[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: 42CFR60.8]



[Page 322-323]

 

                         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.

    (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.



[[Page 323]]



    (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]