0915-0337 - Section 338A-H of the PHS Act - Attachment B

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review and comment upon regulations promulgated by the Secretary under this subpart.
(b)(1) Members of the Council shall be appointed for a term of
three years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which the member’s
predecessor was appointed shall be appointed for the remainder of
such term. No member shall be removed, except for cause.
(2) Members of the Council (other than members who are officers or employees of the United States), while attending meetings
or conferences thereof or otherwise serving on the business of the
Council, shall be entitled to receive for each day (including traveltime) in which they are so serving compensation at a rate fixed by
the Secretary (but not to exceed the daily equivalent of the annual
rate of basic pay in effect for grade GS–18 of the General Schedule); and while so serving away from their homes or regular places
of business all members may be allowed travel expenses, including
per diem in lieu of subsistence, as authorized by section 5703 of
title 5 of the United States Code for persons in the Government
service employed intermittently.
(c) Section 1013 of title 5, United States Code, shall not apply
with respect to the Council.
AUTHORIZATION OF APPROPRIATION

SEC. 338. ø254k¿ (a) For the purpose of carrying out this subpart, there are authorized to be appropriated such sums as may be
necessary for each of the fiscal years 2008 through 2012.
(b) An appropriation under an authorization under subsection
(a) for any fiscal year may be made at any time before that fiscal
year and may be included in an Act making an appropriation under
an authorization under subsection (a) for another fiscal year; but
no funds may be made available from any appropriation under
such authorization for obligation under sections 331 through 335,
section 336A, and section 337 before the fiscal year for which such
appropriation is authorized.

Subpart III—Scholarship Program and Loan
Repayment Program
NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP PROGRAM

SEC. 338A. ø254l¿ (a) The Secretary shall establish the National Health Service Corps Scholarship Program to assure, with
respect to the provision of primary health services pursuant to section 331(a)(2)—
(1) an adequate supply of physicians, dentists, behavioral
and mental health professionals, certified nurse midwives, certified nurse practitioners, and physician assistants; and
(2) if needed by the Corps, an adequate supply of other
health professionals.
(b) To be eligible to participate in the Scholarship Program, an
individual must—
(1) be accepted for enrollment, or be enrolled, as a full-time
student (A) in an accredited (as determined by the Secretary)
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educational institution in a State and (B) in a course of study
or program, offered by such institution and approved by the
Secretary, leading to a degree in medicine, osteopathic medicine, dentistry, or other health profession, or an appropriate
degree from a graduate program of behavioral and mental
health;
(2) be eligible for, or hold, an appointment as a commissioned officer in the Regular or Reserve Corps of the Service
or be eligible for selection for civilian service in the Corps;
(3) submit an application to participate in the Scholarship
Program; and
(4) sign and submit to the Secretary, at the time of submittal of such application, a written contract (described in subsection (f)) to accept payment of a scholarship and to serve (in
accordance with this subpart) for the applicable period of obligated service in a health professional shortage area.
(c)(1) In disseminating application forms and contract forms to
individuals desiring to participate in the Scholarship Program, the
Secretary shall include with such forms—
(A) a fair summary of the rights and liabilities of an individual whose application is approved (and whose contract is accepted) by the Secretary, including in the summary a clear explanation of the damages to which the United States is entitled
under section 338E in the case of the individual’s breach of the
contract; and
(B) information respecting meeting a service obligation
through private practice under an agreement under section
338D and such other information as may be necessary for the
individual to understand the individual’s prospective participation in the Scholarship Program and service in the Corps, including a statement of all factors considered in approving applications for participation in the Program and in making assignments for participants in the Program.
(2) The application form, contract form, and all other information furnished by the Secretary under this subpart shall be written
in a manner calculated to be understood by the average individual
applying to participate in the Scholarship Program. The Secretary
shall make such application forms, contract forms, and other information available to individuals desiring to participate in the Scholarship Program on a date sufficiently early to insure that such individuals have adequate time to carefully review and evaluate such
forms and information.
(3)(A) The Secretary shall distribute to health professions
schools materials providing information on the Scholarship Program and shall encourage the schools to disseminate the materials
to the students of the schools.
(B)(i) In the case of any health professional whose period of obligated service under the Scholarship Program is nearing completion, the Secretary shall encourage the individual to remain in a
health professional shortage area and to continue providing primary health services.
(ii) During the period in which a health professional is planning and making the transition to private practice from obligated
service under the Scholarship Program, the Secretary may provide
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assistance to the professional regarding such transition if the professional is remaining in a health professional shortage area and
is continuing to provide primary health services.
(C) In the case of entities to which participants in the Scholarship Program are assigned under section 333, the Secretary shall
encourage the entities to provide options with respect to assisting
the participants in remaining in the health professional shortage
areas involved, and in continuing to provide primary health services, after the period of obligated service under the Scholarship
Program is completed. The options with respect to which the Secretary provides such encouragement may include options regarding
the sharing of a single employment position in the health professions by 2 or more health professionals, and options regarding the
recruitment of couples where both of the individuals are health
professionals.
(d)(1) Subject to section 333A, in providing contracts under the
Scholarship Program—
(A) the Secretary shall consider the extent of the demonstrated interest of the applicants for the contracts in providing primary health services;
(B) the Secretary, in considering applications from individuals accepted for enrollment or enrolled in dental school, shall
consider applications from all individuals accepted for enrollment or enrolled in any accredited dental school in a State;
and
(C) may consider such other factors regarding the applicants as the Secretary determines to be relevant to selecting
qualified individuals to participate in such Program.
(2) In providing contracts under the Scholarship Program, the
Secretary shall give priority—
(A) first, to any application for such a contract submitted
by an individual who has previously received a scholarship
under this section or under section 758;
(B) second, to any application for such a contract submitted by an individual who has characteristics that increase
the probability that the individual will continue to serve in a
health professional shortage area after the period of obligated
service pursuant to subsection (f) is completed; and
(C) third, subject to subparagraph (B), to any application
for such a contract submitted by an individual who is from a
disadvantaged background.
(e)(1) An individual becomes a participant in the Scholarship
Program only upon the Secretary’s approval of the individual’s application submitted under subsection (b)(3) and the Secretary’s acceptance of the contract submitted by the individual under subsection (b)(4).
(2) The Secretary shall provide written notice to an individual
promptly upon the Secretary’s approving, under paragraph (1), of
the individual’s participation in the Scholarship Program.
(f) The written contract (referred to in this subpart) between
the Secretary and an individual shall contain—
(1) an agreement that—
(A) subject to paragraph (2), the Secretary agrees (i) to
provide the individual with a scholarship (described in
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subsection (g)) in each such school year or years for a period of years (not to exceed four school years) determined
by the individual, during which period the individual is
pursuing a course of study described in subsection
(b)(1)(B), and (ii) to accept (subject to the availability of appropriated funds for carrying out sections 331 through 335
and section 337) the individual into the Corps (or for
equivalent service as otherwise provided in this subpart);
and
(B) subject to paragraph (2), the individual agrees—
(i) to accept provision of such a scholarship to the
individual;
(ii) to maintain enrollment in a course of study described in subsection (b)(1)(B) until the individual
completes the course of study;
(iii) while enrolled in such course of study, to
maintain an acceptable level of academic standing (as
determined under regulations of the Secretary by the
educational institution offering such course of study);
(iv) if pursuing a degree from a school of medicine
or osteopathic medicine, to complete a residency in a
specialty that the Secretary determines is consistent
with the needs of the Corps; and
(v) to serve for a time period (hereinafter in the
subpart referred to as the ‘‘period of obligated service’’)
equal to—
(I) one year for each school year for which the
individual was provided a scholarship under the
Scholarship Program, or
(II) two years,
whichever is greater, as a provider of primary health
services in a health professional shortage area (designated under section 332) to which he is assigned by
the Secretary as a member of the Corps, or as otherwise provided in this subpart;
(2) a provision that any financial obligation of the United
States arising out of a contract entered into under this subpart
and any obligation of the individual which is conditioned thereon, is contingent upon funds being appropriated for scholarships under this subpart and to carry out the purposes of sections 331 through 335 and sections 337 and 338;
(3) a statement of the damages to which the United States
is entitled, under section 338E for the individual’s breach of
the contract; and
(4) such other statements of the rights and liabilities of the
Secretary and of the individual, not inconsistent with the provisions of this subpart.
(g)(1) A scholarship provided to a student for a school year
under a written contract under the Scholarship Program shall consist of—
(A) payment to, or (in accordance with paragraph (2)) on
behalf of, the student of the amount (except as provided in section 711) of—
(i) the tuition of the student in such school year; and
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(ii) all other reasonable educational expenses, including fees, books, and laboratory expenses, incurred by the
student in such school year; and
(B) payment to the student of a stipend of $400 per month
(adjusted in accordance with paragraph (3)) for each of the 12
consecutive months beginning with the first month of such
school year.
(2) The Secretary may contract with an educational institution,
in which a participant in the Scholarship Program is enrolled, for
the payment to the educational institution of the amounts of tuition and other reasonable educational expenses described in paragraph (1)(A). Payment to such an educational institution may be
made without regard to section 3648 of the Revised Statutes (31
U.S.C. 529).
(3) The amount of the monthly stipend, specified in paragraph
(1)(B) and as previously adjusted (if at all) in accordance with this
paragraph, shall be increased by the Secretary for each school year
ending in a fiscal year beginning after September 30, 1978, by an
amount (rounded to the next highest multiple of $1) equal to the
amount of such stipend multiplied by the overall percentage (under
section 5303 of title 5, United States Code) of the adjustment (if
such adjustment is an increase) in the rates of pay under the General Schedule made effective in the fiscal year in which such school
year ends.
(h) Notwithstanding any other provision of law, individuals
who have entered into written contracts with the Secretary under
this section, while undergoing academic training, shall not be
counted against any employment ceiling affecting the Department.
SEC. 338B. ø254l–1¿ NATIONAL HEALTH SERVICE CORPS LOAN REPAYMENT PROGRAM.
(a) ESTABLISHMENT.—The Secretary shall establish a program

to be known as the National Health Service Corps Loan Repayment
Program to assure, with respect to the provision of primary health
services pursuant to section 331(a)(2)—
(1) an adequate supply of physicians, dentists, behavioral
and mental health professionals, certified nurse midwives, certified nurse practitioners, and physician assistants; and
(2) if needed by the Corps, an adequate supply of other
health professionals.
(b) ELIGIBILITY.—To be eligible to participate in the Loan Repayment Program, an individual must—
(1)(A) have a degree in medicine, osteopathic medicine,
dentistry, or another health profession, or an appropriate degree from a graduate program of behavioral and mental health,
or be certified as a nurse midwife, nurse practitioner, or physician assistant;
(B) be enrolled in an approved graduate training program
in medicine, osteopathic medicine, dentistry, behavioral and
mental health, or other health profession; or
(C) be enrolled as a full-time student—
(i) in an accredited (as determined by the Secretary)
educational institution in a State; and
(ii) in the final year of a course of a study or program,
offered by such institution and approved by the Secretary,
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leading to a degree in medicine, osteopathic medicine, dentistry, or other health profession;
(2) be eligible for, or hold, an appointment as a commissioned officer in the Regular or Reserve Corps of the Service
or be eligible for selection for civilian service in the Corps; and
(3) submit to the Secretary an application for a contract
described in subsection (f) (relating to the payment by the Secretary of the educational loans of the individual in consideration of the individual serving for a period of obligated service).
(c) APPLICATION, CONTRACT, AND INFORMATION REQUIREMENTS.—
(1) SUMMARY AND INFORMATION.—In disseminating application forms and contract forms to individuals desiring to participate in the Loan Repayment Program, the Secretary shall
include with such forms—
(A) a fair summary of the rights and liabilities of an
individual whose application is approved (and whose contract is accepted) by the Secretary, including in the summary a clear explanation of the damages to which the
United States is entitled under section 338E in the case of
the individual’s breach of the contract; and
(B) information respecting meeting a service obligation
through private practice under an agreement under section
338D and such other information as may be necessary for
the individual to understand the individual’s prospective
participation in the Loan Repayment Program and service
in the Corps.
(2) UNDERSTANDABILITY.—The application form, contract
form, and all other information furnished by the Secretary
under this subpart shall be written in a manner calculated to
be understood by the average individual applying to participate
in the Loan Repayment Program.
(3) AVAILABILITY.—The Secretary shall make such application forms, contract forms, and other information available to
individuals desiring to participate in the Loan Repayment Program on a date sufficiently early to ensure that such individuals have adequate time to carefully review and evaluate such
forms and information.
(4) RECRUITMENT AND RETENTION.—
(A) The Secretary shall distribute to health professions
schools materials providing information on the Loan Repayment Program and shall encourage the schools to disseminate the materials to the students of the schools.
(B)(i) In the case of any health professional whose period of obligated service under the Loan Repayment Program is nearing completion, the Secretary shall encourage
the individual to remain in a health professional shortage
area and to continue providing primary health services.
(ii) During the period in which a health professional is
planning and making the transition to private practice
from obligated service under the Loan Repayment Program, the Secretary may provide assistance to the professional regarding such transition if the professional is reJanuary 31, 2023

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maining in a health professional shortage area and is continuing to provide primary health services.
(C) In the case of entities to which participants in the
Loan Repayment Program are assigned under section 333,
the Secretary shall encourage the entities to provide options with respect to assisting the participants in remaining in the health professional shortage areas involved, and
in continuing to provide primary health services, after the
period of obligated service under the Loan Repayment Program is completed. The options with respect to which the
Secretary provides such encouragement may include options regarding the sharing of a single employment position in the health professions by 2 or more health professionals, and options regarding the recruitment of couples
where both of the individuals are health professionals.
(d)(1) Subject to section 333A, in providing contracts under the
Loan Repayment Program—
(A) the Secretary shall consider the extent of the demonstrated interest of the applicants for the contracts in providing primary health services; and
(B) may consider such other factors regarding the applicants as the Secretary determines to be relevant to selecting
qualified individuals to participate in such Program.
(2) In providing contracts under the Loan Repayment Program,
the Secretary shall give priority—
(A) to any application for such a contract submitted by an
individual whose training is in a health profession or specialty
determined by the Secretary to be needed by the Corps;
(B) to any application for such a contract submitted by an
individual who has (and whose spouse, if any, has) characteristics that increase the probability that the individual will continue to serve in a health professional shortage area after the
period of obligated service pursuant to subsection (f) is completed; and
(C) subject to subparagraph (B), to any application for such
a contract submitted by an individual who is from a disadvantaged background.
(e) APPROVAL REQUIRED FOR PARTICIPATION.—An individual becomes a participant in the Loan Repayment Program only upon the
Secretary and the individual entering into a written contract described in subsection (f).
(f) CONTENTS OF CONTRACTS.—The written contract (referred to
in this subpart) between the Secretary and an individual shall contain—
(1) an agreement that—
(A) subject to paragraph (3), the Secretary agrees—
(i) to pay on behalf of the individual loans in accordance with subsection (g); and
(ii) to accept (subject to the availability of appropriated funds for carrying out sections 331 through
335 and section 337) the individual into the Corps (or
for equivalent service as otherwise provided in this
subpart); and
(B) subject to paragraph (3), the individual agrees—
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(i) to accept loan payments on behalf of the individual;
(ii) in the case of an individual described in subsection (b)(1)(C), to maintain enrollment in a course of
study or training described in such subsection until
the individual completes the course of study or training;
(iii) in the case of an individual described in subsection (b)(1)(C), while enrolled in such course of study
or training, to maintain an acceptable level of academic standing (as determined under regulations of
the Secretary by the educational institution offering
such course of study or training); and
(iv) to serve for a time period (hereinafter in this
subpart referred to as the ‘‘period of obligated service’’)
equal to 2 years or such longer period as the individual may agree to, as a provider of primary health
services in a health professional shortage area (designated under section 332) to which such individual is
assigned by the Secretary as a member of the Corps
or released under section 338D;
(2) a provision permitting the Secretary to extend for such
longer additional periods, as the individual may agree to, the
period of obligated service agreed to by the individual under
paragraph (1)(B)(iv), including extensions resulting in an aggregate period of obligated service in excess of 4 years;
(3) a provision that any financial obligation of the United
States arising out of a contract entered into under this subpart
and any obligation of the individual that is conditioned thereon, is contingent on funds being appropriated for loan repayments under this subpart and to carry out the purposes of sections 331 through 335 and sections 337 and 338;
(4) a statement of the damages to which the United States
is entitled, under section 338E for the individual’s breach of
the contract; and
(5) such other statements of the rights and liabilities of the
Secretary and of the individual, not inconsistent with this subpart.
(g) PAYMENTS.—
(1) IN GENERAL.—A loan repayment provided for an individual under a written contract under the Loan Repayment
Program shall consist of payment, in accordance with paragraph (2), on behalf of the individual of the principal, interest,
and related expenses on government and commercial loans received by the individual regarding the undergraduate or graduate education of the individual (or both), which loans were
made for—
(A) tuition expenses;
(B) all other reasonable educational expenses, including fees, books, and laboratory expenses, incurred by the
individual; or
(C) reasonable living expenses as determined by the
Secretary.
(2) PAYMENTS FOR YEARS SERVED.—
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(A) IN GENERAL.—For each year of obligated service
that an individual contracts to serve under subsection (f)
the Secretary may pay up to $50,000, plus, beginning with
fiscal year 2012, an amount determined by the Secretary
on an annual basis to reflect inflation, on behalf of the individual for loans described in paragraph (1). In making a
determination of the amount to pay for a year of such service by an individual, the Secretary shall consider the extent to which each such determination—
(i) affects the ability of the Secretary to maximize
the number of contracts that can be provided under
the Loan Repayment Program from the amounts appropriated for such contracts;
(ii) provides an incentive to serve in health professional shortage areas with the greatest such shortages; and
(iii) provides an incentive with respect to the
health professional involved remaining in a health
professional shortage area, and continuing to provide
primary health services, after the completion of the
period of obligated service under the Loan Repayment
Program.
(B) REPAYMENT SCHEDULE.—Any arrangement made
by the Secretary for the making of loan repayments in accordance with this subsection shall provide that any repayments for a year of obligated service shall be made no later
than the end of the fiscal year in which the individual
completes such year of service.
(3) TAX LIABILITY.—For the purpose of providing reimbursements for tax liability resulting from payments under
paragraph (2) on behalf of an individual—
(A) the Secretary shall, in addition to such payments,
make payments to the individual in an amount equal to 39
percent of the total amount of loan repayments made for
the taxable year involved; and
(B) may make such additional payments as the Secretary determines to be appropriate with respect to such
purpose.
(4) PAYMENT SCHEDULE.—The Secretary may enter into an
agreement with the holder of any loan for which payments are
made under the Loan Repayment Program to establish a
schedule for the making of such payments.
(h) EMPLOYMENT CEILING.—Notwithstanding any other provision of law, individuals who have entered into written contracts
with the Secretary under this section, while undergoing academic
or other training, shall not be counted against any employment
ceiling affecting the Department.
OBLIGATED SERVICE

SEC. 338C. ø254m¿ (a) SERVICE IN FULL-TIME CLINICAL PRACTICE.—Except as provided in section 338D, each individual who has
entered into a written contract with the Secretary under section
338A or 338B shall provide service in the full-time clinical practice
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of such individual’s profession as a member of the Corps for the period of obligated service provided in such contract. The Secretary
may treat teaching as clinical practice for up to 20 percent of such
period of obligated service. Notwithstanding the preceding sentence, with respect to a member of the Corps participating in the
teaching health centers graduate medical education program under
section 340H, for the purpose of calculating time spent in full-time
clinical practice under this section, up to 50 percent of time spent
teaching by such member may be counted toward his or her service
obligation.
(b)(1) If an individual is required under subsection (a) to provide service as specified in section 338A(f)(1)(B)(v) or
338B(f)(1)(B)(iv) (hereinafter in this subsection referred to as ‘‘obligated service’’), the Secretary shall, not later than ninety days before the date described in paragraph (5), determine if the individual shall provide such service—
(A) as a member of the Corps who is a commissioned officer in the Regular or Reserve Corps of the Service or who is
a civilian employee of the United States, or
(B) as a member of the Corps who is not such an officer
or employee,
and shall notify such individual of such determination.
(2) If the Secretary determines that an individual shall provide
obligated service as a member of the Corps who is a commissioned
officer in the Service or a civilian employee of the United States,
the Secretary shall, not later than sixty days before the date described in paragraph (5), provide such individual with sufficient information regarding the advantages and disadvantages of service
as such a commissioned officer or civilian employee to enable the
individual to make a decision on an informed basis. To be eligible
to provide obligated service as a commissioned officer in the Service, an individual shall notify the Secretary, not later than thirty
days before the date described in paragraph (5), of the individual’s
desire to provide such service as such an officer. If an individual
qualifies for an appointment as such an officer, the Secretary shall,
as soon as possible after the date described in paragraph (5), appoint the individual as a commissioned officer of the Regular or Reserve Corps of the Service and shall designate the individual as a
member of the Corps.
(3) If an individual provided notice by the Secretary under
paragraph (2) does not qualify for appointment as a commissioned
officer in the Service, the Secretary shall, as soon as possible after
the date described in paragraph (5), appoint such individual as a
civilian employee of the United States and designate the individual
as a member of the Corps.
(4) If the Secretary determines that an individual shall provide
obligated service as a member of the Corps who is not an employee
of the United States, the Secretary shall, as soon as possible after
the date described in paragraph (5), designate such individual as
a member of the Corps to provide such service.
(5)(A) In the case of the Scholarship Program, the date referred
to in paragraphs (1) through (4) shall be the date on which the individual completes the training required for the degree for which
the individual receives the scholarship, except that—
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(i) for an individual receiving such a degree after September 30, 2000, from a school of medicine or osteopathic medicine, such date shall be the date the individual completes a
residency in a specialty that the Secretary determines is consistent with the needs of the Corps; and
(ii) at the request of an individual, the Secretary may, consistent with the needs of the Corps, defer such date until the
end of a period of time required for the individual to complete
advanced training (including an internship or residency).
(B) No period of internship, residency, or other advanced clinical training shall be counted toward satisfying a period of obligated service under this subpart.
(C) In the case of the Loan Repayment Program, if an individual is required to provide obligated service under such Program,
the date referred to in paragraphs (1) through (4)—
(i) shall be the date determined under subparagraph (A) in
the case of an individual who is enrolled in the final year of
a course of study;
(ii) shall, in the case of an individual who is enrolled in an
approved graduate training program in medicine, osteopathic
medicine, dentistry, or other health profession, be the date the
individual completes such training program; and
(iii) shall, in the case of an individual who has a degree
in medicine, osteopathic medicine, dentistry, or other health
profession and who has completed graduate training, be the
date the individual enters into an agreement with the Secretary under section 338B.
(c) An individual shall be considered to have begun serving a
period of obligated service—
(1) on the date such individual is appointed as an officer
in a Regular or Reserve Corps of the Service or is designated
as a member of the Corps under subsection (b)(3) or (b)(4), or
(2) in the case of an individual who has entered into an
agreement with the Secretary under section 338D, on the date
specified in such agreement,
whichever is earlier.
(d) The Secretary shall assign individuals performing obligated
service in accordance with a written contract under the Scholarship
Program to health professional shortage areas in accordance with
sections 331 through 335 and sections 337 and 338. If the Secretary determines that there is no need in a health professional
shortage area (designated under section 332) for a member of the
profession in which an individual is obligated to provide service
under a written contract and if such individual is an officer in the
Service or a civilian employee of the United States, the Secretary
may detail such individual to serve his period of obligated service
as a full-time member of such profession in such unit of the Department as the Secretary may determine.
PRIVATE PRACTICE

SEC. 338D. ø254n¿ (a) The Secretary shall, to the extent permitted by, and consistent with, the requirements of applicable
State law, release an individual from all or part of his service obliJanuary 31, 2023

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gation under section 338C(a) or under section 225 (as in effect on
September 30, 1977) if the individual applies for such a release
under this section and enters into a written agreement with the
Secretary under which the individual agrees to engage for a period
equal to the remaining period of his service obligation in the fulltime private clinical practice (including service as a salaried employee in an entity directly providing health services) of his health
profession—
(1) in the case of an individual who received a scholarship
under the Scholarship Program or a loan repayment under the
Loan Repayment Program and who is performing obligated
service as a member of the Corps in a health professional
shortage area on the date of his application for such a release,
in the health professional shortage area in which such individual is serving on such date or in the case of an individual
for whom a loan payment was made under the Loan Repayment Program and who is performing obligated service as a
member of the Corps in a health professional shortage area on
the date of the application of the individual for such a release,
in the health professional shortage area selected by the Secretary; or
(2) in the case of any other individual, in a health professional shortage area (designated under section 332) selected by
the Secretary.
(b)(1) The written agreement described in subsection (a)
shall—
(A) provide that, during the period of private practice by
an individual pursuant to the agreement, the individual shall
comply with the requirements of section 334 that apply to entities; and
(B) contain such additional provisions as the Secretary
may require to carry out the objectives of this section.
(2) The Secretary shall take such action as may be appropriate
to ensure that the conditions of the written agreement prescribed
by this subsection are adhered to.
(c) If an individual breaches the contract entered into under
section 338A or 338B by failing (for any reason) to begin his service
obligation in accordance with an agreement entered into under subsection (a) or to complete such service obligation, the Secretary
may permit such individual to perform such service obligation as
a member of the Corps.
(d) The Secretary may pay an individual who has entered into
an agreement with the Secretary under subsection (a) an amount
to cover all or part of the individual’s expenses reasonably incurred
in transporting himself, his family, and his possessions to the location of his private clinical practice.
(e) Upon the expiration of the written agreement under subsection (a), the Secretary may (notwithstanding any other provision
of law) sell to the individual who has entered into an agreement
with the Secretary under subsection (a), equipment and other property of the United States utilized by such individual in providing
health services. Sales made under this subsection shall be made at
the fair market value (as determined by the Secretary) of the
equipment or such other property, except that the Secretary may
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Sec. 338E

make such sales for a lesser value to the individual if he determines that the individual is financially unable to pay the full market value.
(f) The Secretary may, out of appropriations authorized under
section 338, pay to individuals participating in private practice
under this section the cost of such individual’s malpractice insurance and the lesser of—
(1)(A) $10,000 in the first year of obligated service;
(B) $7,500 in the second year of obligated service;
(C) $5,000 in the third year of obligated service; and
(D) $2,500 in the fourth year of obligated service; or
(2) an amount determined by subtracting such individual’s
net income before taxes from the income the individual would
have received as a member of the Corps for each such year of
obligated service.
(g) The Secretary shall, upon request, provide to each individual released from service obligation under this section technical
assistance to assist such individual in fulfilling his or her agreement under this section.
BREACH OF SCHOLARSHIP CONTRACT OR LOAN REPAYMENT CONTRACT

SEC. 338E. ø254o¿ (a)(1) An individual who has entered into a
written contract with the Secretary under section 338A and who—
(A) fails to maintain an acceptable level of academic standing in the educational institution in which he is enrolled (such
level determined by the educational institution under regulations of the Secretary);
(B) is dismissed from such educational institution for disciplinary reasons; or
(C) voluntarily terminates the training in such an educational institution for which he is provided a scholarship
under such contract, before the completion of such training,
in lieu of any service obligation arising under such contract, shall
be liable to the United States for the amount which has been paid
to him, or on his behalf, under the contract.
(2) An individual who has entered into a written contract with
the Secretary under section 338B and who—
(A) in the case of an individual who is enrolled in the final
year of a course of study, fails to maintain an acceptable level
of academic standing in the educational institution in which
such individual is enrolled (such level determined by the educational institution under regulations of the Secretary) or voluntarily terminates such enrollment or is dismissed from such
educational institution before completion of such course of
study; or
(B) in the case of an individual who is enrolled in a graduate training program, fails to complete such training program
and does not receive a waiver from the Secretary under section
338B(b)(1)(B)(ii),
in lieu of any service obligation arising under such contract shall
be liable to the United States for the amount that has been paid
on behalf of the individual under the contract.
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(b)(1)(A) Except as provided in paragraph (2), if (for any reason
not specified in subsection (a) or section 338G(d)) an individual
breaches his written contract by failing to begin such individual’s
service obligation under section 338A in accordance with section
338C or 338D, to complete such service obligation, or to complete
a required residency as specified in section 338A(f)(1)(B)(iv), the
United States shall be entitled to recover from the individual an
amount determined in accordance with the formula
A=3ϕ(t¥s/t)

in which ‘‘A’’ is the amount the United States is entitled to recover,
‘‘ϕ’’ is the sum of the amounts paid under this subpart to or on behalf of the individual and the interest on such amounts which
would be payable if at the time the amounts were paid they were
loans bearing interest at the maximum legal prevailing rate, as determined by the Treasurer of the United States; ‘‘t’’ is the total
number of months in the individual’s period of obligated service;
and ‘‘s’’ is the number of months of such period served by him in
accordance with section 338C or a written agreement under section
338D.
(B)(i) Any amount of damages that the United States is entitled to recover under this subsection or under subsection (c) shall,
within the 1-year period beginning on the date of the breach of the
written contract (or such longer period beginning on such date as
specified by the Secretary), be paid to the United States. Amounts
not paid within such period shall be subject to collection through
deductions in Medicare payments pursuant to section 1892 of the
Social Security Act.
(ii) If damages described in clause (i) are delinquent for 3
months, the Secretary shall, for the purpose of recovering such
damages—
(I) utilize collection agencies contracted with by the Administrator of the General Services Administration; or
(II) enter into contracts for the recovery of such damages
with collection agencies selected by the Secretary.
(iii) Each contract for recovering damages pursuant to this subsection shall provide that the contractor will, not less than once
each 6 months, submit to the Secretary a status report on the success of the contractor in collecting such damages. Section 3718 of
title 31, United States Code, shall apply to any such contract to the
extent not inconsistent with this subsection.
(iv) To the extent not otherwise prohibited by law, the Secretary shall disclose to all appropriate credit reporting agencies information relating to damages of more than $100 that are entitled
to be recovered by the United States under this subsection and that
are delinquent by more than 60 days or such longer period as is
determined by the Secretary.
(2) If an individual is released under section 753 from a service
obligation under section 225 (as in effect on September 30, 1977)
and if the individual does not meet the service obligation incurred
under section 753, subsection (f) of such section 225 shall apply to
such individual in lieu of paragraph (1) of this subsection.
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Sec. 338E

(3) The Secretary may terminate a contract with an individual
under section 338A if, not later than 30 days before the end of the
school year to which the contract pertains, the individual—
(A) submits a written request for such termination; and
(B) repays all amounts paid to, or on behalf of, the individual under section 338A(g).
(c)(1) If (for any reason not specified in subsection (a) or section
338G(d)) an individual breaches the written contract of the individual under section 338B by failing either to begin such individual’s service obligation in accordance with section 338C or 338D or
to complete such service obligation, the United States shall be entitled to recover from the individual an amount equal to the sum
of—
(A) the total of the amounts paid by the United States
under section 338B(g) on behalf of the individual for any period
of obligated service not served;
(B) an amount equal to the product of the number of
months of obligated service that were not completed by the individual, multiplied by $7,500; and
(C) the interest on the amounts described in subparagraphs (A) and (B), at the maximum legal prevailing rate, as
determined by the Treasurer of the United States, from the
date of the breach;
except that the amount the United States is entitled to recover
under this paragraph shall not be less than $31,000.
(2) The Secretary may terminate a contract with an individual
under section 338B if, not later than 45 days before the end of the
fiscal year in which the contract was entered into, the individual—
(A) submits a written request for such termination; and
(B) repays all amounts paid on behalf of the individual
under section 338B(g).
(3) Damages that the United States is entitled to recover shall
be paid in accordance with subsection (b)(1)(B).
(d)(1) Any obligation of an individual under the Scholarship
Program (or a contract thereunder) or the Loan Repayment Program (or a contract thereunder) for service or payment of damages
shall be canceled upon the death of the individual.
(2) The Secretary shall by regulation provide for the partial or
total waiver or suspension of any obligation of service or payment
by an individual under the Scholarship Program (or a contract
thereunder) or the Loan Repayment Program (or a contract thereunder) whenever compliance by the individual is impossible or
would involve extreme hardship to the individual and if enforcement of such obligation with respect to any individual would be unconscionable.
(3)(A) Any obligation of an individual under the Scholarship
Program (or a contract thereunder) or the Loan Repayment Program (or a contract thereunder) for payment of damages may be released by a discharge in bankruptcy under title 11 of the United
States Code only if such discharge is granted after the expiration
of the 7-year period beginning on the first date that payment of
such damages is required, and only if the bankruptcy court finds
that nondischarge of the obligation would be unconscionable.
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Sec. 338F

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276

(B)(i) Subparagraph (A) shall apply to any financial obligation
of an individual under the provision of law specified in clause (ii)
to the same extent and in the same manner as such subparagraph
applies to any obligation of an individual under the Scholarship or
Loan Repayment Program (or contract thereunder) for payment of
damages.
(ii) The provision of law referred to in clause (i) is subsection
(f) of section 225 of this Act, as in effect prior to the repeal of such
section by section 408(b)(1) of Public Law 94–484.
(e) Notwithstanding any other provision of Federal or State
law, there shall be no limitation on the period within which suit
may be filed, a judgment may be enforced, or an action relating to
an offset or garnishment, or other action, may be initiated or taken
by the Secretary, the Attorney General, or the head of another Federal agency, as the case may be, for the repayment of the amount
due from an individual under this section.
(f) The amendment made by section 313(a)(4) of the Health
Care Safety Net Amendments of 2002 (Public Law 107–251) shall
apply to any obligation for which a discharge in bankruptcy has not
been granted before the date that is 31 days after the date of enactment of such Act.
SEC. 338F. ø254o–1¿ FUND REGARDING USE OF AMOUNTS RECOVERED
FOR CONTRACT BREACH TO REPLACE SERVICES LOST AS
RESULT OF BREACH.
(a) ESTABLISHMENT OF FUND.—There is established in the

Treasury of the United States a fund to be known as the National
Health Service Corps Member Replacement Fund (hereafter in this
section referred to as the ‘‘Fund’’). The Fund shall consist of such
amounts as may be appropriated under subsection (b) to the Fund.
Amounts appropriated for the Fund shall remain available until expended.
(b) AUTHORIZATION OF APPROPRIATIONS TO FUND.—For each
fiscal year, there is authorized to be appropriated to the Fund an
amount equal to the sum of—
(1) the amount collected during the preceding fiscal year
by the Federal Government pursuant to the liability of individuals under section 338E for the breach of contracts entered
into under section 338A or 338B;
(2) the amount by which grants under section 338I have,
for such preceding fiscal year, been reduced under subsection
(g)(2)(B) of such section; and
(3) the aggregate of the amount of interest accruing during
the preceding fiscal year on obligations held in the Fund pursuant to subsection (d) and the amount of proceeds from the
sale or redemption of such obligations during such fiscal year.
(c) USE OF FUND.—
(1) PAYMENTS TO CERTAIN HEALTH FACILITIES.—Amounts in
the Fund and available pursuant to appropriations Act may,
subject to paragraph (2), be expended by the Secretary to make
payments to any entity—
(A) to which a Corps member has been assigned under
section 333; and
(B) that has a need for a health professional to provide
primary health services as a result of the Corps member
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having breached the contract entered into under section
338A or 338B by the individual.
(2) PURPOSE OF PAYMENTS.—An entity receiving payments
pursuant to paragraph (1) may expend the payments to recruit
and employ a health professional to provide primary health
services to patients of the entity, or to enter into a contract
with such a professional to provide the services to the patients.
(d) INVESTMENT.—
(1) IN GENERAL.—The Secretary of the Treasury shall invest such amounts of the Fund as such Secretary determines
are not required to meet current withdrawals from the Fund.
Such investments may be made only in interest-bearing obligations of the United States. For such purpose, such obligations
may be acquired on original issue at the issue price, or by purchase of outstanding obligations at the market price.
(2) SALE OF OBLIGATIONS.—Any obligation acquired by the
Fund may be sold by the Secretary of the Treasury at the market price.
SPECIAL LOANS FOR FORMER CORPS MEMBERS TO ENTER PRIVATE
PRACTICE

SEC. 338G. ø254p¿ (a) The Secretary may, out of appropriations authorized under section 338, make one loan to a Corps member who has agreed in writing—
(1) to engage in the private full-time clinical practice of the
profession of the member in a health professional shortage
area (designated under section 332) for a period of not less
than 2 years which—
(A) in the case of a Corps member who is required to
complete a period of obligated service under this subpart,
begins not later than 1 year after the date on which such
individual completes such period of obligated service; and
(B) in the case of an individual who is not required to
complete a period of obligated service under this subpart,
begins at such time as the Secretary considers appropriate;
(2) to conduct such practice in accordance with section
338D(b)(1); and
(3) to such additional conditions as the Secretary may require to carry out this section.
Such a loan shall be used to assist such individual in meeting the
costs of beginning the practice of such individual’s profession in accordance with such agreement, including the costs of acquiring
equipment and renovating facilities for use in providing health
services, and of hiring nurses and other personnel to assist in providing health services. Such loan may not be used for the purchase
or construction of any building.
(b)(1) The amount of a loan under subsection (a) to an individual shall not exceed $25,000.
(2) The interest rate for any such loan shall not exceed an annual rate of 5 percent.
(c) The Secretary may not make a loan under this section unless an application therefor has been submitted to, and approved
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by, the Secretary. The Secretary shall, by regulation, set interest
rates and repayment terms for loans under this section.
(d) If the Secretary determines that an individual has breached
a written agreement entered into under subsection (a), he shall, as
soon as practicable after making such determination notify the individual of such determination. If within 60 days after the date of
giving such notice, such individual is not practicing his profession
in accordance with the agreement under such subsection and has
not provided assurances satisfactory to the Secretary that he will
not knowingly violate such agreement again, the United States
shall be entitled to recover from such individual—
(1) in the case of an individual who has received a grant
under this section (as in effect prior to October 1, 1984), an
amount determined under section 338E(b), except that in applying the formula contained in such section ‘‘ϕ’’ shall be the
sum of the amount of the grant made under subsection (a) to
such individual and the interest on such amount which would
be payable if at the time it was paid it was a loan bearing interest at the maximum legal prevailing rate, ‘‘t’’ shall be the
number of months that such individual agreed to practice his
profession under agreement, and ‘‘s’’ shall be the number of
months that such individual practices his profession in accordance with such agreement; and
(2) in the case of an individual who has received a loan
under this section, the full amount of the principal and interest
owed by such individual under this section.
SEC. 338H. ø254q¿ AUTHORIZATION OF APPROPRIATIONS.
(a) AUTHORIZATION OF APPROPRIATIONS.—For the

purpose of
carrying out this section 43, there is authorized to be appropriated,
out of any funds in the Treasury not otherwise appropriated, the
following:
(1) For fiscal year 2010, $320,461,632.
(2) For fiscal year 2011, $414,095,394.
(3) For fiscal year 2012, $535,087,442.
(4) For fiscal year 2013, $691,431,432.
(5) For fiscal year 2014, $893,456,433.
(6) For fiscal year 2015, $1,154,510,336.
(7) For fiscal year 2016, and each subsequent fiscal year,
the amount appropriated for the preceding fiscal year adjusted
by the product of—
(A) one plus the average percentage increase in the
costs of health professions education during the prior fiscal
year; and
(B) one plus the average percentage change in the
number of individuals residing in health professions shortage areas designated under section 333 during the prior
fiscal year, relative to the number of individuals residing
in such areas during the previous fiscal year.
(b) SCHOLARSHIPS FOR NEW PARTICIPANTS.—Of the amounts
appropriated under subsection (a) for a fiscal year, the Secretary

43 The reference to ‘‘this section’’ in section 338H(a) probably should be a reference to ‘‘this
subpart’’.

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Sec. 338I

shall obligate not less than 10 percent for the purpose of providing
contracts for—
(1) scholarships under this subpart to individuals who
have not previously received such scholarships; or
(2) scholarships or loan repayments under the Loan Repayment Program under section 338B to individuals from disadvantaged backgrounds.
(c) SCHOLARSHIPS AND LOAN REPAYMENTS.—With respect to
certification as a nurse practitioner, nurse midwife, or physician
assistant, the Secretary shall, from amounts appropriated under
subsection (a) for a fiscal year, obligate not less than a total of 10
percent for contracts for both scholarships under the Scholarship
Program under section 338A and loan repayments under the Loan
Repayment Program under section 338B to individuals who are entering the first year of a course of study or program described in
section 338A(b)(1)(B) that leads to such a certification or individuals who are eligible for the loan repayment program as specified
in section 338B(b) for a loan related to such certification.
SEC. 338I. ø254q–1¿ GRANTS TO STATES FOR LOAN REPAYMENT PROGRAMS.
(a) IN GENERAL.—
(1) AUTHORITY FOR GRANTS.—The Secretary, acting

through the Administrator of the Health Resources and Services Administration, may make grants to States for the purpose of assisting the States in operating programs described in
paragraph (2) in order to provide for the increased availability
of primary health care services in health professional shortage
areas. The National Advisory Council established under section
337 shall advise the Administrator regarding the program
under this section.
(2) LOAN REPAYMENT PROGRAMS.—The programs referred
to in paragraph (1) are, subject to subsection (c), programs of
entering into contracts under which the State involved agrees
to pay all or part of the principal, interest, and related expenses of the educational loans of health professionals in consideration of the professionals agreeing to provide primary
health services in health professional shortage areas.
(3) DIRECT ADMINISTRATION BY STATE AGENCY.—The Secretary may not make a grant under paragraph (1) unless the
State involved agrees that the program operated with the
grant will be administered directly by a State agency.
(b) REQUIREMENT OF MATCHING FUNDS.—
(1) IN GENERAL.—The Secretary may not make a grant
under subsection (a) unless the State agrees that, with respect
to the costs of making payments on behalf of individuals under
contracts made pursuant to paragraph (2) of such subsection,
the State will make available (directly or through donations
from public or private entities) non-Federal contributions in
cash toward such costs in an amount equal to not less than $1
for each $1 of Federal funds provided in the grant.
(2) DETERMINATION OF AMOUNT OF NON-FEDERAL CONTRIBUTION.—In determining the amount of non-Federal contributions in cash that a State has provided pursuant to paraJanuary 31, 2023

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