0915-0337 - Section 846 of the PHS Act - Attachment C

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PUBLIC HEALTH SERVICE ACT

Sec. 846

PROCEDURES FOR APPEAL OF TERMINATIONS

SEC. 842. 8 ø297i¿ In any case in which the Secretary intends
to terminate an agreement with a school of nursing under this
part, the Secretary shall provide the school with a written notice
specifying such intention and stating that the school may request
a formal hearing with respect to such termination. If the school requests such a hearing within 30 days after the receipt of such notice, the Secretary shall provide such school with a hearing conducted by an administrative law judge.
LOAN REPAYMENT AND SCHOLARSHIP PROGRAMS

SEC. 846. 9 ø297n¿ (a) IN GENERAL.—In the case of any individual—
(1) who has received a baccalaureate or associate degree in
nursing (or an equivalent degree), a diploma in nursing, or a
graduate degree in nursing;
(2) who obtained (A) one or more loans from a loan fund
established under subpart II 10, or (B) any other educational
loan for nurse training costs; and
(3) who enters into an agreement with the Secretary to
serve as nurse for a period of not less than two years at a
health care facility with a critical shortage of nurses, or in a
accredited school of nursing, as defined by section 801(2), as
nurse faculty;
the Secretary shall make payments in accordance with subsection
(b), for and on behalf of that individual, on the principal of and interest on any loan of that individual described in paragraph (2) of
this subsection which is outstanding on the date the individual begins the service specified in the agreement described in paragraph
(3) of this subsection.
(b) MANNER OF PAYMENTS.—The payments described in subsection (a) shall be made by the Secretary as follows:
(1) Upon completion by the individual for whom the payments are to be made of the first year of the service specified
in the agreement entered into with the Secretary under subsection (a), the Secretary shall pay 30 percent of the principal
of, and the interest on each loan of such individual described
in subsection (a)(2) which is outstanding on the date the individual began such practice.
(2) Upon completion by that individual of the second year
of such service, the Secretary shall pay another 30 percent of
the principal of, and the interest on each such loan.
(3) Upon completion by that individual of a third year of
such service, the Secretary shall pay another 25 percent of the
principal of, and the interest on each such loan.
(c) PAYMENT BY DUE DATE.—Notwithstanding the requirement
of completion of practice specified in subsection (b), the Secretary
shall, on or before the due date thereof, pay any loan or loan in8 There is no section 841 between sections 840 and 842. Section 5310(b)(7) of Public Law 111–
148 redesignates section 841 as section 871. Such amendment also redesignates part F as part
I and transfers part I (as redesignated) to the end of this title.
9 Part E of title VIII does not contain sections 843 through 845.
10 So in law. Probably should read ‘‘this part’’.

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Sec. 846

PUBLIC HEALTH SERVICE ACT

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stallment which may fall due within the period of service for which
the borrower may receive payments under this subsection, upon
the declaration of such borrower, at such times and in such manner
as the Secretary may prescribe (and supported by such other evidence as the Secretary may reasonably require), that the borrower
is then serving as described by subsection (a)(3), and that the borrower will continue to so serve for the period required (in the absence of this subsection) to entitle the borrower to have made the
payments provided by this subsection for such period; except that
not more than 85 percent of the principal of any such loan shall
be paid pursuant to this subsection.
(d) SCHOLARSHIP PROGRAM.—
(1) IN GENERAL.—The Secretary shall (for fiscal years 2003
and 2004) and may (for fiscal years thereafter) carry out a program of entering into contracts with eligible individuals under
which such individuals agree to serve as nurses for a period of
not less than 2 years at a health care facility with a critical
shortage of nurses, in consideration of the Federal Government
agreeing to provide to the individuals scholarships for attendance at schools of nursing.
(2) ELIGIBLE INDIVIDUALS.—In this subsection, the term
‘‘eligible individual’’ means an individual who is enrolled or accepted for enrollment as a full-time or part-time student in a
school of nursing.
(3) SERVICE REQUIREMENT.—
(A) IN GENERAL.—The Secretary may not enter into a
contract with an eligible individual under this subsection
unless the individual agrees to serve as a nurse at a
health care facility with a critical shortage of nurses for a
period of full-time service of not less than 2 years, or for
a period of part-time service in accordance with subparagraph (B).
(B) PART-TIME SERVICE.—An individual may complete
the period of service described in subparagraph (A) on a
part-time basis if the individual has a written agreement
that—
(i) is entered into by the facility and the individual and is approved by the Secretary; and
(ii) provides that the period of obligated service
will be extended so that the aggregate amount of service performed will equal the amount of service that
would be performed through a period of full-time service of not less than 2 years.
(4) APPLICABILITY OF CERTAIN PROVISIONS.—The provisions
of subpart III of part D of title III shall, except as inconsistent
with this section, apply to the program established in paragraph (1) in the same manner and to the same extent as such
provisions apply to the National Health Service Corps Scholarship Program established in such subpart.
(e) PREFERENCES REGARDING PARTICIPANTS.—In entering into
agreements under subsection (a) or (d), the Secretary shall give
preference to qualified applicants with the greatest financial need.
(f) BREACH OF AGREEMENT.—The Secretary may make payments under subsection (a) on behalf of an individual only if the
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PUBLIC HEALTH SERVICE ACT

Sec. 846

agreement under such subsection provides that section 860(c) is applicable to the individual.
(g) BREACH OF AGREEMENT.—
(1) IN GENERAL.—In the case of any program under this
section under which an individual makes an agreement to provide health services for a period of time in accordance with
such program in consideration of receiving an award of Federal
funds regarding education as a nurse (including an award for
the repayment of loans), the following applies if the agreement
provides that this subsection is applicable:
(A) In the case of a program under this section that
makes an award of Federal funds for attending an accredited program of nursing (in this section referred to as a
‘‘nursing program’’), the individual is liable to the Federal
Government for the amount of such award (including
amounts provided for expenses related to such attendance), and for interest on such amount at the maximum
legal prevailing rate, if the individual—
(i) fails to maintain an acceptable level of academic standing in the nursing program (as indicated
by the program in accordance with requirements established by the Secretary);
(ii) is dismissed from the nursing program for disciplinary reasons; or
(iii) voluntarily terminates the nursing program.
(B) The individual is liable to the Federal Government
for the amount of such award (including amounts provided
for expenses related to such attendance), and for interest
on such amount at the maximum legal prevailing rate, if
the individual fails to provide health services in accordance with the program under this section for the period of
time applicable under the program.
(2) WAIVER OR SUSPENSION OF LIABILITY.—In the case of an
individual or health facility making an agreement for purposes
of paragraph (1), the Secretary shall provide for the waiver or
suspension of liability under such subsection if compliance by
the individual or the health facility, as the case may be, with
the agreements involved is impossible, or would involve extreme hardship to the individual or facility, and if enforcement
of the agreements with respect to the individual or facility
would be unconscionable.
(3) DATE CERTAIN FOR RECOVERY.—Subject to paragraph
(2), any amount that the Federal Government is entitled to recover under paragraph (1) shall be paid to the United States
not later than the expiration of the 3-year period beginning on
the date the United States becomes so entitled.
(4) AVAILABILITY.—Amounts recovered under paragraph (1)
with respect to a program under this section shall be available
for the purposes of such program, and shall remain available
for such purposes until expended.
(h) REPORTS.—Not later than 18 months after the date of enactment of the Nurse Reinvestment Act, and annually thereafter,
the Secretary shall prepare and submit to the Congress a report
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Sec. 846A

PUBLIC HEALTH SERVICE ACT

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describing the programs carried out under this section, including
statements regarding—
(1) the number of enrollees, scholarships, loan repayments,
and grant recipients;
(2) the number of graduates;
(3) the amount of scholarship payments and loan repayments made;
(4) which educational institution the recipients attended;
(5) the number and placement location of the scholarship
and loan repayment recipients at health care facilities with a
critical shortage of nurses;
(6) the default rate and actions required;
(7) the amount of outstanding default funds of both the
scholarship and loan repayment programs;
(8) to the extent that it can be determined, the reason for
the default;
(9) the demographics of the individuals participating in the
scholarship and loan repayment programs;
(10) justification for the allocation of funds between the
scholarship and loan repayment programs; and
(11) an evaluation of the overall costs and benefits of the
programs.
(i) ALLOCATIONS.—Of the amounts appropriated under section
871(b),, 11 the Secretary may, as determined appropriate by the
Secretary, allocate amounts between the program under subsection
(a) and the program under subsection (d).
NURSE FACULTY LOAN PROGRAM

SEC. 846A. ø297n–1¿ (a) SCHOOL OF NURSING STUDENT LOAN
FUND.—The Secretary, acting through the Administrator of the
Health Resources and Services Administration, may enter into an
agreement with any accredited school of nursing for the establishment and operation of a student loan fund in accordance with this
section, to increase the number of qualified nursing faculty.
(b) AGREEMENTS.—Each agreement entered into under subsection (a) shall—
(1) provide for the establishment of a student loan fund by
the school involved;
(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 school;
(C) collections of principal and interest on loans made
from the fund; and
(D) any other earnings of the fund;
(3) provide that the fund will be used only for loans to students of the school in accordance with subsection (c) and for
costs of collection of such loans and interest thereon;
(4) provide that loans may be made from such fund only
to students pursuing a full-time course of study or, at the dis11 Two commas are so in law. See amendment made by section 3404(a)(8)(C) of division A of
Public Law 116–136.

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