[Code of Federal Regulations]
[Title 42, Volume 1]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR57.213a]

[Page 267-268]
 
                         TITLE 42--PUBLIC HEALTH
 
    CHAPTER I--PUBLIC HEALTH SERVICE, DEPARTMENT OF HEALTH AND HUMAN 
                                SERVICES
 
PART 57--GRANTS FOR CONSTRUCTION OF TEACHING FACILITIES, EDUCATIONAL IMPROVEMENTS, SCHOLARSHIPS AND STUDENT LOANS--Table of Contents
 
               Subpart C--Health Professions Student Loans
 
Sec. 57.213a  Loan cancellation reimbursement.

    (a) For loans made prior to October 22, 1985, in the event that 
insufficient funds are available to the Secretary in any fiscal year to 
enable him or her to pay to all schools their proportionate shares of 
all loans and interest canceled under this subpart for practice in a 
shortage area, death, or disability:
    (1) Each school will be paid an amount bearing the same ratio to the 
total of the funds available for that purpose as the principal of loans 
canceled by that school in that fiscal year bears to the total principal 
of loans canceled by all schools in that year; and
    (2) Any additional amounts to which a school is entitled will be 
paid by the Secretary at the time of distribution of the assets of the 
school's Fund under section 728 of the Act.
    (b) For loans made on or after October 22, 1985, a school may assess 
the borrower a charge to insure against the loss of the institutional 
share of a loan canceled due to the borrower's death or permanent and 
total disability. The school must develop annually a rate

[[Page 268]]

which reflects its cancellation experience. This charge shall not exceed 
.6 percent of the loan amount. Funds collected under this provision must 
be maintained by the school in an insured, interest-bearing account 
(with any earned interest credited to this insurance fund), and used 
only to reimburse the school for the institutional share of any HPSL 
loan made on or after October 22, 1985, that is canceled due to the 
borrower's death or permanent and total disability. A school is not 
required to establish a separate bank account, but is required to 
maintain separate accountability.

[53 FR 46549, Nov. 17, 1988, as amended at 56 FR 19294, Apr. 26, 1991; 
57 FR 45734, Oct. 5, 1992; 61 FR 6123, Feb. 16, 1996]