[Code of Federal Regulations]

[Title 42, Volume 1]

[Revised as of October 1, 2006]

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

[CITE: 42CFR57.213a]



[Page 273-274]

 

                         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



[[Page 274]]



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 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]