§297a — Title 42 The Public Health and Welfare | U.S. Code

Summary

The Secretary can make agreements with public or nonprofit nursing schools in a State to set up and run a student loan fund. Each agreement must create the fund and require certain money to go into it: Federal capital contributions paid under section 297d, at least one-ninth of that amount from other sources, repayments of principal and interest, certain collections under section 297b(f), and any other earnings. The fund can only be used for loans to the school’s students and for costs to collect those loans (except as allowed by section 298d). Loans may go only to students in full‑time or half‑time nursing programs leading to an associate, baccalaureate, equivalent degree, a diploma, or a graduate nursing degree. The agreement must also protect the financial interests of the United States. The Secretary must set rules that measure a school’s failure to collect loans. Schools do not have to repay loans that became uncollectable before 1983. The failure rate is the percentage equal to the defaulted principal outstanding divided by the matured loans. Definitions: default = a borrower misses a required payment or breaks the loan note; defaulted principal outstanding = total borrowed that is in repayment and has not been repaid or cancelled that is in default (120+ days for monthly loans, 180+ days for less frequent loans); grace period = the nine months after a borrower stops full‑ or half‑time study; matured loans = total principal of all loans minus loans to students still enrolled or in their grace period.

Title 42, §297a

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

(a)The Secretary is authorized to enter into an agreement for the establishment and operation of a student loan fund in accordance with this part with any public or nonprofit private school of nursing which is located in a State.

(b)Each agreement entered into under this section shall—

(1)provide for establishment of a student loan fund by the school;

(2)provide for deposit in the fund, except as provided in section 298d of this title, of (A) the Federal capital contributions paid from allotments under section 297d of this title to the school by the Secretary, (B) an additional amount from other sources equal to not less than one-ninth of such Federal capital contributions, (C) collections of principal and interest on loans made from the fund, (D) collections pursuant to section 297b(f) of this title, and (E) any other earnings of the fund;

(3)provide that the fund, except as provided in section 298d of this title, shall be used only for loans to students of the school in accordance with the agreement and for costs of collection of such loans and interest thereon;

(4)provide that loans may be made from such fund only to students pursuing a full-time or half-time course of study at the school leading to a baccalaureate or associate degree in nursing or an equivalent degree or a diploma in nursing, or to a graduate degree in nursing; and

(5)contain such other provisions as are necessary to protect the financial interests of the United States.

(c)(1)Any standard established by the Secretary by regulation for the collection by schools of nursing of loans made pursuant to loan agreements under this part shall provide that the failure of any such school to collect such loans shall be measured in accordance with this subsection. With respect to the student loan fund established pursuant to such agreements, this subsection may not be construed to require such schools to reimburse such loan fund for loans that became uncollectable prior to 1983.

(2)The measurement of a school’s failure to collect loans made under this part shall be the ratio (stated as a percentage) that the defaulted principal amount outstanding of such school bears to the matured loans of such school.

(3)For purposes of this subsection—

(A)the term “default” means the failure of a borrower of a loan made under this part to—

(i)make an installment payment when due; or

(ii)comply with any other term of the promissory note for such loan,

(B)the term “defaulted principal amount outstanding” means the total amount borrowed from the loan fund of a school that has reached the repayment stage (minus any principal amount repaid or cancelled) on loans—

(i)repayable monthly and in default for at least 120 days; and

(ii)repayable less frequently than monthly and in default for at least 180 days;

(C)the term “grace period” means the period of nine months beginning on the date on which the borrower ceases to pursue a full-time or half-time course of study at a school of nursing; and

(D)the term “matured loans” means the total principal amount of all loans made by a school of nursing under this part minus the total principal amount of loans made by such school to students who are—

(i)enrolled in a full-time or half-time course of study at such school; or

(ii)in their grace period.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2010—Subsec. (a). Pub. L. 111–148, § 5310(b)(2), substituted “this part” for “this subpart”. Subsec. (b). Pub. L. 111–148, § 5310(b)(6), substituted “298d” for “297h” in pars. (2) and (3). Subsec. (c). Pub. L. 111–148, § 5310(b)(2), substituted “this part” for “this subpart” wherever appearing. 1988—Subsec. (c)(1). Pub. L. 100–607 inserted provisions relating to reimbursement of student loan fund for certain uncollectable loans. 1985—Subsec. (c). Pub. L. 99–92 added subsec. (c). Subsec. (c)(3)(C). Pub. L. 99–129, § 209(j)(2)(A), substituted provisions defining “grace period” as the period of nine months beginning on the date on which the borrower ceases to pursue a full-time or half-time course of study at a school of nursing for former provisions defining “grace period” as the period of one year beginning on (i) the date on which the borrower ceased to pursue a full-time or half-time course of study at a school of nursing; or (ii) the date on which ended any period described in clause (A) or (B) of section 297b(b)(2) of this title which was applicable to such borrower, whichever was later. Subsec. (c)(3)(D)(ii). Pub. L. 99–129, § 209(j)(2)(B), struck out “first” before “grace period.” 1981—Subsec. (b)(4). Pub. L. 97–35 struck out provisions respecting prohibition on loans to students attending school before Oct. 1, 1980. 1979—Subsec. (b)(4). Pub. L. 96–76 substituted “1980” for “1978”. 1975—Subsec. (a). Pub. L. 94–63, § 941(h)(1), (2), substituted “subpart” for “part” and struck out “of Health, Education, and Welfare” after “Secretary”. Subsec. (b). Pub. L. 94–63, §§ 936(a), 941(h)(3), (i)(2), in cl. (2) substituted “from allotments under section 297d of this title” for “under this part”, in cl. (4) substituted “

October 1, 1978” for “

July 1, 1975”, and in cls. (2) and (3) substituted references to section 836 and 841 of the Act for references to section 823 and 829, which had previously been translated as section 297b and 297h of this title, respectively, requiring no further translations in the text as a result of the renumbering of the Public Health Service Act. 1974—Subsec. (b)(4). Pub. L. 93–385 substituted “1975” for “1974”. 1971—Subsec. (b)(4). Pub. L. 92–158 substituted “full-time or half-time course of study” for “full-time course of study” and “1974” for “1971”. 1968—Subsec. (b)(2). Pub. L. 90–490, § 222(a)(1), (c)(2), inserted “, except as provided in section 297h of this title,” after “fund” where first appearing and added cl. (D) and redesignated former cl. (D) as (E), respectively. Subsec. (b)(3). Pub. L. 90–490, § 222(a)(1), inserted “, except as provided in section 297h of this title” after “fund” where first appearing and authorized the cancellation of an additional 50 per centum of a nursery student loan. Subsec. (b)(4). Pub. L. 90–490, § 222(a)(2), substituted “1971” for “1969”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1985

Amendments

Amendment by Pub. L. 99–129 effective June 30, 1984, see section 228(b)(5) of Pub. L. 99–129, set out as a note under section 254l of this title. Pub. L. 99–92, § 10, Aug. 16, 1985, 99 Stat. 402, provided that: “(a) Except as provided in subsection (b), this Act [enacting section 297i of this title, transferring section 296c to section 298b–5 of this title, amending this section, section 296k, 296l, 296m, 297, 297–1, 297b, 297d, 297e, 298, 298b, and 298b–5 of this title, section 1332, 1333, 1336, and 1341 of Title 15, Commerce and Trade, and section 6103 of Title 26, Internal Revenue Code, repealing sections 296 to 296b, 296d to 296f, 296j, 297h, and 297j of this title, and enacting provisions set out as notes under section 201 and 298b–5 of this title and section 1333 of Title 15] and the

Amendments

and

Repeals

made by this Act shall take effect on

October 1, 1985. “(b)(1) The provisions of section 9(c) of this Act [transferring section 296c of this title to section 298b–5 of this title, amending section 298b–5 of this title, and enacting provisions set out as notes under section 298b–5 of this title] and the amendment made by paragraph (1) of such section shall take effect on the date of enactment of this Act [Aug. 16, 1985]. “(2) The amendment made by section 8(a) of this Act [amending section 297a of this title] shall take effect

June 30, 1984.”

Effective Date

of 1975 Amendment Pub. L. 94–63, title IX, § 905, July 29, 1975, 89 Stat. 355, provided that: “Except as may otherwise be specifically provided, the

Amendments

made by this part [part B (§§ 905–937) of title IX of Pub. L. 94–63, enacting sections 296j to 296m of this title, amending section 296, 296a, 296d, 296e, 297 to 297c, 297e, and 297j of this title, repealing section 296d, 296g, 296i, 297f, and 298c–7 of this title, and enacting provisions set out as notes under section 296, 296a, 296d, 296e, 296m, 297, 297b, and 297f of this title] shall take effect July 1, 1975. The

Amendments

made by this part to provisions of title VIII of the Public Health Service Act [42 U.S.C. 296 et seq.] (hereinafter in this part referred to as the ‘Act’) are made to such provisions as amended by part A of this title [amending section 296, 296d, 296e, 296g, 296i, 297j, and 298c–7 of this title].” Pub. L. 94–63, title IX, § 942, July 29, 1975, 89 Stat. 367, provided that: “The

Amendments

made by section 941 [enacting section 298b–3 of this title, amending sections 296a to 296d, 296f, 297a to 297e, 297g to 297k, 298, and 298b of this title, and repealing section 298c–8 of this title] shall take effect July 1, 1975. Except as otherwise specifically provided, the

Amendments

made by section 941 to provisions of title VIII of the Act [42 U.S.C. 296 et seq.] are made to such provisions as in effect July 1, 1975, and as amended by part B of this title [see note set out above].”

Effective Date

of 1968 AmendmentAmendment by section 222(c)(2) of Pub. L. 90–490 applicable with respect to loans made after June 30, 1969, see section 222(i) of Pub. L. 90–490, set out as a note under section 297b of this title.

§297a Student loan fund

Summary

Title 42, §297a

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