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Title 42 — The Public Health and WelfareRelease 119-73

§292x Distribution of assets from loan funds

Title 42 › Chapter CHAPTER 6A— - PUBLIC HEALTH SERVICE › Subchapter SUBCHAPTER V— - HEALTH PROFESSIONS EDUCATION › Part Part A— - Student Loans › Subpart subpart ii— - federally-supported student loan funds › § 292x

Last updated Apr 6, 2026|Official source

Summary

When a school closes a loan fund or the Secretary ends the agreement for good cause, the fund’s money must be split. First, the Secretary gets an amount equal to the same fraction of the fund balance as the federal money contributed compared with the total of federal and other deposits. The rest goes to the school. After that split, the school must pay the Secretary, at least every three months, the same percentage of any loan payments (principal and interest) it receives that was used to figure the Secretary’s share.

Full Legal Text

Title 42, §292x

The Public Health and Welfare — Source: USLM XML via OLRC

(a)If a school terminates a loan fund established under an agreement pursuant to section 292q(b) of this title, or if the Secretary for good cause terminates the agreement with the school, there shall be a capital distribution as follows:
(1)The Secretary shall first be paid an amount which bears the same ratio to such balance in such fund on the date of termination of the fund as the total amount of the Federal capital contributions to such fund by the Secretary pursuant to section 292q(b)(2)(A) of this title bears to the total amount in such fund derived from such Federal capital contributions and from funds deposited therein pursuant to section 292q(b)(2)(B) of this title.
(2)The remainder of such balance shall be paid to the school.
(b)If a capital distribution is made under subsection (a), the school involved shall, after the capital distribution, pay to the Secretary, not less often than quarterly, the same proportionate share of amounts received by the school in payment of principal or interest on loans made from the loan fund established pursuant to section 292q(b) of this title as was determined by the Secretary under subsection (a).

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 728 of act
July 1, 1944, was classified to section 294a of this title prior to the general revision of this subchapter by Pub. L. 102–408. Another prior section 728 of act
July 1, 1944, was classified to section 293h of this title prior to renumbering by Pub. L. 94–484.

Reference

Citations & Metadata

Citation

42 U.S.C. § 292x

Title 42 — The Public Health and Welfare

Last Updated

Apr 6, 2026

Release point: 119-73