[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: 42CFR60.8]

[Page 315-316]
 
                         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 B--The Borrower
 
Sec. 60.8  What are the borrower's major rights and responsibilities?

    (a) The borrower's rights. (1) Once the terms of the HEAL loan have 
been established, the lender or holder may not change them without the 
borrower's consent.
    (2) The lender must provide the borrower with a copy of the 
completed promissory note when the loan is made. The lender or holder 
must return the original note to the borrower when the loan is paid in 
full.
    (3) A lender must disburse HEAL loan proceeds as described in 
Sec. 60.33(f).
    (4) The lender or holder must provide the borrower with a copy of 
the repayment schedule before repayment begins.
    (5) If the loan is sold from one lender or holder to another lender 
or holder, or if the loan is serviced by a party other than the lender 
or holder, the buyer must notify the borrower within 30 days of the 
transaction.
    (6) The borrower does not have to begin repayment until 9 full 
months after leaving school or an accredited internship or residency 
program as described in Sec. 60.11.

[[Page 316]]

    (7) The borrower is entitled to deferment from repayment of the 
principal and interest installments during periods described in 
Sec. 60.12.
    (8) The borrower may prepay the whole or any portion of the loan at 
any time without penalty.
    (9) The lender or holder must allow the borrower to repay a HEAL 
loan according to a graduated repayment schedule.
    (10) The borrower's total loan obligation is cancelled in the event 
of death or total and permanent disability.
    (11) To assist the borrower in avoiding default, the lender or 
holder may grant the borrower forbearance. Forbearance, including 
circumstances in which the lender or holder must grant forbearance, is 
more fully described in Sec. 60.37.
    (12) Any borrower who received a fixed interest rate HEAL loan in 
excess of 12 percent per year may enter into an agreement with the 
lender which made this loan for the reissuance of the loan in accordance 
with section 739A of the Public Health Service Act.
    (b) The borrower's responsibilities. (1) The borrower must pay any 
insurance premium that the lender may require as more fully described in 
Sec. 60.14.
    (2) The borrower must pay all interest charges on the loan as 
required by the lender or holder.
    (3) The borrower must immediately notify the lender or holder in 
writing in the event of:
    (i) Change of address;
    (ii) Change of name;
    (iii) Failure to enroll in a HEAL school for the period for which 
the loan is intended;
    (iv) Transfer to another school;
    (v) Withdrawal from a HEAL school or change in status to less than 
full-time attendance at a HEAL school;
    (vi) Graduation;
    (vii) Failure to enter into or interruption in an internship or 
residency program; or
    (viii) Change of status that authorizes deferment.
    (4) The borrower must repay the loan in accordance with the 
repayment schedule.
    (5) A borrower may not have a HEAL loan discharged in bankruptcy 
during the first 5 years of the repayment period. This prohibition 
against the discharge of a HEAL loan applies to bankruptcy under any 
chapter of the Bankruptcy Act, including Chapter 13. A borrower may have 
a HEAL loan discharged in bankruptcy after the first 5 years of the 
repayment period only upon a finding by the Bankruptcy Court that the 
non-discharge of such debt would be unconscionable and upon the 
condition that the Secretary shall not have waived his or her rights to 
reduce any Federal reimbursements or Federal payments for health 
services under any Federal law in amounts up to the balance of the loan.
    (6) If the borrower fails to make payments on the loan on time, the 
total amount to be repaid by the borrower may be increased by additional 
interest, late charges, attorney's fees, court costs, and other 
collection charges. In addition, the Secretary may offset amounts 
attributable to an unpaid loan from reimbursements or payment for health 
services provided under any Federal law to a defaulted borrower 
practicing his or her profession.

(Approved by the Office of Management and Budget under control number 
0915-0108)

[48 FR 38988, Aug. 26, 1983, as amended at 52 FR 746, Jan. 8, 1987; 57 
FR 28794, June 29, 1992]