1. U.S. Code
  2. title 42
  3. chapter 6A
  4. subchapter VI
  5. part E
  6. § 297a

Collapse to view only § 297a. Student loan fund

§ 297a. Student loan fund
(a) Agreements to establish and operate fund authorized
(b) Provisions of agreementsEach 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) Regulatory standards applicable to collection of loans
(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,
except that a loan made under this part shall not be considered to be in default if the loan is discharged in bankruptcy or if the school reasonably concludes from written contacts with the borrower that the borrower intends to repay the 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.
(July 1, 1944, ch. 373, title VIII, § 835, formerly § 822, as added Pub. L. 88–581, § 2, Sept. 4, 1964, 78 Stat. 913; amended Pub. L. 90–490, title II, § 222(a), (c)(2), Aug. 16, 1968, 82 Stat. 783, 784; Pub. L. 92–158, § 6(d)(3), (e), Nov. 18, 1971, 85 Stat. 478; Pub. L. 93–385, § 3(b), Aug. 23, 1974, 88 Stat. 741; renumbered § 835 and amended Pub. L. 94–63, title IX, §§ 936(a), 941(h)(1)–(3), (i)(1), (2), July 29, 1975, 89 Stat. 362, 365, 366; Pub. L. 96–76, title I, § 109(a), Sept. 29, 1979, 93 Stat. 579; Pub. L. 97–35, title XXVII, § 2757(a), Aug. 13, 1981, 95 Stat. 931; Pub. L. 99–92, § 8(a), Aug. 16, 1985, 99 Stat. 397; Pub. L. 99–129, title II, § 209(j)(2), Oct. 22, 1985, 99 Stat. 536; Pub. L. 100–607, title VII, § 713(a), Nov. 4, 1988, 102 Stat. 3160; Pub. L. 111–148, title V, § 5310(b)(2), (6), Mar. 23, 2010, 124 Stat. 631.)

CITE AS: 42 USC 297a

§ 297b. Loan provisions
(a) Maximum amount per individual per year; preference to first year students
(b) Terms and conditions
Loans from any such student loan fund by any school shall be made on such terms and conditions as the school may determine; subject, however, to such conditions, limitations, and requirements as the Secretary may prescribe (by regulation or in the agreement with the school) with a view to preventing impairment of the capital of such fund to the maximum extent practicable in the light of the objective of enabling the student to complete his course of study; and except that—
(1) such a loan may be made only to a student who (A) is in need of the amount of the loan to pursue 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 a graduate degree in nursing, (B) is capable, in the opinion of the school, of maintaining good standing in such course of study, and (C) with respect to any student enrolling in the school after June 30, 2000, is of financial need (as defined in regulations issued by the Secretary);; 1
1 So in original.
(2) such a loan shall be repayable in equal or graduated periodic installments (with the right of the borrower to accelerate repayment) over the ten-year period which begins nine months after the student ceases to pursue a full-time or half-time course of study at a school of nursing, excluding from such 10-year period all (A) periods (up to three years) of (i) active duty performed by the borrower as a member of a uniformed service, or (ii) service as a volunteer under the Peace Corps Act [22 U.S.C. 2501 et seq.], (B) periods (up to ten years) during which the borrower is pursuing a full-time or half-time course of study at a collegiate school of nursing leading to baccalaureate degree in nursing or an equivalent degree, or to graduate degree in nursing, or is otherwise pursuing advanced professional training in nursing (or training to be a nurse anesthetist), and (C) such additional periods under the terms of paragraph (8) of this subsection;
(3) in the case of a student who received such a loan before September 29, 1995, an amount up to 85 per centum of any such loan made before such date (plus interest thereon) shall be canceled for full-time employment as a professional nurse (including teaching in any of the fields of nurse training and service as an administrator, supervisor, or consultant in any of the fields of nursing) in any public or nonprofit private agency, institution, or organization (including neighborhood health centers), at the rate of 15 per centum of the amount of such loan (plus interest) unpaid on the first day of such service for each of the first, second, and third complete year of such service, and 20 per centum of such amount (plus interest) for each complete fourth and fifth year of such service;
(4) the liability to repay the unpaid balance of such loan and accrued interest thereon shall be canceled upon the death of the borrower, or if the Secretary determines that he has become permanently and totally disabled;
(5) such a loan shall bear interest on the unpaid balance of the loan, computed only for periods during which the loan is repayable, at the rate of 5 percent per anspan;
(6) such a loan shall be made without security or endorsement, except that if the borrower is a minor and the note or other evidence of obligation executed by him would not, under the applicable law, create a binding obligation, either security or endorsement may be required;
(7) no note or other evidence of any such loan may be transferred or assigned by the school making the loan except that, if the borrower transfers to another school participating in the program under this part such note or other evidence of a loan may be transferred to such other school; and
(8) pursuant to uniform criteria established by the Secretary, the repayment period established under paragraph (2) for any student borrower who during the repayment period failed to make consecutive payments and who, during the last 12 months of the repayment period, has made at least 12 consecutive payments may be extended for a period not to exceed 10 years.
(c) Cancellation
(d) Installments
(e) Availability to eligible students in need
(f) Penalty for late payment
(g) Minimum monthly repayment
(h) Loan cancellation
Notwithstanding the amendment made by section 6(b) of the Nurse Training Act of 1971 to this section—
(A) any person who obtained one or more loans from a loan fund established under this part, who before November 18, 1971, became eligible for cancellation of all or part of such loans (including accrued interest) under this section (as in effect on the day before such date), and who on such date was not engaged in a service for which loan cancellation was authorized under this section (as so in effect), may at any time elect to receive such cancellation in accordance with this subsection (as so in effect); and
(B) in the case of any person who obtained one or more loans from a loan fund established under this part and who on such date was engaged in a service for which cancellation of all or part of such loans (including accrued interest) was authorized under this section (as so in effect), this section (as so in effect) shall continue to apply to such person for purposes of providing such loan cancellation until he terminates such service.
(i) Loan repayment
Upon application by a person who received, and is under an obligation to repay, any loan made to such person as a nursing student, the Secretary may undertake to repay (without liability to the applicant) all or any part of such loan, and any interest or portion thereof outstanding thereon, upon his determination, pursuant to regulations establishing criteria therefor, that the applicant—
(1) failed to complete the nursing studies with respect to which such loan was made;
(2) is in exceptionally needy circumstances; and
(3) has not resumed, or cannot reasonably be expected to resume, such nursing studies within two years following the date upon which the applicant terminated the studies with respect to which such loan was made.
(j) Collection by Secretary of loan in default; preconditions and procedures applicable
(k) Elimination of statute of limitation for loan collections
(1) Purpose
(2) Prohibition
(July 1, 1944, ch. 373, title VIII, § 836, formerly § 823, as added Pub. L. 88–581, § 2, Sept. 4, 1964, 78 Stat. 914; amended Pub. L. 89–290, § 4(g)(2), Oct. 22, 1965, 79 Stat. 1058; Pub. L. 90–490, title II, § 222(b), (c)(1), Aug. 16, 1968, 82 Stat. 783, 784; Pub. L. 92–158, § 6(a), (b)(1), (e), Nov. 18, 1971, 85 Stat. 475, 476, 478; renumbered § 836 and amended Pub. L. 94–63, title IX, §§ 936(b), 941(h)(1), (2), (5), (i)(1), July 29, 1975, 89 Stat. 363, 365; Pub. L. 96–76, title I, § 112, Sept. 29, 1979, 93 Stat. 580; Pub. L. 97–35, title XXVII, § 2757(b), Aug. 13, 1981, 95 Stat. 931; Pub. L. 99–92, § 8(b)–(d), Aug. 16, 1985, 99 Stat. 398; Pub. L. 100–607, title VII, §§ 713(b)–(g), 714(a)–(c), Nov. 4, 1988, 102 Stat. 3160, 3161; Pub. L. 101–93, § 5(r), Aug. 16, 1989, 103 Stat. 614; Pub. L. 102–408, title II, § 211(a)(1), Oct. 13, 1992, 106 Stat. 2078; Pub. L. 105–392, title I, § 133(a)–(c)(1), Nov. 13, 1998, 112 Stat. 3575; Pub. L. 111–148, title V, §§ 5202, 5310(b)(2)–(4), Mar. 23, 2010, 124 Stat. 607, 631.)

CITE AS: 42 USC 297b

§ 297c. Repealed. Pub. L. 105–392, title I, § 123(3), Nov. 13, 1998, 112 Stat. 3562

CITE AS: 42 USC 297c

§ 297c–1. Repealed. Pub. L. 102–408, title II, § 211(a)(2), Oct. 13, 1992, 106 Stat. 2078

CITE AS: 42 USC 297c-1

§ 297d. Allotments and payments of Federal capital contributions
(a) Application for allotment; reduction or adjustment of amount requested in application; reallotment; continued availability of funds
(1) The Secretary shall from time to time set dates by which schools of nursing must file applications for Federal capital contributions.
(2)
(A) If the total of the amounts requested for any fiscal year in such applications exceeds the total amount appropriated under section 297c 1
1 See References in Text note below.
of this title for that fiscal year, the allotment from such total amount to the loan fund of each school of nursing shall be reduced to whichever of the following is the smaller:
(i) The amount requested in its application.
(ii) An amount which bears the same ratio to the total amount appropriated as the number of students estimated by the Secretary to be enrolled on a full-time basis in such school during such fiscal year bears to the estimated total number of students enrolled in all such schools on a full-time basis during such year.
(B) Amounts remaining after allotment under subparagraph (A) shall be reallotted in accordance with clause (ii) of such subparagraph among schools whose applications requested more than the amounts so allotted to their loan funds, but with such adjustments as may be necessary to prevent the total allotted to any such school’s loan fund under this paragraph and paragraph (3) from exceeding the total so requested by it.
(3) Funds which, pursuant to section 297e(c) of this title or pursuant to a loan agreement under section 297a of this title are returned to the Secretary in any fiscal year, shall be available for allotment until expended. Funds described in the preceding sentence shall be allotted among schools of nursing in such manner as the Secretary determines will best carry out this part.
(b) Installment payment of allotments
(c) Manner of payment
(July 1, 1944, ch. 373, title VIII, § 838, formerly § 825, as added Pub. L. 88–581, § 2, Sept. 4, 1964, 78 Stat. 915; amended Pub. L. 89–751, § 6(c), Nov. 3, 1966, 80 Stat. 1235; Pub. L. 90–490, title II, § 222(e), Aug. 16, 1968, 82 Stat. 785; renumbered § 838 and amended Pub. L. 94–63, title IX, § 941(h)(1), (2), (4)(A), (i)(1), (4), July 29, 1975, 89 Stat. 365, 366; Pub. L. 99–92, § 8(e), Aug. 16, 1985, 99 Stat. 398; Pub. L. 100–607, title VII, § 713(h)(1), Nov. 4, 1988, 102 Stat. 3161; Pub. L. 102–408, title II, § 208(a), Oct. 13, 1992, 106 Stat. 2075; Pub. L. 111–148, title V, § 5310(b)(2), Mar. 23, 2010, 124 Stat. 631.)

CITE AS: 42 USC 297d

§ 297e. Distribution of assets from loan funds
(a) Capital distribution of balance of loan fund
If a school terminates a loan fund established under an agreement pursuant to section 297a(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 297a(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 297a(b)(2)(B) of this title.
(2) The remainder of such balance shall be paid to the school.
(b) Payment of principal or interest on loans
(c) Payment of balance of loan fund
(1) Within 90 days after the termination of any agreement with a school under section 297a of this title or the termination in any other manner of a school’s participation in the loan program under this part,1
1 See References in Text note below.
such school shall pay to the Secretary from the balance of the loan fund of such school established under section 297a of this title, an amount which bears the same ratio to the balance in such fund on the date of such termination as the total amount of the Federal capital contributions to such fund by the Secretary pursuant to section 297a(b)(2)(A) of this title bears to the total amount in such fund on such date derived from such Federal capital contributions and from funds deposited in the fund pursuant to section 297a(b)(2)(B) of this title. The remainder of such balance shall be paid to the school.
(2) A school to which paragraph (1) applies shall pay to the Secretary after the date on which payment is made under such paragraph and not less than quarterly, the same proportionate share of amounts received by the school after the date of termination referred to in paragraph (1) in payment of principal or interest on loans made from the loan fund as was determined for the Secretary under such paragraph.
(July 1, 1944, ch. 373, title VIII, § 839, formerly § 826, as added Pub. L. 88–581, § 2, Sept. 4, 1964, 78 Stat. 916; amended Pub. L. 89–751, § 6(d), Nov. 3, 1966, 80 Stat. 1235; Pub. L. 90–490, title II, § 222(f), Aug. 16, 1968, 82 Stat. 785; Pub. L. 92–52, § 3(b), July 9, 1971, 85 Stat. 145; Pub. L. 92–158, § 6(d)(1), Nov. 18, 1971, 85 Stat. 478; renumbered § 839 and amended Pub. L. 94–63, title IX, §§ 936(d), 941(h)(1), (2), (4)(B), (i)(1), (5), July 29, 1975, 89 Stat. 363, 365, 366; Pub. L. 96–32, § 7(j), July 10, 1979, 93 Stat. 84; Pub. L. 96–76, title I, § 109(c), Sept. 29, 1979, 93 Stat. 580; Pub. L. 97–35, title XXVII, § 2757(d), Aug. 13, 1981, 95 Stat. 931; Pub. L. 99–92, § 8(f), Aug. 16, 1985, 99 Stat. 399; Pub. L. 100–607, title VII, § 713(i), Nov. 4, 1988, 102 Stat. 3161; Pub. L. 102–408, title II, § 208(b), Oct. 13, 1992, 106 Stat. 2075; Pub. L. 105–392, title I, § 133(e), Nov. 13, 1998, 112 Stat. 3577; Pub. L. 111–148, title V, § 5310(b)(5), Mar. 23, 2010, 124 Stat. 631.)

CITE AS: 42 USC 297e

§ 297f. Repealed. Pub. L. 94–63, title IX, § 936(e)(1), July 29, 1975, 89 Stat. 363

CITE AS: 42 USC 297f

§ 297g. Modification of agreements; compromise, waiver or release

The Secretary may agree to modifications of agreements made under this part, and may compromise, waive, or release any right, title, claim, or demand of the United States arising or acquired under this part.

(July 1, 1944, ch. 373, title VIII, § 840, formerly § 828, as added Pub. L. 88–581, § 2, Sept. 4, 1964, 78 Stat. 917; renumbered § 840 and amended Pub. L. 94–63, title IX, § 941(h)(1), (4)(C), (i)(1), July 29, 1975, 89 Stat. 365; Pub. L. 111–148, title V, § 5310(b)(2), Mar. 23, 2010, 124 Stat. 631.)

CITE AS: 42 USC 297g

§ 297h. Repealed. Pub. L. 99–92, § 9(a)(1), Aug. 16, 1985, 99 Stat. 400

CITE AS: 42 USC 297h

§ 297i. Procedures for appeal of terminations

In any case in which the Secretary intends to terminate an agreement with a school of nursing under this part, the Secretary shall provide the school with a written notice specifying such intention and stating that the school may request a formal hearing with respect to such termination. If the school requests such a hearing within 30 days after the receipt of such notice, the Secretary shall provide such school with a hearing conducted by an administrative law judge.

(July 1, 1944, ch. 373, title VIII, § 842, as added Pub. L. 99–92, § 8(g), Aug. 16, 1985, 99 Stat. 399; amended Pub. L. 111–148, title V, § 5310(b)(2), Mar. 23, 2010, 124 Stat. 631.)

CITE AS: 42 USC 297i

§ 297n. Loan repayment and scholarship programs
(a) In generalIn the case of any individual—
(1) who has received a baccalaureate or associate degree in nursing (or an equivalent degree), a diploma in nursing, or a graduate degree in nursing;
(2) who obtained (A) one or more loans from a loan fund established under subpart II,1
1 See References in Text note below.
or (B) any other educational loan for nurse training costs; and
(3) who enters into an agreement with the Secretary to serve as nurse for a period of not less than two years at a health care facility with a critical shortage of nurses, or in a 2
2 So in original. Probably should be “an”.
accredited school of nursing, as defined by section 296(2) of this title, as nurse faculty;
the Secretary shall make payments in accordance with subsection (b), for and on behalf of that individual, on the principal of and interest on any loan of that individual described in paragraph (2) of this subsection which is outstanding on the date the individual begins the service specified in the agreement described in paragraph (3) of this subsection.
(b) Manner of paymentsThe payments described in subsection (a) shall be made by the Secretary as follows:
(1) Upon completion by the individual for whom the payments are to be made of the first year of the service specified in the agreement entered into with the Secretary under subsection (a), the Secretary shall pay 30 percent of the principal of, and the interest on each loan of such individual described in subsection (a)(2) which is outstanding on the date the individual began such practice.
(2) Upon completion by that individual of the second year of such service, the Secretary shall pay another 30 percent of the principal of, and the interest on each such loan.
(3) Upon completion by that individual of a third year of such service, the Secretary shall pay another 25 percent of the principal of, and the interest on each such loan.
(c) Payment by due date
(d) Scholarship program
(1) In general
(2) Eligible individuals
(3) Service requirement
(A) In general
(B) Part-time serviceAn individual may complete the period of service described in subparagraph (A) on a part-time basis if the individual has a written agreement that—
(i) is entered into by the facility and the individual and is approved by the Secretary; and
(ii) provides that the period of obligated service will be extended so that the aggregate amount of service performed will equal the amount of service that would be performed through a period of full-time service of not less than 2 years.
(4) Applicability of certain provisions
(e) Preferences regarding participants
(f) Condition of agreement
(g) Breach of agreement
(1) In generalIn the case of any program under this section under which an individual makes an agreement to provide health services for a period of time in accordance with such program in consideration of receiving an award of Federal funds regarding education as a nurse (including an award for the repayment of loans), the following applies if the agreement provides that this subsection is applicable:
(A) In the case of a program under this section that makes an award of Federal funds for attending an accredited program of nursing (in this section referred to as a “nursing program”), the individual is liable to the Federal Government for the amount of such award (including amounts provided for expenses related to such attendance), and for interest on such amount at the maximum legal prevailing rate, if the individual—
(i) fails to maintain an acceptable level of academic standing in the nursing program (as indicated by the program in accordance with requirements established by the Secretary);
(ii) is dismissed from the nursing program for disciplinary reasons; or
(iii) voluntarily terminates the nursing program.
(B) The individual is liable to the Federal Government for the amount of such award (including amounts provided for expenses related to such attendance), and for interest on such amount at the maximum legal prevailing rate, if the individual fails to provide health services in accordance with the program under this section for the period of time applicable under the program.
(2) Waiver or suspension of liability
(3) Date certain for recovery
(4) Availability
(h) ReportsNot later than 18 months after August 1, 2002, and annually thereafter, the Secretary shall prepare and submit to the Congress a report describing the programs carried out under this section, including statements regarding—
(1) the number of enrollees, scholarships, loan repayments, and grant recipients;
(2) the number of graduates;
(3) the amount of scholarship payments and loan repayments made;
(4) which educational institution the recipients attended;
(5) the number and placement location of the scholarship and loan repayment recipients at health care facilities with a critical shortage of nurses;
(6) the default rate and actions required;
(7) the amount of outstanding default funds of both the scholarship and loan repayment programs;
(8) to the extent that it can be determined, the reason for the default;
(9) the demographics of the individuals participating in the scholarship and loan repayment programs;
(10) justification for the allocation of funds between the scholarship and loan repayment programs; and
(11) an evaluation of the overall costs and benefits of the programs.
(i) Allocations
(July 1, 1944, ch. 373, title VIII, § 846, as added Pub. L. 102–408, title II, § 211(a)(3), Oct. 13, 1992, 106 Stat. 2078; amended Pub. L. 105–392, title I, § 133(d), Nov. 13, 1998, 112 Stat. 3576; Pub. L. 107–205, title I, § 103, Aug. 1, 2002, 116 Stat. 813; Pub. L. 111–148, title V, § 5310(a), Mar. 23, 2010, 124 Stat. 631; Pub. L. 116–136, div. A, title III, § 3404(a)(8), Mar. 27, 2020, 134 Stat. 394.)

CITE AS: 42 USC 297n

§ 297n–1. Nurse faculty loan program
(a) School of nursing student loan fund
(b) AgreementsEach agreement entered into under subsection (a) shall—
(1) provide for the establishment of a student loan fund by the school involved;
(2) provide for deposit in the fund of—
(A) the Federal capital contributions to the fund;
(B) an amount equal to not less than one-ninth of such Federal capital contributions, contributed by such school;
(C) collections of principal and interest on loans made from the fund; and
(D) any other earnings of the fund;
(3) provide that the fund will be used only for loans to students of the school in accordance with subsection (c) 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 course of study or, at the discretion of the Secretary, a part-time course of study in an advanced degree program described in section 296j(b) of this title; and
(5) contain such other provisions as are necessary to protect the financial interests of the United States.
(c) Loan provisionsLoans from any student loan fund established by a school pursuant to an agreement under subsection (a) shall be made to an individual on such terms and conditions as the school may determine, except that—
(1) such terms and conditions are subject to any conditions, limitations, and requirements prescribed by the Secretary;
(2) in the case of any individual, the total of the loans for any academic year made by schools of nursing from loan funds established pursuant to agreements under subsection (a) may not exceed $35,500,1
1 So in original. The comma probably should not appear.
during fiscal years 2010 and 2011 fiscal years 2
2 So in original.
(after fiscal year 2011, such amounts shall be adjusted to provide for a cost-of-attendance increase for the yearly loan rate and the aggregate loan; 3
3 So in original. A closing parenthesis probably should appear before the semicolon.
(3) an amount up to 85 percent of any such loan (plus interest thereon) shall be canceled by the school as follows:
(A) upon completion by the individual of each of the first, second, and third year of full-time employment, required by the loan agreement entered into under this subsection, as a faculty member in an accredited a 4
4 So in original. The word “a” probably should not appear.
school of nursing, the school shall cancel 20 percent of the principle 5
5 So in original. Probably should be “principal”.
of, and the interest on, the amount of such loan unpaid on the first day of such employment; and
(B) upon completion by the individual of the fourth year of full-time employment, required by the loan agreement entered into under this subsection, as a faculty member in a school of nursing, the school shall cancel 25 percent of the principle 5 of, and the interest on, the amount of such loan unpaid on the first day of such employment;
(4) such a loan may be used to pay the cost of tuition, fees, books, laboratory expenses, and other reasonable education expenses;
(5) such a loan shall be repayable in equal or graduated periodic installments (with the right of the borrower to accelerate repayment) over the 10-year period that begins 9 months after the individual ceases to pursue a course of study at a school of nursing; and
(6) such a loan shall—
(A) beginning on the date that is 3 months after the individual ceases to pursue a course of study at a school of nursing, bear interest on the unpaid balance of the loan at the rate of 3 percent per anspan; or
(B) subject to subsection (e), if the school of nursing determines that the individual will not complete such course of study or serve as a faculty member as required under the loan agreement under this subsection, bear interest on the unpaid balance of the loan at the prevailing market rate.
(d) Payment of proportionate share
(e) Review by Secretary
(July 1, 1944, ch. 373, title VIII, § 846A, as added Pub. L. 107–205, title II, § 203, Aug. 1, 2002, 116 Stat. 817; amended Pub. L. 111–148, title V, § 5311(a), Mar. 23, 2010, 124 Stat. 631; Pub. L. 116–136, div. A, title III, § 3404(a)(9), Mar. 27, 2020, 134 Stat. 394; Pub. L. 116–260, div. BB, title III, § 331(c), Dec. 27, 2020, 134 Stat. 2938.)

CITE AS: 42 USC 297n-1

§ 297o. Eligible individual student loan repayment
(a) In general
(b) AgreementsEach agreement entered into under this subsection shall require that the eligible individual shall serve as a full-time member of the faculty of an accredited school of nursing, for a total period, in the aggregate, of at least 4 years during the 6-year period beginning on the later of—
(1) the date on which the individual receives a master’s or doctorate nursing degree from an accredited school of nursing; or
(2) the date on which the individual enters into an agreement under this subsection.
(c) Agreement provisionsAgreements entered into pursuant to subsection (b) shall be entered into on such terms and conditions as the Secretary may determine, except that—
(1) not more than 10 months after the date on which the 6-year period described under subsection (b) begins, but in no case before the individual starts as a full-time member of the faculty of an accredited school of nursing 1
1 So in original. Probably should be followed by a comma.
the Secretary shall begin making payments, for and on behalf of that individual, on the outstanding principal of, and interest on, any loan of that individual obtained to pay for such degree;
(2) for an individual who has completed a master’s in nursing or equivalent degree in nursing—
(A) payments may not exceed $10,000 per calendar year; and
(B) total payments may not exceed $40,000 during the 2010 and 2011 fiscal years (after fiscal year 2011, such amounts shall be adjusted to provide for a cost-of-attendance increase for the yearly loan rate and the aggregate loan); and
(3) for an individual who has completed a doctorate or equivalent degree in nursing—
(A) payments may not exceed $20,000 per calendar year; and
(B) total payments may not exceed $80,000 during the 2010 and 2011 fiscal years (adjusted for subsequent fiscal years as provided for in the same manner as in paragraph (2)(B)).
(d) Breach of agreement
(1) In general
(2) Waiver or suspension of liability
(3) Date certain for recovery
(4) Availability
(e) Eligible individual definedFor purposes of this section, the term “eligible individual” means an individual who—
(1) is a United States citizen, national, or lawful permanent resident;
(2) holds an unencumbered license as a registered nurse; and
(3) has either already completed a master’s or doctorate nursing program at an accredited school of nursing or is currently enrolled on a full-time or part-time basis in such a program.
(f) Priority
(July 1, 1944, ch. 373, title VIII, § 847, as added Pub. L. 111–148, title V, § 5311(b), Mar. 23, 2010, 124 Stat. 632; amended Pub. L. 116–136, div. A, title III, § 3404(a)(10), Mar. 27, 2020, 134 Stat. 394.)

CITE AS: 42 USC 297o