42 USC § 297b - Loan provisions

(a) Maximum amount per individual per year; preference to first year students

The total of the loans for any academic year (or its equivalent, as determined under regulations of the Secretary) made by schools of nursing from loan funds established pursuant to agreements under this part may not exceed $3,300 in the case of any student, except that for the final two academic years of the program involved, such total may not exceed $5,200. The aggregate of the loans for all years from such funds may not exceed $17,000 in the case of any student during fiscal years 2010 and 2011. After fiscal year 2011, such amounts shall be adjusted to provide for a cost-of-attendance increase for the yearly loan rate and the aggregate of the loans. In the granting of such loans, a school shall give preference to licensed practical nurses, to persons with exceptional financial need, and to persons who enter as first-year students after enactment of this subchapter.

(b) Terms and conditions

Loans from any such student loan fund by any school shall be made on such terms and conditions as the school may determine; subject, however, to such conditions, limitations, and requirements as the Secretary may prescribe (by regulation or in the agreement with the school) with a view to preventing impairment of the capital of such fund to the maximum extent practicable in the light of the objective of enabling the student to complete his course of study; and except that—

(1) such a loan may be made only to a student who

(A) is in need of the amount of the loan to pursue a full-time 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 a graduate degree in nursing,

(B) is capable, in the opinion of the school, of maintaining good standing in such course of study, and

(C) with respect to any student enrolling in the school after June 30, 2000, is of financial need (as defined in regulations issued by the Secretary);;  ^[1]

(2) such a loan shall be repayable in equal or graduated periodic installments (with the right of the borrower to accelerate repayment) over the ten-year period which begins nine months after the student ceases to pursue a full-time or half-time course of study at a school of nursing, excluding from such 10-year period all

(A) periods (up to three years) of

(i) active duty performed by the borrower as a member of a uniformed service, or

(ii) service as a volunteer under the Peace Corps Act [22 U.S.C. 2501 et seq.],

(B) periods (up to ten years) during which the borrower is pursuing a full-time or half-time course of study at a collegiate school of nursing leading to baccalaureate degree in nursing or an equivalent degree, or to graduate degree in nursing, or is otherwise pursuing advanced professional training in nursing (or training to be a nurse anesthetist), and

(C) such additional periods under the terms of paragraph (8) of this subsection;

(3) in the case of a student who received such a loan before September 29, 1995, an amount up to 85 per centum of any such loan made before such date (plus interest thereon) shall be canceled for full-time employment as a professional nurse (including teaching in any of the fields of nurse training and service as an administrator, supervisor, or consultant in any of the fields of nursing) in any public or nonprofit private agency, institution, or organization (including neighborhood health centers), at the rate of 15 per centum of the amount of such loan (plus interest) unpaid on the first day of such service for each of the first, second, and third complete year of such service, and 20 per centum of such amount (plus interest) for each complete fourth and fifth year of such service;

(4) the liability to repay the unpaid balance of such loan and accrued interest thereon shall be canceled upon the death of the borrower, or if the Secretary determines that he has become permanently and totally disabled;

(5) such a loan shall bear interest on the unpaid balance of the loan, computed only for periods during which the loan is repayable, at the rate of 5 percent per annum;

(6) such a loan shall be made without security or endorsement, except that if the borrower is a minor and the note or other evidence of obligation executed by him would not, under the applicable law, create a binding obligation, either security or endorsement may be required;

(7) no note or other evidence of any such loan may be transferred or assigned by the school making the loan except that, if the borrower transfers to another school participating in the program under this part such note or other evidence of a loan may be transferred to such other school; and

(8) pursuant to uniform criteria established by the Secretary, the repayment period established under paragraph (2) for any student borrower who during the repayment period failed to make consecutive payments and who, during the last 12 months of the repayment period, has made at least 12 consecutive payments may be extended for a period not to exceed 10 years.

(c) Cancellation

Where all or any part of a loan, or interest, is canceled under this section, the Secretary shall pay to the school an amount equal to the school’s proportionate share of the canceled portion, as determined by the Secretary.

(d) Installments

Any loan for any year by a school from a student loan fund established pursuant to an agreement under this part shall be made in such installments as may be provided in regulations of the Secretary or such agreement and, upon notice to the Secretary by the school that any recipient of a loan is failing to maintain satisfactory standing, any or all further installments of his loan shall be withheld, as may be appropriate.

(e) Availability to eligible students in need

An agreement under this part with any school shall include provisions designed to make loans from the student loan fund established thereunder reasonably available (to the extent of the available funds in such fund) to all eligible students in the school in need thereof.

(f) Penalty for late payment

Subject to regulations of the Secretary and in accordance with this section, a school shall assess a charge with respect to a loan from the loan fund established pursuant to an agreement under this part for failure of the borrower to pay all or any part of an installment when it is due and, in the case of a borrower who is entitled to deferment of the loan under subsection (b)(2) of this section or cancellation of part or all of the loan under subsection (b)(3) of this section, for any failure to file timely and satisfactory evidence of such entitlement. No such charge may be made if the payment of such installment or the filing of such evidence is made within 60 days after the date on which such installment or filing is due. The amount of any such charge may not exceed an amount equal to 6 percent of the amount of such installment. The school may elect to add the amount of any such charge to the principal amount of the loan as of the first day after the day on which such installment or evidence was due, or to make the amount of the charge payable to the school not later than the due date of the next installment after receipt by the borrower of notice of the assessment of the charge.

(g) Minimum monthly repayment

A school may provide in accordance with regulations of the Secretary, that during the repayment period of a loan from a loan fund established pursuant to an agreement under this part payments of principal and interest by the borrower with respect to all the outstanding loans made to him from loan funds so established shall be at a rate equal to not less than $40 per month.

(h) Loan cancellation

Notwithstanding the amendment made by section 6(b) of the Nurse Training Act of 1971 to this section—

(A) any person who obtained one or more loans from a loan fund established under this part, who before November 18, 1971, became eligible for cancellation of all or part of such loans (including accrued interest) under this section (as in effect on the day before such date), and who on such date was not engaged in a service for which loan cancellation was authorized under this section (as so in effect), may at any time elect to receive such cancellation in accordance with this subsection (as so in effect); and

(B) in the case of any person who obtained one or more loans from a loan fund established under this part and who on such date was engaged in a service for which cancellation of all or part of such loans (including accrued interest) was authorized under this section (as so in effect), this section (as so in effect) shall continue to apply to such person for purposes of providing such loan cancellation until he terminates such service.

(i) Loan repayment

Upon application by a person who received, and is under an obligation to repay, any loan made to such person as a nursing student, the Secretary may undertake to repay (without liability to the applicant) all or any part of such loan, and any interest or portion thereof outstanding thereon, upon his determination, pursuant to regulations establishing criteria therefor, that the applicant—

(1) failed to complete the nursing studies with respect to which such loan was made;

(2) is in exceptionally needy circumstances; and

(3) has not resumed, or cannot reasonably be expected to resume, such nursing studies within two years following the date upon which the applicant terminated the studies with respect to which such loan was made.

(j) Collection by Secretary of loan in default; preconditions and procedures applicable

The Secretary is authorized to attempt to collect any loan which was made under this part, which is in default, and which was referred to the Secretary by a school of nursing with which the Secretary has an agreement under this part, on behalf of that school under such terms and conditions as the Secretary may prescribe (including reimbursement from the school’s student loan fund for expenses the Secretary may reasonably incur in attempting collection), but only if the school has complied with such requirements as the Secretary may specify by regulation with respect to the collection of loans under this part. A loan so referred shall be treated as a debt subject to section 5514 of title 5. Amounts collected shall be deposited in the school’s student loan fund. Whenever the Secretary desires the institution of a civil action regarding any such loan, the Secretary shall refer the matter to the Attorney General for appropriate action.

(k) Elimination of statute of limitation for loan collections

(1) Purpose

It is the purpose of this subsection to ensure that obligations to repay loans under this section are enforced without regard to any Federal or State statutory, regulatory, or administrative limitation on the period within which debts may be enforced.

(2) Prohibition

Notwithstanding any other provision of Federal or State law, no limitation shall terminate the period within which suit may be filed, a judgment may be enforced, or an offset, garnishment, or other action may be initiated or taken by a school of nursing that has an agreement with the Secretary pursuant to section 297a of this title that is seeking the repayment of the amount due from a borrower on a loan made under this part after the default of the borrower on such loan.

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[1]  So in original.

Source

(July 1, 1944, ch. 373, title VIII, § 836, formerly § 823, as added Pub. L. 88–581, § 2,Sept. 4, 1964, 78 Stat. 914; amended Pub. L. 89–290, § 4(g)(2),Oct. 22, 1965, 79 Stat. 1058; Pub. L. 90–490, title II, § 222(b), (c)(1),Aug. 16, 1968, 82 Stat. 783, 784; Pub. L. 92–158, § 6(a), (b)(1), (e),Nov. 18, 1971, 85 Stat. 475, 476, 478; renumbered § 836 and amended Pub. L. 94–63, title IX, §§ 936(b), 941(h)(1), (2), (5), (i)(1),July 29, 1975, 89 Stat. 363, 365; Pub. L. 96–76, title I, § 112,Sept. 29, 1979, 93 Stat. 580; Pub. L. 97–35, title XXVII, § 2757(b),Aug. 13, 1981, 95 Stat. 931; Pub. L. 99–92, § 8(b)–(d), Aug. 16, 1985, 99 Stat. 398; Pub. L. 100–607, title VII, §§ 713(b)–(g), 714(a)–(c), Nov. 4, 1988, 102 Stat. 3160, 3161; Pub. L. 101–93, § 5(r),Aug. 16, 1989, 103 Stat. 614; Pub. L. 102–408, title II, § 211(a)(1),Oct. 13, 1992, 106 Stat. 2078; Pub. L. 105–392, title I, § 133(a)–(c)(1), Nov. 13, 1998, 112 Stat. 3575; Pub. L. 111–148, title V, §§ 5202, 5310 (b)(2)–(4), Mar. 23, 2010, 124 Stat. 607, 631.)

References in Text

The Peace Corps Act, referred to in subsec. (b)(2), is Pub. L. 87–293, Sept. 22, 1961, 75 Stat. 612, as amended, which is classified principally to chapter 34 (§ 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.

Section 6(b) of the Nurse Training Act of 1971, referred to in subsec. (h), is section 6(b) ofPub. L. 92–158, Nov. 18, 1971, 85 Stat. 477. Section 6 (b)(1) amended subsec. (b)(3) of this section, added former subsec. (h) of this section, and enacted the provisions editorially classified to subsec. (i) [now (h)] of this section. Section 6 (b)(2) enacted section 297i of this title which was transferred and redesignated as subsec. (j) [now (i)] of this section pursuant to section 941(h)(5) ofPub. L. 94–63.

Codification

Provisions of subsec. (h) of this section were, in the original, enacted by section 6(b)(1) ofPub. L. 92–158, without directory language with respect to classification in the Code and were editorially set out as subsec. (i) [now (h)] as the probable intent of Congress.

Amendments

2010—Subsec. (a). Pub. L. 111–148, § 5310(b)(2), substituted “this part” for “this subpart”.

Pub. L. 111–148, § 5202(a), substituted “$3,300” for “$2,500”, “$5,200” for “$4,000”, and “$17,000 in the case of any student during fiscal years 2010 and 2011. After fiscal year 2011, such amounts shall be adjusted to provide for a cost-of-attendance increase for the yearly loan rate and the aggregate of the loans.” for “$13,000 in the case of any student.”

Subsec. (b)(1)(C). Pub. L. 111–148, § 5202(b)(1), substituted “2000” for “1986”.

Subsec. (b)(3). Pub. L. 111–148, § 5202(b)(2), substituted “September 29, 1995” for “September 29, 1979”.

Subsecs. (b)(7), (d) to (g). Pub. L. 111–148, § 5310(b)(2), substituted “this part” for “this subpart”.

Subsec. (h). Pub. L. 111–148, § 5310(b)(3), struck out concluding provisions which read as follows: “Nothing in this subsection shall be construed to prevent any person from entering into an agreement for loan cancellation under subsection (h) of this section (as amended by section 6(b)(2) of the Nurse Training Act of 1971).”

Pub. L. 111–148, § 5310(b)(2), substituted “this part” for “this subpart” in two places.

Subsec. (j). Pub. L. 111–148, § 5310(b)(2), substituted “this part” for “this subpart” wherever appearing.

Subsecs. (k), (l). Pub. L. 111–148, § 5310(b)(4), redesignatedsubsec. (l) as (k).

Subsec. (l)(2). Pub. L. 111–148, § 5310(b)(2), substituted “this part” for “this subpart”.

1998—Subsec. (b)(1). Pub. L. 105–392, § 133(a)(1), substituted semicolon for period at end.

Subsec. (b)(2)(C). Pub. L. 105–392, § 133(a)(2), added subpar. (C).

Subsec. (b)(8). Pub. L. 105–392, § 133(a)(3), (4), added par. (8).

Subsec. (g). Pub. L. 105–392, § 133(b), substituted “$40” for “$15”.

Subsec. (l). Pub. L. 105–392, § 133(c)(1), added subsec. (l).

1992—Subsecs. (h) to (k). Pub. L. 102–408redesignated subsecs. (i) to (k) as (h) to (j), respectively, and struck out former subsec. (h) which provided for a loan repayment program. See section 297n of this title.

1989—Subsec. (h)(6)(C). Pub. L. 101–93substituted “means a skilled nursing facility, as such term is defined in section 1395x (j) of this title, and an intermediate care facility, as such term is defined in section 1396d (c) of this title” for “means an intermediate care facility and a skilled nursing facility, as such terms are defined in subsections (c) and (i), respectively, of section 1396d of this title”.

1988—Subsec. (a). Pub. L. 100–607, § 713(b), (c), inserted in first sentence “, except that for the final two academic years of the program involved, such total may not exceed $4,000”, substituted “$13,000” for “$10,000” in second sentence, and inserted “, to persons with exceptional financial need,” after “nurses” in third sentence.

Subsec. (b)(1)(C). Pub. L. 100–607, § 713(d), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “if a student who will enroll in the school after June 30, 1986, is of exceptional financial need (as defined by regulations of the Secretary)”.

Subsec. (b)(2)(B). Pub. L. 100–607, § 713(e), substituted “ten” for “five” and inserted “or half-time” after “a full-time”.

Subsec. (b)(5). Pub. L. 100–607, § 713(f), substituted “5 percent” for “6 per centum”.

Subsec. (h)(1)(C). Pub. L. 100–607, § 714(a), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “who enters into an agreement with the Secretary to serve as a nurse for a period of at least two years in an area in a State determined by the Secretary, after consultation with the appropriate State health authority (as determined by the Secretary by regulations), to have a shortage of and need for nurses;”.

Subsecs. (h)(5), (6). Pub. L. 100–607, § 714(b), (c), added pars. (5) and (6).

Subsec. (j)(2) to (4). Pub. L. 100–607, § 713(g), redesignated par. (4) as (3) and struck out former par. (3) which related to low-income or disadvantaged family.

1985—Subsec. (b)(1). Pub. L. 99–92, § 8(b), which directed that cl. (C) be inserted before period, was executed by inserting cl. (C) before the semicolon as the probable intent of Congress.

Subsec. (f). Pub. L. 99–92, § 8(c), substituted “the Secretary and in accordance with this section, a school shall” for “the Secretary, a school may”, and substituted provisions relating to charges not allowed in certain cases and allowed where payment is late for provisions relating to maximum amount of late charges.

Subsec. (k). Pub. L. 99–92, § 8(d), added subsec. (k).

1981—Subsec. (b)(5). Pub. L. 97–35substituted “6” for “3”.

1979—Subsec. (b)(3). Pub. L. 96–76inserted provisions requiring conditions to be applicable to loans arising prior to Sept. 29, 1979.

1975—Subsec. (a). Pub. L. 94–63, § 941(h)(1), substituted “subpart” for “part”.

Subsec. (b). Pub. L. 94–63, § 941(h)(2), struck out “of Health, Education, and Welfare” after “Secretary”.

Subsec. (b)(2)(B). Pub. L. 94–63, § 936(b), inserted “(or training to be a nurse anesthetist)” after “professional training in nursing”.

Subsec. (b)(7). Pub. L. 94–63, § 941(h)(1), substituted “subpart” for “part”.

Subsec. (c). Pub. L. 94–63, § 941(h)(2), struck out “of Health, Education, and Welfare” after “Secretary”.

Subsecs. (d) to (i). Pub. L. 94–63, § 941(h)(1), substituted “subpart” for “part” whenever appearing.

Subsec. (j). Pub. L. 94–63, § 941(h)(5), added subsec. (j), formerly classified as section 297i of this title pursuant to enactment as section 830 of act July 1, 1944, ch. 373. Section 941(h)(5)(A) ofPub. L. 94–63transferred such former section to this section and section 941(h)(5)(B) redesignated provision as subsec. (j).

1971—Subsec. (a). Pub. L. 92–158, § 6(a), substituted “$2,500” for “$1,500” and “$10,000” for “$60,000”.

Subsec. (b)(1). Pub. L. 92–158, § 6(e), substituted “full-time or half-time course of study” for “full-time course of study”.

Subsec. (b)(2). Pub. L. 92–158, § 6(e), in text preceding cl. (A), substituted “full-time or half-time course of study” for “full-time course of study”.

Subsec. (b)(3). Pub. L. 92–158, § 6(b)(1)(A), substituted provisions cancelling up to 85 per centum of loan, for provisions cancelling up to 50 per centum of loan, where borrower holds full-time employment as a professional nurse, added to areas of possible employment under this par. by inserting reference to any public or nonprofit organization including neighborhood health centers, substituted, with regard to the rate of cancellation of loan, the rate of 15 per centum of the amount unpaid on the first day of service, continuing at such rate with each of the first, second and third complete years of such service and 20 per centum of such amount with each complete fourth and fifth year of service for the rate of 10 per centum of the amount unpaid on the first day of service and to continue with each complete year of service, and struck out reference to 15 per centum rate of cancellation per complete year of service plus, for the purpose of such higher rate, the cancellation of an additional 50 per centum of such loan where such service is in a public or nonprofit hospital in any area which is determined, in accordance with the regulations of the Secretary, to be in an area having a substantial shortage of such nurses at such hospitals.

Subsec. (h). Pub. L. 92–158, § 6(b)(1)(B), added subsec. (h).

1968—Subsec. (a). Pub. L. 90–490, § 222(b)(1), increased limitation on amount of annual loans per student from $1,000 to $1,500, required preferences in granting of loans to licensed practical nurses, and limited aggregate of loans for all years to any one student to $6,000.

Subsec. (b)(2). Pub. L. 90–490, § 222(b)(2), provided for commencement of repayment nine months, rather than one year, after student ceases to pursue full-time course of study, excluded from ten-year repayment period periods (up to three years) of active duty as member of a uniformed service or Peace Corps volunteer service and periods (up to five years) as undergraduate or graduate degree student in nursing, including advanced professional training in nursing, and struck out prohibition against accrual of interest on loans.

Subsec. (b)(3). Pub. L. 90–490, § 222(b)(3), authorized cancellation of an additional 50 per centum of a nursing student loan (plus interest) at rate of 15 per centum for each complete year of service in a public or other nonprofit hospital in an area with a substantial shortage of nurses.

Subsec. (b)(5). Pub. L. 90–490, § 222(b)(4), struck out provisions for an interest rate which is the greater of 3 per centum or the going Federal rate at time loan is made, defining going Federal rate, and making rate determined for first loan applicable to any subsequent loan.

Subsecs. (f), (g). Pub. L. 90–490, § 222(c)(1), added subsecs. (f) and (g).

1965—Subsec. (b)(5). Pub. L. 89–290applied rate of interest for first loan obtained by a student from a loan fund established under this part to any subsequent loan to such student from such fund during his course of study.

Effective Date of 1998 Amendment

Pub. L. 105–392, title I, § 133(c)(2),Nov. 13, 1998, 112 Stat. 3576, provided that: “The amendment made by paragraph (1) [amending this section] shall be effective with respect to actions pending on or after the date of enactment of this Act [Nov. 13, 1998].”

Effective Date of 1985 Amendment

Amendment by Pub. L. 99–92effective Oct. 1, 1985, see section 10(a) ofPub. L. 99–92, set out as a note under section 297a of this title.

Effective Date of 1975 Amendment

Section 936(b) ofPub. L. 94–63provided that the amendment made by that section is effective with respect to periods of training to be a nurse anesthetist undertaken on or after July 29, 1975.

Amendment by section 941(h)(1), (2), (5), (i)(1) ofPub. L. 94–63effective July 1, 1975, see section 942 ofPub. L. 94–63, set out as a note under section 297a of this title.

Effective Date of 1971 Amendment

Section 6(a)(1) ofPub. L. 92–158provided that the amendment made by that section is effective with respect to academic years (or their equivalent as determined under regulations of the Secretary of Health, Education, and Welfare under this section) beginning after June 30, 1971.

Effective Date of 1968 Amendment

Pub. L. 90–490, title II, § 222(i),Aug. 16, 1968, 82 Stat. 785, provided that: “The amendments made by subsection (b)(1) and (2) [amending this section] shall apply with respect to all loans made after June 30, 1969, and with respect to loans made from a student loan fund established under an agreement pursuant to section 822 [section 297a of this title], before July 1, 1969, to the extent agreed to by the school which made the loans and the Secretary (but then only for years beginning after June 30, 1968). The amendments made by subsection (b)(4) [amending this section] and subsection (c) [amending this section and section 297a of this title] shall apply with respect to loans made after June 30, 1969. The amendment made by subsection (h) [enacting section 297h of this title] shall apply with respect to appropriations for fiscal years beginning after June 30, 1969. The amendment made by subsection (b)(3) [amending this section] shall apply with respect to service, specified in section 823(b)(3) of such Act [subsec. (b)(3) of this section] performed during academic years beginning after the enactment of this Act, whether the loan was made before or after such enactment [Aug. 16, 1968].”

Construction of 1992 Amendment

Pub. L. 102–408, title II, § 211(b),Oct. 13, 1992, 106 Stat. 2079, provided that: “With respect to section 836(h) of the Public Health Service Act [former subsec. (h) of this section], as in effect prior to the date of the enactment of this Act [Oct. 13, 1992], any agreement entered into under such section that is in effect on the day before such date remains in effect in accordance with the terms of the agreement, notwithstanding the amendment made by subsection (a) of this section [enacting section 297n of this title, amending this section, and repealing section 297c–1 of this title].”