
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: 42USC297a]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 6A--PUBLIC HEALTH SERVICE
 
              SUBCHAPTER VI--NURSING WORKFORCE DEVELOPMENT
 
                          Part E--Student Loans
 
Sec. 297a. Student loan fund


(a) Agreements to establish and operate fund authorized

    The Secretary is authorized to enter into an agreement for the 
establishment and operation of a student loan fund in accordance with 
this subpart \1\ with any public or nonprofit private school of nursing 
which is located in a State.
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    \1\ See References in Text note below.
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(b) Provisions of agreements

    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, except as provided in 
    section 297h of this title, of (A) the Federal capital contributions 
    paid from allotments under section 297d of this title to the school 
    by the Secretary, (B) an additional amount from other sources equal 
    to not less than one-ninth of such Federal capital contributions, 
    (C) collections of principal and interest on loans made from the 
    fund, (D) collections pursuant to section 297b(f) of this title, and 
    (E) any other earnings of the fund;
        (3) provide that the fund, except as provided in section 297h of 
    this title, 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 fulltime or half-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;
        (5) contain such other provisions as are necessary to protect 
    the financial interests of the United States.

(c) Regulatory standards applicable to collection of loans

    (1) Any standard established by the Secretary by regulation for the 
collection by schools of nursing of loans made pursuant to loan 
agreements under this subpart \1\ shall provide that the failure of any 
such school to collect such loans shall be measured in accordance with 
this subsection. With respect to the student loan fund established 
pursuant to such agreements, this subsection may not be construed to 
require such schools to reimburse such loan fund for loans that became 
uncollectable prior to 1983.
    (2) The measurement of a school's failure to collect loans made 
under this subpart \1\ 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) 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 contacts 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 
    cancelled) 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 nine months 
    beginning on the date on which the borrower ceases to pursue a full-
    time or half-time course of study at a school of nursing; and
        (D) the term ``matured loans'' means the total principal amount 
    of all loans made by a school of nursing under this subpart minus 
    the total principal amount of loans made by such school to students 
    who are--
            (i) enrolled in a full-time or half-time course of study at 
        such school; or
            (ii) in their grace period.

(July 1, 1944, ch. 373, title VIII, Sec. 835, formerly Sec. 822, as 
added Pub. L. 88-581, Sec. 2, Sept. 4, 1964, 78 Stat. 913; amended Pub. 
L. 90-490, title II, Sec. 222(a), (c)(2), Aug. 16, 1968, 82 Stat. 783, 
784; Pub. L. 92-158, Sec. 6(d)(3), (e), Nov. 18, 1971, 85 Stat. 478; 
Pub. L. 93-385, Sec. 3(b), Aug. 23, 1974, 88 Stat. 741; renumbered 
Sec. 835 and amended Pub. L. 94-63, title IX, Secs. 936(a), 941(h)(1)-
(3), (i)(1), (2), July 29, 1975, 89 Stat. 362, 365, 366; Pub. L. 96-76, 
title I, Sec. 109(a), Sept. 29, 1979, 93 Stat. 579; Pub. L. 97-35, title 
XXVII, Sec. 2757(a), Aug. 13, 1981, 95 Stat. 931; Pub. L. 99-92, 
Sec. 8(a), Aug. 16, 1985, 99 Stat. 397; Pub. L. 99-129, title II, 
Sec. 209(j)(2), Oct. 22, 1985, 99 Stat. 536; Pub. L. 100-607, title VII, 
Sec. 713(a), Nov. 4, 1988, 102 Stat. 3160.)

                       References in Text

    This subpart, referred to in subsecs. (a) and (c), probably should 
be ``this part'', to reflect the redesignation of subpart II of part B 
of this subchapter as part E of this subchapter by Pub. L. 105-392, 
title I, Sec. 123(2), Nov. 13, 1998, 112 Stat. 3562.


                               Amendments

    1988--Subsec. (c)(1). Pub. L. 100-607 inserted provisions relating 
to reimbursement of student loan fund for certain uncollectable loans.
    1985--Subsec. (c). Pub. L. 99-92 added subsec. (c).
    Subsec. (c)(3)(C). Pub. L. 99-129, Sec. 209(j)(2)(A), substituted 
provisions defining ``grace period'' as the period of nine months 
beginning on the date on which the borrower ceases to pursue a full-time 
or half-time course of study at a school of nursing for former 
provisions defining ``grace period'' as the period of one year beginning 
on (i) the date on which the borrower ceased to pursue a full-time or 
half-time course of study at a school of nursing; or (ii) the date on 
which ended any period described in clause (A) or (B) of section 
297b(b)(2) of this title which was applicable to such borrower, 
whichever was later.
    Subsec. (c)(3)(D)(ii). Pub. L. 99-129, Sec. 209(j)(2)(B), struck out 
``first'' before ``grace period.''
    1981--Subsec. (b)(4). Pub. L. 97-35 struck out provisions respecting 
prohibition on loans to students attending school before Oct. 1, 1980.
    1979--Subsec. (b)(4). Pub. L. 96-76 substituted ``1980'' for 
``1978''.
    1975--Subsec. (a). Pub. L. 94-63, Sec. 941(h)(1), (2), substituted 
``subpart'' for ``part'' and struck out ``of Health, Education, and 
Welfare'' after ``Secretary''.
    Subsec. (b). Pub. L. 94-63, Secs. 936(a), 941(h)(3), (i)(2), in cl. 
(2) substituted ``from allotments under section 297d of this title'' for 
``under this part'', in cl. (4) substituted ``October 1, 1978'' for 
``July 1, 1975'', and in cls. (2) and (3) substituted references to 
sections 836 and 841 of the Act for references to sections 823 and 829, 
which had previously been translated as sections 297b and 297h of this 
title, respectively, requiring no further translations in the text as a 
result of the renumbering of the Public Health Service Act.
    1974--Subsec. (b)(4). Pub. L. 93-385 substituted ``1975'' for 
``1974''.
    1971--Subsec. (b)(4). Pub. L. 92-158 substituted ``full-time or 
half-time course of study'' for ``full-time course of study'' and 
``1974'' for ``1971''.
    1968--Subsec. (b)(2). Pub. L. 90-490, Sec. 222(a)(1), (c)(2), 
inserted ``, except as provided in section 297h of this title,'' after 
``fund'' where first appearing and added cl. (D) and redesignated former 
cl. (D) as (E), respectively.
    Subsec. (b)(3). Pub. L. 90-490, Sec. 222(a)(1), inserted ``, except 
as provided in section 297h of this title'' after ``fund'' where first 
appearing and authorized the cancellation of an additional 50 per centum 
of a nursery student loan.
    Subsec. (b)(4). Pub. L. 90-490, Sec. 222(a)(2), substituted ``1971'' 
for ``1969''.


                    Effective Date of 1985 Amendments

    Amendment by Pub. L. 99-129 effective June 30, 1984, see section 
228(b)(5) of Pub. L. 99-129, set out as a note under section 254l of 
this title.
    Section 10 of Pub. L. 99-92 provided that:
    ``(a) Except as provided in subsection (b), this Act [enacting 
section 297i of this title, transferring section 296c to section 298b-5 
of this title, amending this section, sections 296k, 296l, 296m, 297, 
297-1, 297b, 297d, 297e, 298, 298b, and 298b-5 of this title, sections 
1332, 1333, 1336, and 1341 of Title 15, Commerce and Trade, and section 
6103 of Title 26, Internal Revenue Code, repealing sections 296 to 296b, 
296d to 296f, 296j, 297h, and 297j of this title, and enacting 
provisions set out as notes under sections 201 and 298b-5 of this title 
and section 1333 of Title 15] and the amendments and repeals made by 
this Act shall take effect on October 1, 1985.
    ``(b)(1) The provisions of section 9(c) of this Act [transferring 
section 296c of this title to section 298b-5 of this title, amending 
section 298b-5 of this title, and enacting provisions set out as notes 
under section 298b-5 of this title] and the amendment made by paragraph 
(1) of such section shall take effect on the date of enactment of this 
Act [Aug. 16, 1985].
    ``(2) The amendment made by section 8(a) of this Act [amending 
section 297a of this title] shall take effect June 30, 1984.''


                    Effective Date of 1975 Amendment

    Section 905 of Pub. L. 94-63 provided that: ``Except as may 
otherwise be specifically provided, the amendments made by this part 
[part B (Secs. 905-937) of title IX of Pub. L. 94-63, enacting sections 
296j to 296m of this title, amending sections 296, 296a, 296d, 296e, 297 
to 297c, 297e, and 297j of this title, repealing sections 296d, 296g, 
296i, 297f, and 298c-7 of this title, and enacting provisions set out as 
notes under sections 296, 296a, 296d, 296e, 296m, 297, 297b, and 297f of 
this title] shall take effect July 1, 1975. The amendments made by this 
part to provisions of title VIII of the Public Health Service Act [this 
subchapter] (hereinafter in this part referred to as the `Act') are made 
to such provisions as amended by part A of this title [amending sections 
296, 296d, 296e, 296g, 296i, 297j, and 298c-7 of this title].''
    Section 942 of Pub. L. 94-63 provided that: ``The amendments made by 
section 941 [enacting section 298b-3 of this title, amending sections 
296a to 296d, 296f, 297a to 297e, 297g to 297k, 298, and 298b of this 
title, and repealing section 298c-8 of this title] shall take effect 
July 1, 1975. Except as otherwise specifically provided, the amendments 
made by section 941 to provisions of title VIII of the Act [this 
subchapter] are made to such provisions as in effect July 1, 1975, and 
as amended by part B of this title [see note set out above].''


                    Effective Date of 1968 Amendment

    Amendment by section 222(c)(2) of Pub. L. 90-490 applicable with 
respect to loans made after June 30, 1969, see section 222(i) of Pub. L. 
90-490, set out as a note under section 297b of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 296e, 297b, 297d, 297e of 
this title.
