Hpsl Law

42 USC Sec. 292q
-EXPCITETITLE 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.
Sec. 292r. Loan provisions
(a) Amount of loan
(1) In general
Loans from a student loan fund (established under an agreement
with a school under section 292q of this title) may not, subject
to paragraph (2), exceed for any student for a school year (or
its equivalent) the cost of attendance (including tuition, other
reasonable educational expenses, and reasonable living costs) for
that year at the educational institution attended by the student
(as determined by such educational institution).
(2) Third and fourth years of medical school
For purposes of paragraph (1), the amount of the loan may, in
the case of the third or fourth year of a student at a school of
medicine or osteopathic medicine, be increased to the extent
necessary to pay the balances of loans that, from sources other
than the student loan fund under section 292q of this title, were
made to the individual for attendance at the school. The
authority to make such an increase is subject to the school and
the student agreeing that such amount (as increased) will be
expended to pay such balances.
(b) Terms and conditions
Subject to section 292s of this title, any such loans shall be
made on such terms and conditions as the school may determine, but
may be made only to a student (1) who is in need of the amount thereof to pursue 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; and
(2) who, 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.
(c) Repayment; exclusions from repayment period
Such loans shall be repayable in equal or graduated periodic
installments (with the right of the borrower to accelerate
repayment) over the period of not less than 10 years nor more than
25 years, at the discretion of the institution, which begins one
year after the student ceases to pursue a full-time course of study
at a school of medicine, osteopathic medicine, dentistry, pharmacy,
podiatry, optometry, or veterinary medicine, excluding from such
period (1) all periods (A) not in excess of three years of active duty performed by
the borrower as a member of a uniformed service;
(B) not in excess of three years during which the borrower
serves as a volunteer under the Peace Corps Act [22 U.S.C. 2501
et seq.];
(C) during which the borrower participates in advanced
professional training, including internships and residencies;
and
(D) during which the borrower is pursuing a full-time course
of study at such a school; and
(2) a period (A) not in excess of two years during which a borrower who is
a full-time student in such a school leaves the school, with
the intent to return to such school as a full-time student, in
order to engage in a full-time educational activity which is
directly related to the health profession for which the
borrower is preparing, as determined by the Secretary; or
(B) not in excess of two years during which a borrower who is
a graduate of such a school is a participant in a fellowship
training program or a full-time educational activity which (i) is directly related to the health profession for which
such borrower prepared at such school, 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 advanced
professional training described in paragraph (1)(C) or prior
to the completion of such borrower's participation in such
training.
(d) Cancellation of liability
The liability to repay the unpaid balance of such a 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.
(e) Rate of interest
Such loans shall bear interest, on the unpaid balance of the
loan, computed only for periods for which the loan is repayable, at
the rate of 5 percent per year.
(f) Security or endorsement
Loans shall be made under this subpart 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.
(g) Transferring and assigning loans
No note or other evidence of a loan made under this subpart may
be transferred or assigned by the school making the loan except
that, if the borrowers transfer to another school participating in
the program under this subpart, such note or other evidence of a
loan may be transferred to such other school.
(h) Charge with respect to insurance for certain cancellations
Subject to regulations of the Secretary, a school may assess a
charge with respect to loans made this subpart to cover the
costs of insuring against cancellation of liability under
subsection (d) of this section.
(i) Charge with respect to late payments
Subject to regulations of the Secretary, and in accordance with
this section, a school shall assess a charge with respect to a loan
made under this subpart 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
(c) 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.
(j) Authority of schools regarding rate of payment
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 subpart

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.
(k) Authority regarding repayments by Secretary
Upon application by a person who received, and is under an
obligation to repay, any loan made to such person as a health
professions student to enable him to study medicine, osteopathy,
dentistry, veterinary medicine, optometry, pharmacy, or podiatry,
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 such studies leading to his first
professional degree;
(2) is in exceptionally needy circumstances;
(3) is from a low-income or disadvantaged family as those terms
may be defined by such regulations; and
(4) has not resumed, or cannot reasonably be expected to
resume, the study of medicine, osteopathy, dentistry, veterinary
medicine, optometry, pharmacy, or podiatric medicine, within two
years following the date upon which he terminated such studies.
(l) Collection efforts by Secretary
The Secretary is authorized to attempt to collect any loan which
was made under this subpart, which is in default, and which was
referred to the Secretary by a school with which the Secretary has
an agreement under this subpart, 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 subpart. 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.
(m) 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 that has an
agreement with the Secretary pursuant to section 292q of this
title that is seeking the repayment of the amount due from a
borrower on a loan made under this subpart after the default of
the borrower on such loan.
AMENDMENTS
1998 - Subsec. (a)(1). Pub. L. 105-392, Sec. 134(a)(1),
substituted "the cost of attendance (including tuition, other
reasonable educational expenses, and reasonable living costs) for
that year at the educational institution attended by the student
(as determined by such educational institution)." for "the sum of "(A) the cost of tuition for such year at such school, and
"(B) $2,500."
Subsec. (a)(2). Pub. L. 105-392, Sec. 134(a)(2), substituted "the
amount of the loan may, in the case of the third or fourth year of
a student at a school of medicine or osteopathic medicine, be
increased to the extent necessary" for "the amount $2,500 may, in
the case of the third or fourth year of a student at school of
medicine or osteopathic medicine, be increased to the extent
necessary (including such $2,500)".
Subsec. (c). Pub. L. 105-392, Sec. 134(a)(3), in heading,
substituted "repayment" for "ten-year" and, in introductory
provisions, substituted "period of not less than 10 years nor more
than 25 years, at the discretion of the institution, which begins"
for "ten-year period which begins" and "such period" for "such
ten-year period".
Subsec. (j). Pub. L. 105-392, Sec. 134(a)(4), substituted "$40"
for "$15".
Subsec. (m). Pub. L. 105-392, Sec. 134(b)(1), added subsec. (m).
1993 - Subsec. (a). Pub. L. 103-43, Sec. 2014(b)(1), amended
heading and text of subsec. (a) generally. Prior to amendment, text
read as follows: "Loans from a student loan fund (established under
an agreement with a school under section 292q of this title) may
not exceed for any student for each school year (or its equivalent)
the sum of "(1) the cost of tuition for such year at such school, and
"(2) $2,500."
Subsec. (b)(2), (3). Pub. L. 103-43, Sec. 2014(b)(2),
redesignated par. (3) as (2) and struck out former par. (2), which
read as follows: "who, if pursuing a full-time course of study at
the school leading to a degree of doctor of medicine or doctor of

osteopathy, is of exceptional financial need (as defined by
regulations of the Secretary); and".
Sec. 292s. Medical schools and primary health care
(a) Requirements for students
(1) In general
Subject to the provisions of this subsection, in the case of
student loan funds established under section 292q of this title
by schools of medicine or osteopathic medicine, each agreement
entered into under such section with such a school shall provide
(in addition to the provisions required in subsection (b) of such
section) that the school will make a loan from such fund to a
student only if the student agrees (A) to enter and complete a residency training program in
primary health care not later than 4 years after the date on
which the student graduates from such school; and
(B) to practice in such care through the date on which the
loan is repaid in full.
(2) Inapplicability to certain students
(A) The requirement established in paragraph (1) regarding the
student loan fund of a school does not apply to a student if (i) the first loan to the student from such fund is made
before July 1, 1993; or
(ii) the loan is made from (I) a Federal capital contribution under section 292q of
this title that is made from amounts appropriated under
section 292t(f) (!1) of this title (in this section referred
to as an "exempt Federal capital contribution"); or
(II) a school contribution made under section 292q of this
title pursuant to such a Federal capital contribution (in
this section referred to as an "exempt school contribution").
(B) A Federal capital contribution under section 292q of this
title may not be construed as being an exempt Federal capital
contribution if the contribution was made from amounts
appropriated before October 1, 1990. A school contribution under
section 292q of this title may not be construed as being an
exempt school contribution if the contribution was made pursuant
to a Federal capital contribution under such section that was
made from amounts appropriated before such date.
(3) Noncompliance by student
Each agreement entered into with a student pursuant to
paragraph (1) shall provide that, if the student fails to comply
with such agreement, the loan involved will begin to accrue

interest at a rate of 18 percent per year beginning on the date
of such noncompliance.
(4) Waivers
(A) With respect to the obligation of an individual under an
agreement made under paragraph (1) as a student, the Secretary
shall provide for the partial or total waiver or suspension of
the obligation whenever compliance by the individual is
impossible, or would involve extreme hardship to the individual,
and if enforcement of the obligation with respect to the
individual would be unconscionable.
(B) For purposes of subparagraph (A), the obligation of an
individual shall be waived if (i) the status of the individual as a student of the school
involved is terminated before graduation from the school,
whether voluntarily or involuntarily; and
(ii) the individual does not, after such termination, resume
attendance at the school or begin attendance at any other
school of medicine or osteopathic medicine.
(C) If an individual resumes or begins attendance for purposes
of subparagraph (B), the obligation of the individual under the
agreement under paragraph (1) shall be considered to have been
suspended for the period in which the individual was not in
attendance.
(D) This paragraph may not be construed as authorizing the
waiver or suspension of the obligation of a student to repay, in
accordance with section 292r of this title, loans from student
loan funds under section 292q of this title.
(b) Requirements for schools
(1) In general
Subject to the provisions of this subsection, in the case of
student loan funds established under section 292q of this title
by schools of medicine or osteopathic medicine, each agreement
entered into under such section with such a school shall provide
(in addition to the provisions required in subsection (b) of such
section) that, for the 1-year period ending on June 30, 1997;
(!2) and for the 1-year period ending on June 30 of each
subsequent fiscal year, the school will meet not less than 1 of
the conditions described in paragraph (2) with respect to
graduates of the school whose date of graduation from the school
occurred approximately 4 years before the end of the 1-year
period involved.
(2) Description of conditions
With respect to graduates described in paragraph (1) (in this
paragraph referred to as "designated graduates"), the conditions

referred to in such paragraph for a school for a 1-year period
are as follows:
(A) Not less than 50 percent of designated graduates of the
school meet the criterion of either being in a residency
training program in primary health care, or being engaged in a
practice in such care (having completed such a program).
(B) Not less than 25 percent of the designated graduates of
the school meet such criterion, and such percentage is not less
than 5 percentage points above the percentage of such graduates
meeting such criterion for the preceding 1-year period.
(C) In the case of schools of medicine or osteopathic
medicine with student loans funds under section 292q of this
title, the school involved is at or above the 75th percentile
of such schools whose designated graduates meet such criterion.
(3) Determinations by Secretary
Not later than 90 days after the close of each 1-year period
described in paragraph (1), the Secretary shall make a
determination of whether the school involved has for such period
complied with such paragraph and shall in writing inform the
school of the determination. Such determination shall be made
only after consideration of the report submitted to the Secretary
by the school under paragraph (6).
(4) Noncompliance by school
(A)(i) Subject to subparagraph (C), each agreement under
section 292q of this title with a school of medicine or
osteopathic medicine shall provide that, if the school fails to
comply with paragraph (1) for a 1-year period under such
paragraph, the school (I) will pay to the Secretary the amount applicable under
subparagraph (B) for the period; and
(II) will pay such amount not later than 90 days after the
school is informed under paragraph (3) of the determination of
the Secretary regarding such period.
(ii) Any amount that a school is required to pay under clause
(i) may be paid from the student loan fund of the school under
section 292q of this title.
(B) For purposes of subparagraph (A), the amount applicable for
a school, subject to subparagraph (C), is (i) for the 1-year period ending June 30, 1997, an amount
equal to 10 percent of the income received during such period
by the student loan fund of the school under section 292q of
this title;
(ii) for the 1-year period ending June 30, 1998, an amount
equal to 20 percent of the income received during such period
by the student loan fund; and

(iii) for any subsequent 1-year period under paragraph (1),
an amount equal to 30 percent of the income received during
such period by the student loan fund.
(C) In determining the amount of income that a student loan
fund has received for purposes of subparagraph (B), the Secretary
shall exclude any income derived from exempt contributions.
Payments made to the Secretary under subparagraph (A) may not be
made with such contributions or with income derived from such
contributions.
(5) Expenditure of payments
(A) Amounts paid to the Secretary under paragraph (4) shall be
expended to make Federal capital contributions to student loan
funds under section 292q of this title of schools that are in
compliance with paragraph (1).
(B) A Federal capital contribution under section 292q of this
title may not be construed as being an exempt Federal capital
contribution if the contribution is made from payments under
subparagraph (A). A school contribution under such section may
not be construed as being an exempt school contribution if the
contribution is made pursuant to a Federal capital contribution
from such payments.
(6) Reports by schools
Each agreement under section 292q of this title with a school
of medicine or osteopathic medicine shall provide that the school
will submit to the Secretary a report for each 1-year period
under paragraph (1) that provides such information as the
Secretary determines to be necessary for carrying out this
subsection. Each such report shall include statistics concerning
the current training or practice status of all graduates of such
school whose date of graduation from the school occurred
approximately 4 years before the end of the 1-year period
involved.
(c) Definitions
For purposes of this section:
(1) The term "exempt contributions" means exempt Federal
capital contributions and exempt school contributions.
(2) The term "exempt Federal capital contribution" means a
Federal capital contribution described in subclause (I) of
subsection (a)(2)(A)(ii) of this section.
(3) The term "exempt school contribution" means a school
contribution described in subclause (II) of subsection
(a)(2)(A)(ii) of this section.
(4) The term "income", with respect to a student fund under
section 292q of this title, means payments of principal and
interest on any loan made from the fund, and any other earnings

of the fund.
(5) The term "primary health care" means family medicine,
general internal medicine, general pediatrics, preventive
medicine, or osteopathic general practice.
Sec. 292t. Individuals from disadvantaged backgrounds
-STATUTE(a) Fund agreements regarding certain amounts
With respect to amounts appropriated under subsection (f) of this
section, each agreement entered into under section 292q of this
title with a school shall provide (in addition to the provisions
required in subsection (b) of such section) that (1) any Federal capital contribution made to the student loan
fund of the school from such amounts, together with the school
contribution appropriate under subsection (b)(2)(B) of such
section to the amount of the Federal capital contribution, will
be utilized only for the purpose of (A) making loans to individuals from disadvantaged
backgrounds; and
(B) the costs of the collection of the loans and interest on
the loans; and
(2) collections of principal and interest on loans made
pursuant to paragraph (1), and any other earnings of the student
loan fund attributable to amounts that are in the fund pursuant
to such paragraph, will be utilized only for the purpose
described in such paragraph.
(b) Minimum qualifications for schools
The Secretary may not make a Federal capital contribution for
purposes of subsection (a) of this section for a fiscal year unless
the health professions school involved (1) is carrying out a program for recruiting and retaining
students from disadvantaged backgrounds, including racial and
ethnic minorities; and
(2) is carrying out a program for recruiting and retaining
minority faculty.
(c) Certain agreements regarding education of students; date
certain for compliance
The Secretary may not make a Federal capital contribution for
purposes of subsection (a) of this section for a fiscal year unless
the health professions school involved agrees (1) to ensure that adequate instruction regarding minority
health issues is provided for in the curricula of the school;
(2) with respect to health clinics providing services to a
significant number of individuals who are from disadvantaged
backgrounds, including members of minority groups, to enter into

arrangements with 1 or more such clinics for the purpose of
providing students of the school with experience in providing
clinical services to such individuals;
(3) with respect to public or nonprofit private secondary
educational institutions and undergraduate institutions of higher
education, to enter into arrangements with 1 or more such
institutions for the purpose of carrying out programs regarding
the educational preparation of disadvantaged students, including
minority students, to enter the health professions and regarding
the recruitment of such individuals into the health professions;
(4) to establish a mentor program for assisting disadvantaged
students, including minority students, regarding the completion
of the educational requirements for degrees from the school;
(5) to be carrying out each of the activities specified in any
of paragraphs (1) through (4) by not later than 1 year after the
date on which the first Federal capital contribution is made to
the school for purposes of subsection (a) of this section; and
(6) to continue carrying out such activities, and the
activities specified in paragraphs (1) and (2) of subsection (b)
of this section, throughout the period during which the student
loan fund established pursuant to section 292q(b) of this title
is in operation.
(d) Availability of other amounts
With respect to Federal capital contributions to student loan
funds under agreements under section 292q(b) of this title, any
such contributions made before October 1, 1990, together with the
school contributions appropriate under paragraph (2)(B) of such
section to the amount of the Federal capital contributions, may be
utilized for the purpose of making loans to individuals from
disadvantaged backgrounds, subject to section 292s(a)(2)(B) of this
title.
(e) "Disadvantaged" defined
For purposes of this section, the term "disadvantaged", with
respect to an individual, shall be defined by the Secretary.
(f) Authorization of appropriations
(1) Repealed. Pub. L. 105-392, title I, Sec. 132(b), Nov. 13,
1998, 112 Stat. 3575
(2) Special consideration for certain schools
In making Federal capital contributions to student loan funds
for purposes of subsection (a) of this section, the Secretary
shall give special consideration to health professions schools
that have enrollments of underrepresented minorities above the
national average for health professions schools.
Sec. 292y. General provisions
-STATUTE-

(a) Date certain for applications
The Secretary shall from time to time set dates by which schools
must file applications for Federal capital contributions.
(b) Contingent reduction in allotments
If the total of the amounts requested for any fiscal year in such
applications exceeds the amounts appropriated under this section
for that fiscal year, the allotment to the loan fund of each such
school shall be reduced to whichever of the following is the
smaller: (A) the amount requested in its application; or (B) an
amount which bears the same ratio to the amounts appropriated as
the number of students estimated by the Secretary to be enrolled in
such school during such fiscal year bears to the estimated total
number of students in all such schools during such year. Amounts
remaining after allotment under the preceding sentence shall be
reallotted in accordance with clause (B) of such sentence among
schools whose applications requested more than the amounts so
allotted to their loan funds, but with such adjustments as may be
necessary to prevent the total allotted to any such school's loan
fund from exceeding the total so requested by it.
(c) Allotment of excess funds
Funds available in any fiscal year for payment to schools under
this subpart which are in excess of the amount appropriated
pursuant to this section for that year shall be allotted among
schools in such manner as the Secretary determines will best carry
out the purposes of this subpart.
(d) Payment of installments to schools
Allotments to a loan fund of a school shall be paid to it from
time to time in such installments as the Secretary determines will
not result in unnecessary accumulations in the loan fund at such
school.
(e) Disposition of funds returned to Secretary
(1) Expenditure for Federal capital contributions
Subject to section 292s(b)(5) of this title, any amounts from
student loan funds under section 292q of this title that are
returned to the Secretary by health professions schools shall be
expended to make Federal capital contributions to such funds.
(2) Date certain for contributions
Amounts described in paragraph (1) that are returned to the
Secretary shall be obligated before the end of the succeeding
fiscal year.
(3) Preference in making contributions
In making Federal capital contributions to student loans funds
under section 292q of this title for a fiscal year from amounts
described in paragraph (1), the Secretary shall give preference
to health professions schools of the same disciplines as the
health professions schools returning such amounts for the period

during which the amounts expended for such contributions were
received by the Secretary. Any such amounts that, prior to being
so returned, were available only for the purpose of loans under
this subpart to individuals from disadvantaged backgrounds shall
be available only for such purpose.
(f) Funding for certain medical schools
(1) Authorization of appropriations
For the purpose of making Federal capital contributions to
student loan funds established under section 292q of this title
by schools of medicine or osteopathic medicine, there is
authorized to be appropriated $10,000,000 for each of the fiscal
years 1994 through 1996.
(2) Minimum requirements
(A) Subject to subparagraph (B), the Secretary may make a
Federal capital contribution pursuant to paragraph (1) only if
the school of medicine or osteopathic medicine involved meets the
conditions described in subparagraph (A) of section 292s(b)(2) of
this title or the conditions described in subparagraph (C) of
such section.
(B) For purposes of subparagraph (A), the conditions referred
to in such subparagraph shall be applied with respect to
graduates of the school involved whose date of graduation
occurred approximately 3 years before June 30 of the fiscal year
preceding the fiscal year for which the Federal capital
contribution involved is made.
-SOURCE(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.)
-MISC1PRIOR 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.