[Code of Federal Regulations]

[Title 42, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR60.13]



[Page 326-327]

 

                         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.



[[Page 327]]



    (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]