sec. 292d. Eligibility of borrowers and terms of insured loans


(a) In general

    A loan by an eligible lender shall be insurable by the Secretary 
under the provisions of this subpart only if--
        (1) made to--
            (A) a student who--
                (i)(I) has been accepted for enrollment at an eligible 
            institution, or (II) in the case of a student attending an 
            eligible institution, is in good standing at that 
            institution, as determined by the institution;
                (ii) is or will be a full-time student at the eligible 
            institution;
                (iii) has agreed that all funds received under such loan 
            shall be used solely for tuition, other reasonable 
            educational expenses, including fees, books, and laboratory 
            expenses, and reasonable living expenses, incurred by such 
            students;
                (iv) if required under section 453 of title 50, 
            Appendix, to present himself for and submit to registration 
            under such section, has presented himself and submitted to 
            registration under such section; and
                (v) in the case of a pharmacy student, has 
            satisfactorily completed three years of training; or

            (B) an individual who--
                (i) has previously had a loan insured under this subpart 
            when the individual was a full-time student at an eligible 
            institution;
                (ii) is in a period during which, pursuant to paragraph 
            (2), the principal amount of such previous loan need not be 
            paid;
                (iii) has agreed that all funds received under the 
            proposed loan shall be used solely for repayment of interest 
            due on previous loans made under this subpart; and
                (iv) if required under section 453 of title 50, 
            Appendix, to present himself for and submit to registration 
            under such section, has presented himself and submitted to 
            registration under such section;

        (2) evidenced by a note or other written agreement which--
            (A) is made without security and without endorsement, except 
        that if the borrower is a minor and such note or other written 
        agreement executed by him would not, under the applicable law, 
        create a binding obligation, an endorsement may be required;
            (B) provides for repayment of the principal amount of the 
        loan in installments over a period of not less than 10 years 
        (unless sooner repaid) nor more than 25 years beginning not 
        earlier than 9 months nor later than 12 months after the date 
        of--
                (i) the date on which--
                    (I) the borrower ceases to be a participant in an 
                accredited internship or residency program of not more 
                than four years in duration;
                    (II) the borrower completes the fourth year of an 
                accredited internship or residency program of more than 
                four years in duration; or
                    (III) the borrower, if not a participant in a 
                program described in subclause (I) or (II), ceases to 
                carry, at an eligible institution, the normal full-time 
                academic workload as determined by the institution; or

                (ii) the date on which a borrower who is a graduate of 
            an eligible institution ceases to be a participant in a 
            fellowship training program not in excess of two years or a 
            participant in a full-time educational activity not in 
            excess of two years, which--
                    (I) is directly related to the health profession for 
                which the borrower prepared at an eligible institution, 
                as determined by the Secretary; and
                    (II) may be engaged in by the borrower during such a 
                two-year period which begins within twelve months after 
                the completion of the borrower's participation in a 
                program described in subclause (I) or (II) of clause (i) 
                or prior to the completion of the borrower's 
                participation in such program,

        except as provided in subparagraph (C), except that the period 
        of the loan may not exceed 33 years from the date of execution 
        of the note or written agreement evidencing it, and except that 
        the note or other written instrument may contain such provisions 
        relating to repayment in the event of default in the payment of 
        interest or in the payment of the costs of insurance premiums, 
        or other default by the borrower, as may be authorized by 
        regulations of the Secretary in effect at the time the loan is 
        made;
            (C) provides that periodic installments of principal and 
        interest need not be paid, but interest shall accrue, during any 
        period (i) during which the borrower is pursuing a full-time 
        course of study at an eligible institution (or at an institution 
        defined by section 1002(a) of title 20); (ii) not in excess of 
        four years during which the borrower is a participant in an 
        accredited internship or residency program (including any period 
        in such a program described in subclause (I) or subclause (II) 
        of subparagraph (B)(i)); (iii) not in excess of three years, 
        during which the borrower is a member of the Armed Forces of the 
        United States; (iv) not in excess of three years during which 
        the borrower is in service as a volunteer under the Peace Corps 
        Act [22 U.S.C. 2501 et seq.]; (v) not in excess of three years 
        during which the borrower is a member of the National Health 
        Service Corps; (vi) not in excess of three years during which 
        the borrower is in service as a full-time volunteer under title 
        I of the Domestic Volunteer Service Act of 1973 [42 U.S.C. 4951 
        et seq.]; (vii) not in excess of 3 years, for a borrower who has 
        completed an accredited internship or residency training program 
        in osteopathic general practice, family medicine, general 
        internal medicine, preventive medicine, or general pediatrics 
        and who is practicing primary care; (viii) not in excess of 1 
        year, for borrowers who are graduates of schools of 
        chiropractic; (ix) any period not in excess of two years which 
        is described in subparagraph (B)(ii); (x) not in excess of three 
        years, during which the borrower is providing health care 
        services to Indians through an Indian health program (as defined 
        in section 1616a(a)(2)(A) of title 25; \1\ and (xi) in addition 
        to all other deferments for which the borrower is eligible under 
        clauses (i) through (x), any period during which the borrower is 
        a member of the Armed Forces on active duty during the Persian 
        Gulf conflict, and any period described in clauses (i) through 
        (xi) shall not be included in determining the 25-year period 
        described in subparagraph (B);
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    \1\ So in original. Probably should be preceded by a closing 
parenthesis.
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            (D) provides for interest on the unpaid principal balance of 
        the loan at a yearly rate, not exceeding the applicable maximum 
        rate prescribed and defined by the Secretary (within the limits 
        set forth in subsection (b) of this section) on a national, 
        regional, or other appropriate basis, which interest shall be 
        compounded not more frequently than annually and payable in 
        installments over the period of the loan except as provided in 
        subparagraph (C), except that the note or other written 
        agreement may provide that payment of any interest may be 
        deferred until not later than the date upon which repayment of 
        the first installment of principal falls due or the date 
        repayment of principal is required to resume (whichever is 
        applicable) and may further provide that, on such date, the 
        amount of the interest which has so accrued may be added to the 
        principal for the purposes of calculating a repayment schedule;
            (E) offers, in accordance with criteria prescribed by 
        regulation by the Secretary, a schedule for repayment of 
        principal and interest under which payment of a portion of the 
        principal and interest otherwise payable at the beginning of the 
        repayment period (as defined in such regulations) is deferred 
        until a later time in the period;
            (F) entitles the borrower to accelerate without penalty 
        repayment of the whole or any part of the loan;
            (G) provides that the check for the proceeds of the loan 
        shall be made payable jointly to the borrower and the eligible 
        institution in which the borrower is enrolled; and
            (H) contains such other terms and conditions consistent with 
        the provisions of this subpart and with the regulations issued 
        by the Secretary pursuant to this subpart, as may be agreed upon 
        by the parties to such loan, including, if agreed upon, a 
        provision requiring the borrower to pay to the lender, in 
        addition to principal and interest, amounts equal to the 
        insurance premiums payable by the lender to the Secretary with 
        respect to such loan; and

        (3) subject to the consent of the student and subject to 
    applicable law, the eligible lender has obtained from the student 
    appropriate demographic information regarding the student, including 
    racial or ethnic background.

(b) Limitation on rate of interest

    The rate of interest prescribed and defined by the Secretary for the 
purpose of subsection (a)(2)(D) of this section may not exceed the 
average of the bond equivalent rates of the 91-day Treasury bills 
auctioned for the previous quarter plus 3 percentage points, rounded to 
the next higher one-eighth of 1 percent.

(c) Minimum annual payment by borrower

    The total of the payments by a borrower during any year or any 
repayment period with respect to the aggregate amount of all loans to 
that borrower which are insured under this subpart shall not be less 
than the annual interest on the outstanding principal, except as 
provided in subsection (a)(2)(C) of this section, unless the borrower, 
in the written agreement described in subsection (a)(2) of this section, 
agrees to make payments during any year or any repayment period in a 
lesser amount.

(d) Applicability of certain laws on rate or amount of interest

    No provision of any law of the United States (other than subsections 
(a)(2)(D) and (b) of this section) or of any State that limits the rate 
or amount of interest payable on loans shall apply to a loan insured 
under this subpart.

(e) Determination regarding forbearance

    Any period of time granted to a borrower under this subpart in the 
form of forbearance on the loan shall not be included in the 25-year 
total loan repayment period under subsection (a)(2)(C) of this section.

(f) Loan repayment schedule

    Lenders and holders under this subpart shall offer borrowers 
graduated loan repayment schedules that, during the first 5 years of 
loan repayment, are based on the borrower's debt-to-income ratio.

(g) Rule of construction regarding determination of need of students

    With respect to any determination of the financial need of a student 
for a loan covered by Federal loan insurance under this subpart, this 
subpart may not be construed to limit the authority of any school to 
make such allowances for students with special circumstances as the 
school determines appropriate.

(h) Definitions

    For purposes of this section:
        (1) The term ``active duty'' has the meaning given such term in 
    section 101(18) of title 37, except that such term does not include 
    active duty for training.
        (2) The term ``Persian Gulf conflict'' means the period 
    beginning on August 2, 1990, and ending on the date thereafter 
    prescribed by Presidential proclamation or by law.

(July 1, 1944, ch. 373, title VII, Sec. 705, as added Pub. L. 102-408, 
title I, Sec. 102, Oct. 13, 1992, 106 Stat. 1996; amended Pub. L. 103-
43, title XX, Sec. 2014(a)(1), June 10, 1993, 107 Stat. 215; Pub. L. 
105-244, title I, Sec. 102(a)(13)(A), Oct. 7, 1998, 112 Stat. 1620; Pub. 
L. 105-392, title I, Sec. 141(a)(1), (2), Nov. 13, 1998, 112 Stat. 
3578.)

                       References in Text

    The Peace Corps Act, referred to in subsec. (a)(2)(C), is Pub. L. 
87-293, Sept. 22, 1961, 75 Stat. 612, as amended, which is classified 
principally to chapter 34 (Sec. 2501 et seq.) of Title 22, Foreign 
Relations and Intercourse. For complete classification of this Act to 
the Code, see Short Title note set out under section 2501 of Title 22 
and Tables.
    The Domestic Volunteer Service Act of 1973, referred to in subsec. 
(a)(2)(C), is Pub. L. 93-113, Oct. 1, 1973, 87 Stat. 394, as amended. 
Title I of the Act is classified generally to subchapter I (Sec. 4951 et 
seq.) of chapter 66 of this title. For complete classification of this 
Act to the Code, see Short Title note set out under section 4951 of this 
title and Tables.


                            Prior Provisions

    A prior section 292d, act July 1, 1944, ch. 373, title VII, 
Sec. 704, formerly Sec. 799A, as added Nov. 2, 1970, Pub. L. 91-519, 
title II, Sec. 207, 84 Stat. 1355; amended Nov. 18, 1971, Pub. L. 92-
157, title I, Sec. 110(2), 85 Stat. 461; July 12, 1974, Pub. L. 93-348, 
title I, Sec. 105, 88 Stat. 347; renumbered Sec. 704, Oct. 12, 1976, 
Pub. L. 94-484, title II, Sec. 201(c), 90 Stat. 2247; Nov. 4, 1988, Pub. 
L. 100-607, title VI, Secs. 620(c), 628(3), 629(b)(2), 102 Stat. 3141, 
3145, 3146, prohibited discrimination on the basis of sex, prior to the 
general revision of this subchapter by Pub. L. 102-408. See section 295m 
of this title.
    Another prior section 292d, act July 1, 1944, ch. 373, title VII, 
Sec. 705, as added July 30, 1956, ch. 779, Sec. 2, 70 Stat. 718; amended 
Aug. 27, 1958, Pub. L. 85-777, Sec. 1(b), 72 Stat. 933; Oct. 5, 1961, 
Pub. L. 87-395, Sec. 8(b), (d), 75 Stat. 827; Oct. 17, 1962, Pub. L. 87-
838, Sec. 4(b), 76 Stat. 1074; Sept. 24, 1963, Pub. L. 88-129, 
Secs. 2(a), 3(a), 77 Stat. 164, 173; Aug. 9, 1965, Pub. L. 89-115, 
Sec. 2(b), 79 Stat. 448; Aug. 16, 1968, Pub. L. 90-490, title IV, 
Sec. 401(b), 82 Stat. 789; Nov. 18, 1971, Pub. L. 92-157, title I, 
Sec. 102(k)(1), (2)(A), 85 Stat. 437, related to applications for grants 
for construction of health research facilities, providing for time of 
filing, eligibility, recommendation and approval and requirement of 
findings, conditional approval, and matters considered, prior to repeal 
by Pub. L. 94-484, title II, Sec. 201(a), Oct. 12, 1976, 90 Stat. 2246.
    A prior section 705 of act July 1, 1944, was classified to section 
292e of this title prior to the general revision of this subchapter by 
Pub. L. 102-408.


                               Amendments

    1998--Subsec. (a)(2)(C). Pub. L. 105-392 added cl. (x), redesignated 
former cl. (x) as (xi) and substituted ``(x)'' for ``(ix)'', and 
substituted ``(xi)'' for ``(x)'' in concluding provisions.
    Pub. L. 105-244 substituted ``section 1002(a)'' for ``section 
1088(a)'' in cl. (i).
    1993--Subsec. (a)(2)(H), (I). Pub. L. 103-43 redesignated subpar. 
(I) as (H) and struck out former subpar. (H) which read as follows: 
``notwithstanding the provisions of the Fair Debt Collection Practices 
Act, authorizes an institution or postgraduate training program attended 
by the borrower to assist in the collection of any loan that becomes 
delinquent, including providing information concerning the borrower to 
the Secretary and to past and present lenders and holders of the 
borrower's loans; and''.


                    Effective Date of 1998 Amendments

    Pub. L. 105-392, title I, Sec. 141(a)(3), Nov. 13, 1998, 112 Stat. 
3578, provided that: ``The amendments made by this subsection [amending 
this section] shall apply with respect to services provided on or after 
the first day of the third month that begins after the date of the 
enactment of this Act [Nov. 13, 1998].''
    Amendment by Pub. L. 105-244 effective Oct. 1, 1998, except as 
otherwise provided in Pub. L. 105-244, see section 3 of Pub. L. 105-244, 
set out as a note under section 1001 of Title 20, Education.

                  Section Referred to in Other Sections

    This section is referred to in sections 238n, 292a, 292e, 292n, 292o 
of this title.
