
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: 42USC292q]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 6A--PUBLIC HEALTH SERVICE
 
               SUBCHAPTER V--HEALTH PROFESSIONS EDUCATION
 
                          Part A--Student Loans
 
           subpart ii--federally-supported student loan funds
 
Sec. 292q. Agreements for operation of school loan funds


(a) Fund agreements

    The Secretary 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, 
osteopathic medicine, dentistry, pharmacy, podiatric medicine, 
optometry, or veterinary medicine.

(b) Requirements

    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 to the fund;
            (B) an amount equal to not less than one-ninth of such 
        Federal capital contributions, contributed by such institution;
            (C) collections of principal and interest on loans made from 
        the fund;
            (D) collections pursuant to section 292r(j) of this title; 
        and
            (E) 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 funds 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 pharmacy or an 
    equivalent degree, doctor of podiatric medicine or an equivalent 
    degree, doctor of optometry or an equivalent degree, or doctor of 
    veterinary medicine or an equivalent degree;
        (5) provide that the school shall advise, in writing, each 
    applicant for a loan from the student loan fund of the provisions of 
    section 292r of this title under which outstanding loans from the 
    student loan fund may be paid (in whole or in part) by the 
    Secretary; and
        (6) contain such other provisions as are necessary to protect 
    the financial interests of the United States.

(c) Failure of school to collect loans

                           (1) In general

        Any standard established by the Secretary by regulation for the 
    collection by schools of medicine, osteopathic medicine, dentistry, 
    pharmacy, podiatric medicine, optometry, or veterinary medicine of 
    loans made pursuant to loan agreements under this subpart shall 
    provide that the failure of any such school to collect such loans 
    shall be measured in accordance with this subsection. This 
    subsection may not be construed to require such schools to reimburse 
    the student loan fund under this subpart for loans that became 
    uncollectible prior to August 1985 or to penalize such schools with 
    respect to such loans.

                        (2) Extent of failure

        The measurement of a school's failure to collect loans made 
    under this subpart shall be the ratio (stated as a percentage) that 
    the defaulted principal amount outstanding of such school bears to 
    the matured loans of such school.

                           (3) Definitions

        For purposes of this subsection:
            (A) The term ``default'' means the failure of a borrower of 
        a loan made under this subpart to--
                (i) make an installment payment when due; or
                (ii) comply with any other term of the promissory note 
            for such loan,

        except that a loan made under this subpart shall not be 
        considered to be in default if the loan is discharged in 
        bankruptcy or if the school reasonably concludes from written 
        contracts with the borrower that the borrower intends to repay 
        the loan.
            (B) The term ``defaulted principal amount outstanding'' 
        means the total amount borrowed from the loan fund of a school 
        that has reached the repayment stage (minus any principal amount 
        repaid or canceled) on loans--
                (i) repayable monthly and in default for at least 120 
            days; and
                (ii) repayable less frequently than monthly and in 
            default for at least 180 days;

            (C) The term ``grace period'' means the period of one year 
        beginning on the date on which the borrower ceases to pursue a 
        full-time course of study at a school of medicine, osteopathic 
        medicine, dentistry, pharmacy, podiatric medicine, optometry, or 
        veterinary medicine; and
            (D) The term ``matured loans'' means the total principal 
        amount of all loans made by a school under this subpart minus 
        the total principal amount of loans made by such school to 
        students who are--
                (i) enrolled in a full-time course of study at such 
            school; or
                (ii) in their grace period.

(July 1, 1944, ch. 373, title VII, Sec. 721, as added Pub. L. 102-408, 
title I, Sec. 102, Oct. 13, 1992, 106 Stat. 2011.)


                            Prior Provisions

    A prior section 721 of act July 1, 1944, was classified to section 
293a of this title prior to the general revision of this subchapter by 
Pub. L. 102-408.

                  Section Referred to in Other Sections

    This section is referred to in sections 292r, 292s, 292t, 292v, 
292x, 292y, 295o-1 of this title.
