[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: 42CFR57.312]

[Page 280-281]
 
                         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 D--Nursing Student Loans
 
Sec. 57.312  Repayment of loans for service in a shortage area.

    (a) Service in a shortage area. Subject to the availability of 
funds, a person who:
    (1) Has obtained a degree as specified in section 846(a)(1) of the 
Act;
    (2) Has obtained one or more nursing student loans or any other 
loans necessary for costs (including tuition, books, fees, equipment, 
living and other expenses which the Secretary determines were necessary) 
of attending a school of nursing; and
    (3) Enters into an agreement with the Secretary to serve as a full-
time registered nurse for a period of not less than 2 years in an Indian 
Health Service health center, a Native Hawaiian health center, a public 
hospital, a migrant health center, a community health center, a nursing 
facility, a rural health clinic, or in a health facility determined by 
the Secretary to have a critical shortage of nurses, will have a portion 
of these loans repaid by the Secretary in accordance with paragraph (c) 
of this section. Prior to entering an agreement for repayment of loans, 
other than nursing student loans, the Secretary will require that 
satisfactory evidence be provided of the existence and reasonableness of 
the education loans (i.e., a copy of the written loan agreement 
establishing the loan).
    (b) When entering into agreements under paragraph (a) of this 
section, the Secretary shall give priority to:
    (1) Applicants with the greatest financial need; and
    (2) Applicants that, with respect to health facilities described in 
paragraph (a)(3) of this section, agree to serve in such facilities 
located in geographic areas with a shortage of and need for nurses, as 
determined by the Secretary.
    (3) In addition to the priorities under paragraphs (b) (1) and (2) 
of this section, should specific needs warrant, the Secretary may 
establish additional

[[Page 281]]

preferences which will be announced from time to time in the Federal 
Register.
    (c) Repayment. Loan repayment will be made by the Secretary to 
persons who meet the conditions set forth in paragraph (a) of this 
section. Payment will be as follows:
    (1) Upon completion by the borrower of the first year of service as 
specified in the agreement, the Secretary will pay 30 percent of the 
principal of, and the interest on, each loan which was unpaid as of the 
date the borrower began his or her service;
    (2) Upon completion by the borrower of the second year of service, 
the Secretary will pay another 30 percent of the principal of, and the 
interest on, each loan which was unpaid as of the date the borrower 
began his or her service;
    (3) Upon completion by the borrower of a third year of service, the 
Secretary will pay another 25 percent of the principal of, and the 
interest on, each loan which was unpaid as of the date the borrower 
began his or her service; and
    (4) No more than 85 percent of the principal of any loan will be 
paid under this section.

(Approved by the Office of Management and Budget under control number 
0915-0047)

[50 FR 34434, Aug. 23, 1985, as amended at 56 FR 13772, Apr. 4, 1991; 61 
FR 6123, Feb. 16, 1996]