[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: 42CFR60.13]

[Page 320]
 
                         TITLE 42--PUBLIC HEALTH
 
    CHAPTER I--PUBLIC HEALTH SERVICE, DEPARTMENT OF HEALTH AND HUMAN 
                                SERVICES
 
PART 60--HEALTH EDUCATION ASSISTANCE LOAN PROGRAM--Table of Contents
 
                           Subpart C--The Loan
 
Sec. 60.13  Interest.

    (a) Rate. At the lender's option, the interest rate on the HEAL loan 
may be calculated on a fixed rate or on a variable rate basis. However, 
whichever method is selected must continue over the life of the loan, 
except where the loan is consolidated with another HEAL loan.
    (1) For all loans made on or after October 22, 1985, for each 
calendar quarter, the Secretary determines the maximum annual HEAL 
interest rate by determining the average of the bond equivalent rates 
reported for the 91-day U.S. Treasury bills auctioned for the preceding 
calendar quarter, adding 3 percentage points, and rounding that amount 
to the next higher one-eighth of 1 percent.
    (2) Interest that is calculated on a fixed rate basis is determined 
for the life of the loan during the calendar quarter in which the loan 
is executed. It may not exceed the rate determined for that quarter by 
the Secretary under paragraph (a)(1) of this section.
    (3) Interest that is calculated on a variable rate basis varies 
every calendar quarter throughout the life of the loan as the market 
price of U.S. Treasury bills changes. For any quarter it may not exceed 
the rate determined by the Secretary under paragraph (a)(1) of this 
section.
    (4) The Secretary announces the rate determined under paragraph 
(a)(1) of this section on a quarterly basis through a notice published 
in the Federal Register.
    (b) Compounding of interest. Interest accrues from the date the loan 
is disbursed until the loan is paid in full. Unpaid accrued interest 
shall be compounded not more frequently than semiannually and added to 
principal. However, a lender or holder may postpone the compounding of 
interest before the beginning of the repayment period or during periods 
of deferment or forbearance and add interest to principal at the time 
repayment of principal begins or resumes.
    (c) Payment. Repayment of principal and interest is due when the 
repayment period begins. A lender or holder must permit a borrower to 
postpone paying interest before the beginning of the repayment period or 
during a period of deferment or forbearance. In these cases, payment of 
interest begins or resumes on the date repayment of principal begins or 
resumes.
    (d) Usury laws. No provision of any Federal or State law that limits 
the rate or amount of interest payable on loans shall apply to a HEAL 
loan.

[48 FR 38988, Aug. 26, 1983, as amended at 51 FR 30644, Aug. 28, 1986; 
57 FR 28795, June 29, 1992]