[Federal Register Volume 59, Number 38 (Friday, February 25, 1994)]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4257]


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[Federal Register: February 25, 1994]


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Part VII





Department of Education





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34 CFR Part 682




Federal Family Education Loan Program; Proposed Rule
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DEPARTMENT OF EDUCATION

34 CFR Part 682

RIN 1840-AB62

 
Federal Family Education Loan Program

AGENCY: Department of Education.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Secretary proposes to amend the regulations governing the 
Federal Family Education Loan (FFEL) Program. The FFEL Program consists 
of the Federal Stafford, Federal Supplemental Loans for Students (SLS), 
Federal PLUS, and the Federal Consolidation Loan programs. These 
proposed regulations are needed to implement certain changes made to 
the Higher Education Act of 1965, as amended (HEA), by the Higher 
Education Amendments of 1992 (Pub. L. 102-325). Pub. L. 102-325 added 
new section 428J to the HEA which authorizes the Secretary to establish 
a demonstration program for loan forgiveness for certain types of 
professional or public service. Minor changes to section 428J were made 
by the National and Community Service Trust Act of 1993 (Pub. L. 103-
82). Section 428J was also recently amended by the Higher Education 
Technical Amendments of 1993 (Pub. L. 103-208). Those additional 
statutory changes are also reflected in these proposed rules. Under 
section 428J of the HEA, the Secretary is authorized to forgive 
portions of Federal Stafford Loans incurred by a student borrower who 
performs volunteer service or works in certain teaching or nursing 
areas. This program is not currently funded.

DATES: Comments must be received on or before March 28, 1994.

ADDRESSES: All comments concerning these proposed regulations should be 
addressed to Patricia Newcombe, Acting Chief, FFEL Program Section, 
Loans Branch, Division of Policy Development, Policy, Training, and 
Analysis Service, U.S. Department of Education, 400 Maryland Avenue, 
SW., (room 4310, ROB-3), Washington, DC 20202-5449.
    A copy of any comments that concern information collection 
requirements should also be sent to the Office of Management and Budget 
at the address listed in the Paperwork Reduction Act section of the 
preamble.

FOR FURTHER INFORMATION CONTACT: Barbara Bauman, Program Specialist, 
Loans Branch, Division of Policy Development, Policy, Training, and 
Analysis Service, U.S. Department of Education, 400 Maryland Avenue, 
SW., (room 4310, ROB-3), Washington, DC 20202-5449. Telephone: (202) 
708-8242. Individuals who use a telecommunications device for the deaf 
(TDD) may call the Federal Information Relay Service (FIRS) at 1-800-
877-8339 between 8 a.m. and 8 p.m., Eastern time, Monday through 
Friday.

SUPPLEMENTARY INFORMATION:

Background

    New section 428J of the HEA requires the Secretary to promulgate 
regulations to establish a loan forgiveness demonstration program in 
the Federal Stafford Loan Program. The purpose of the demonstration 
program is to encourage individuals to enter the teaching and nursing 
professions and to perform national and community service by offering 
partial Federal Stafford loan forgiveness. The loan forgiveness program 
is available only to new borrowers who, as of October 1, 1989, had no 
outstanding debt on a FFEL Program loan.

Summary of Comments from Regional Meetings

    In compliance with section 492(a) of the HEA, the Secretary 
convened regional meetings during September 1992 to obtain public 
involvement in the development of proposed regulations. The purpose of 
the meetings was to ``provide for a comprehensive discussion and 
exchange of information concerning the implementation'' of certain 
parts of Pub. L. 102-325. In addition, attendees of the regional 
meetings were asked to nominate individuals to act as negotiators in 
the negotiated rulemaking process required by section 492(b) of the 
HEA.
    The regional meetings were conducted for two days each in San 
Francisco, California; New York, New York; Atlanta, Georgia; and Kansas 
City, Missouri. Each participant at the regional meetings was assigned 
to one of six groups which were asked to discuss particular issue areas 
identified by the Department. Each group at the regional meetings 
prepared a report of its discussion and recommendations and those 
reports were presented to the Department for consideration during the 
preparation of the proposed regulations.
    One of the groups at each regional meeting was asked to discuss the 
loan forgiveness demonstration program established by section 428J of 
the HEA. However, none of the groups discussed the program in much 
detail. Each of the groups recommended that the Department implement 
the demonstration program in the same way that the provisions for loan 
cancellation for public service are implemented in the Perkins Loan 
Program. The Department considered these comments in preparing draft 
proposed regulations.

Negotiated Rulemaking

    After completion of the regional meetings, the Department prepared 
draft proposed regulations to implement the provisions of Pub. L. 102-
325 relating to the FFEL Program. In accordance with the requirements 
of section 492(b) of the HEA, those regulations were submitted to a 
negotiated rulemaking process. During the weeks of January 4-8 and 
February 1-5, 1993, the Department met with negotiators selected from 
among individuals nominated by attendees at the regional meetings.
    The discussion below of the proposed regulations reflects those 
areas where the negotiators reached a consensus and the proposed 
regulations reflect that agreement. The discussion below also indicates 
where consensus was not reached during the negotiations. However, the 
negotiators did not choose to discuss every part of the proposed 
regulations. Accordingly, the discussion below of those issues not 
discussed during the negotiations reflects only the views of the 
Secretary.

Proposed Regulations

    The Secretary is proposing to amend 34 CFR part 682 to add a new 
Sec. 682.215 to the regulations. These regulations are being proposed 
if it becomes necessary to implement section 428J of the HEA that 
authorizes a demonstration program under which certain Federal Stafford 
loan borrowers may have a portion of their loan debt forgiven. Under 
the program the Secretary may forgive a percentage of the loan debt 
that accrued on Federal Stafford loans that were borrowed (1) during 
the borrower's last two years of undergraduate education or, (2) for up 
to two academic years, during which the borrower returned to an 
institution of higher education after graduation from an institution of 
higher education to obtain a teaching certificate or additional 
certification. An eligible borrower may have a specific percentage of 
his or her eligible loans forgiven for each year of service performed.

Borrower Eligibility

    Under section 428J of the HEA, the borrower is eligible for loan 
forgiveness if the borrower serves as: (1) A full-time teacher in 
certain elementary and secondary schools teaching certain subjects; (2) 
a full-time nurse in particular types of hospitals or health care 
centers; (3) a volunteer under the Peace Corps Act or under the 
Domestic Volunteer Service Act of 1973; or (4) a full-time employee of 
a tax-exempt organization under section 501(c)(3) of the Internal 
Revenue Code of 1986 who makes below the greater of the minimum wage or 
the poverty line for a family of two. In defining the types of health 
care facilities where an eligible borrower may work, the Secretary 
consulted with staff members of the Department of Health and Human 
Services. Definitions that apply to the teaching category were largely 
extracted from 34 CFR 682.210(q) at the suggestion of the negotiators. 
For the tax-exempt organization service forgiveness category, the 
Secretary is requiring eligible borrowers to work for an organization 
that serves low-income persons and communities to assist in eliminating 
poverty and related conditions. In defining this area of service, the 
Secretary remains consistent with existing deferment provisions for 
full-time volunteer service in the FFEL Program. The Secretary believes 
that loan forgiveness is the more desirable benefit and as such should 
not be given to a borrower who would not otherwise meet the 
requirements for deferment and repayment for the same service. The 
proposed regulations would establish criteria and procedures governing 
the application and eligibility process for the loan forgiveness under 
the demonstration program.
    To qualify for loan forgiveness, a borrower must be in repayment, 
or in an authorized period of deferment or forbearance. During the 
negotiated rulemaking sessions, there was considerable discussion 
surrounding the issue of whether lenders should be required to 
automatically grant administrative forbearance to those borrowers who 
are serving in a capacity that meets the criteria of the new 
Sec. 682.215 (e), (f) or (g) for loan forgiveness. The negotiators felt 
that it was necessary to provide forbearance in cases where a borrower 
does not qualify for a deferment but would seem to qualify for loan 
forgiveness. Although the Secretary recognized at the time that 
borrowers serving in the fields that qualify under Sec. 682.215 may be 
receiving low wages, the Secretary acknowledged that Congress did not 
provide a forbearance or deferment for borrowers in this program in the 
law. However, as a result of changes made by Pub. L. 103-208, the law 
now provides forbearance for borrowers who are engaged in qualifying 
service.
    As recommended by the negotiators, the proposed regulations provide 
that a defaulted borrower is not eligible for loan forgiveness under 
the demonstration program unless the borrower has made satisfactory 
repayment arrangements for the defaulted loan or loans. However, the 
forgiveness would apply only to the loan or loans that are not in 
default.

Application

    The Secretary is proposing that, to qualify for loan forgiveness 
under the demonstration program, a borrower must submit to the 
Secretary or his designee an application and any necessary supporting 
documentation by October 1 of each year following the year served in 
qualifying service as a full-time volunteer, full-time teacher or full-
time nurse. A concern expressed during the negotiated rulemaking 
process was how the Secretary or his designee would accommodate any 
incomplete applications submitted by borrowers by the due date. There 
was no consensus among the negotiators as to whether a borrower who 
does not have complete documentation submitted by the October 1 
deadline should be allowed to later supply the missing documentation. 
The Secretary is interested in receiving public comment as to what is 
an acceptable time-frame in which to inform a borrower that additional 
documentation is needed and to collect the information necessary to 
complete the application.
    The Secretary is proposing to allow borrowers who serve in more 
than one qualifying organization to combine the time served in each 
organization to satisfy the requirement that the borrower be employed 
``full-time.'' The term ``full-time'' is not defined in section 428J of 
the statute. However, the Secretary and the negotiators reached a 
consensus that the term ``full-time,'' for purposes of these 
regulations, be defined as the period of time generally accepted as the 
industry standard for the given profession. It is the duty of the 
authorizing official or officials (in the case of multiple employment 
of the borrower) to certify the borrower's service on the application. 
If a borrower combines employment to meet the full-time employment 
definition, the borrower would be required to obtain a certification 
from each employment facility's authorizing official. The Secretary 
will make a final determination as to whether the borrower's certified 
combined service amounts to full-time. The certification will cover the 
year of service as defined in Sec. 682.215 (e), (f), and (g) for the 
particular service category. A new application and certification is 
required for each year of service that the borrower wishes to apply for 
loan forgiveness.
    The Secretary acknowledges that the statute originally indicated 
that a borrower receiving loan forgiveness based on volunteer service 
could become eligible for loan forgiveness after agreeing in writing to 
volunteer, before service was completed. However, a consensus was 
reached that the statute did not intend to treat borrowers differently 
based on the type of service involved. Pub. L. 103-208 amended section 
428J to be consistent with this approach. Therefore, the proposed 
regulations provide that an eligible borrower may apply for the 
forgiveness only after the year of service is completed.
    The Secretary proposes that once a borrower has met the 
requirements for forgiveness under Sec. 682.215 (e), (f) or (g) the 
borrower will have a percentage of his or her loan forgiven based on 
which year of service has been completed. A borrower who qualifies for 
forgiveness under this demonstration program shall have 15 percent of 
the total amount of Federal Stafford loans incurred during the 
borrower's last two years of undergraduate education forgiven for the 
borrower's service for each of the first two years of service, 20 
percent of the total amount for each third and fourth year of service, 
and 30 percent of such total amount for the fifth year of service.

Limitations

    The Secretary believes that the intent of Congress in enacting 
section 428J was to have the Secretary forgive 100 percent of a 
borrower's loans received for the last 2 years of undergraduate 
education by the end of a borrower's five-year period of service. 
However, the Secretary and the negotiators were compelled at the outset 
to consider the constraints associated with this program, since it is a 
demonstration program with a defined appropriation. The negotiators 
discussed the fact that the program may not have adequate funding to 
provide the full annual forgiveness amounts to all borrowers who 
qualify. The negotiators discussed a number of possible approaches to 
selecting the borrowers who would be allowed to benefit from the 
forgiveness program from among the eligible borrowers if adequate 
funding is not available but did not reach consensus regarding the use 
of a particular approach. However, Pub. L. 103-208 directs the 
Secretary to provide loan forgiveness on a first-come, first-served 
basis subject to the availability of appropriations. Accordingly, the 
Secretary will make a determination on each application as it is 
received and will use a first-come, first-served approach to award loan 
forgiveness in the amounts provided by section 428J of the Act until 
the amount of appropriated funds is exhausted.

Regulatory Flexibility Act Certification

    The Secretary certifies that these proposed regulations would not 
have a significant economic impact on a substantial number of small 
entities. These proposed regulations will only affect a small 
percentage of institutions that participate in the FFEL Program.

Paperwork Reduction Act of 1980

    Section 682.215(c) contains an information collection requirement. 
As required by the Paperwork Reduction Act of 1980, the Department of 
Education will submit a copy of this section to the Office of 
Management and Budget (OMB) for its review. (44 U.S.C. 3504(h))
    Certain Federal Stafford loan borrowers are eligible to apply for 
loan forgiveness under these regulations. The Department needs and uses 
the information provided on the application to determine an 
individual's eligibility for loan forgiveness.
    Annual public reporting and recordkeeping burden for this 
collection of information is estimated to average .25 of an hour per 
response for 2000 respondents, including the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and reviewing the collection of 
information.
    Organizations and individuals desiring to submit comments on the 
information collection requirements should direct them to the Office of 
Information and Regulatory Affairs, room 3002, New Executive Office 
Building, Washington, DC 20503; Attention: Dan Chenok.

Invitation to Comment

    Interested persons are invited to submit comments and 
recommendations regarding these proposed regulations.
    All comments submitted in response to these proposed regulations 
will be available for public inspection, during and after the comment 
period, in room 4310, Regional Office Building 3, 7th and D Streets, 
SW., Washington, DC between the hours of 8:30 a.m. and 4 p.m., Monday 
through Friday of each week except federal holidays.

Assessment of Educational Impact

    The Secretary particularly requests comments on whether the 
proposed regulations in this document would require transmission of 
information that is being gathered by or is available from any other 
agency or authority of the United States.

List of Subjects in 34 CFR Part 682

    Administrative practice and procedure, Colleges and universities, 
Education, Loan programs-education, Reporting and recordkeeping 
requirements, Student aid, Vocational education.

(Catalog of Federal Domestic Assistance Number 84.032, Federal 
Family Education Loan Program)

    Dated: February 17, 1994.
Richard W. Riley,
Secretary of Education.

    The Secretary proposes to amend part 682 of title 34 of the Code of 
Federal Regulations as follows:

PART 682--FEDERAL FAMILY EDUCATION LOAN PROGRAM

    1. The authority citation for part 682 continues to read as 
follows:

    Authority: 20 U.S.C. 1071 to 1087-2, unless otherwise noted.

    2. A new section 682.215 is added to read as follows:


Sec. 682.215  Federal Stafford Loan forgiveness demonstration program.

    (a) General. The Federal Stafford Loan forgiveness demonstration 
program is intended to encourage individuals to enter the teaching and 
nursing professions and to perform national and community service. 
Under this demonstration program, the Secretary repays portions of 
Federal Stafford obligations that were incurred by a borrower during 
the borrower's last two years of undergraduate education if that 
borrower enters those professions or performs that service. For 
purposes of this section, an eligible borrower is a borrower who, prior 
to October 1, 1989, had no outstanding debt under the FFEL programs.
    (b) Borrower eligibility; requirements for qualification. A 
borrower may obtain loan forgiveness under this program if he or she is 
employed as a full-time teacher in certain elementary and secondary 
schools teaching certain subjects or as a full-time nurse in certain 
types of hospitals or health care centers, or is serving as a volunteer 
under the Peace Corps Act or under the Domestic Volunteer Service Act 
of 1973, or is performing comparable service as a full-time employee of 
a tax exempt organization under section 501(c)(3) of the Internal 
Revenue Code of 1986. For purposes of this section, ``full-time'' means 
the standard used by a State or profession in defining full-time 
employment. For a borrower serving in more than one organization, the 
determination of ``full-time'' is based on the combination of all 
qualifying employment. A borrower who is in default on a FFEL loan and 
has not made satisfactory repayment arrangements is not eligible for 
forgiveness. However, if a borrower has made satisfactory repayment 
arrangements on the loan or loans in default, the forgiveness applies 
only to the loan or loans held by the holder that are not in default.
    (c) Application. To qualify for the forgiveness program, an 
eligible borrower shall apply to the Secretary or his designee by 
October 1 of each year in writing on a form and according to procedures 
established by the Secretary following the completed year of service. 
Eligible borrowers will be chosen on a first-come, first-served basis 
to participate and will receive forbearance for each year of service 
for which forgiveness is requested.
    (d) Limitation; Stafford forgiveness recipients. The total amount 
of loans forgiven is limited to the amount of funds appropriated for 
the fiscal year for the demonstration program.
    (e) Borrower eligibility; teaching forgiveness. (1) To qualify for 
teaching loan forgiveness under this section, a borrower must teach 
full-time for a year (as defined by the jurisdiction in which the 
borrower is employed) in a teacher shortage area as certified by the 
authorizing official. For purposes of this paragraph a teacher is 
teaching in a teacher shortage area if--
    (i) The teacher teaches in a school that satisfies the criteria in 
section 465(a)(2)(A) of the Act for loan cancellation for Perkins loan 
recipients who teach in those schools; and
    (ii) The teacher teaches mathematics, science, foreign languages, 
special education, bilingual education or in any other field of 
expertise where the State educational agency determines there is a 
shortage of qualified teachers.
    (2) The borrower, in the time frame provided under paragraph (c) of 
this section, for the first year of service for which forgiveness is 
requested, must provide to the Secretary or his designee--
    (i) A statement by the chief administrative officer of the public 
elementary or secondary school in which the borrower was teaching--
    (A) Certifying the year that the borrower was employed as a full-
time teacher;
    (B) Certifying which subject area listed in paragraph (e)(1)(ii) of 
this section or designated by the state educational agency the borrower 
taught; and
    (C) Verifying that the borrower teaches or taught in a school that 
satisfies the requirements of paragraph (e)(1)(i) of this section.
    (ii) To continue to receive forgiveness in a subsequent year, the 
borrower shall provide the Secretary or his designee with a statement 
by the chief administrative officer of the public elementary or 
secondary school in which the borrower was teaching, certifying--
    (A) The dates of the year of service;
    (B) That the borrower continued to be employed as a full-time 
teacher; and
    (C) That the borrower continued to meet the designated subject area 
and school requirements specified in this section.
    (f) Borrower eligibility; volunteer service forgiveness.
    (1)(i) To qualify for the volunteer service loan forgiveness under 
this paragraph, a borrower must serve as a full-time volunteer for at 
least a year (defined as twelve consecutive months) under--
    (A) The Peace Corps Act; or
    (B) The Domestic Volunteer Service Act of 1973 (ACTION programs); 
or
    (ii) A borrower may also qualify for the volunteer service loan 
forgiveness if the borrower performs service comparable to service 
provided under paragraph (f)(1) of this section as a full-time employee 
of an organization that is exempt from taxation under section 501(c)(3) 
of the Internal Revenue Code of 1986, if the borrower does not receive 
compensation that exceeds the greater of--
    (A) The minimum wage rate described in section 6 of the Fair Labor 
Standards Act of 1938; or
    (B) An amount equal to 100 percent of the poverty line for a family 
of two as defined in section 673(2) of the Community Services Block 
Grant Act.
    (2) To qualify under this paragraph, the borrower must--
    (i) Work for an organization that provides services to low-income 
persons and their communities to assist them in eliminating poverty and 
poverty-related human, social, and environmental conditions; and
    (ii) Not, as part of his or her duties, give religious instruction, 
conduct worship services, engage in religious proselytizing, or engage 
in fund-raising to support religious activities.
    (3) The borrower, for the first year of service for which 
forgiveness is requested under paragraphs (f)(1), (2), or (3) of this 
section must provide to the Secretary or his designee a statement from 
an authorized official of the organization or agency for whom the 
borrower is working certifying--
    (i) That the borrower has served in a job that satisfies the 
requirements of this paragraph;
    (ii) The date on which the borrower's service began; and
    (iii) The date on which the borrower completed the year of service.
    (4) To continue to receive loan forgiveness in a subsequent year 
under this paragraph, the borrower must provide an additional statement 
as described in this paragraph at the end of each additional year of 
service.
    (g) Borrower eligibility; nursing profession loan forgiveness. (1) 
To qualify for the nursing profession loan forgiveness under this 
paragraph, a borrower must be employed as a full-time nurse for a 
public hospital, a rural health clinic, a migrant health center, an 
Indian Health Service Health Center, an Indian Health Center, a Native 
Hawaiian Health Center or for an acute care or long-term care facility.
    (2) To qualify for loan forgiveness under this paragraph, a 
borrower must provide to the Secretary or his designee--
    (i) A statement from an authorized official where the borrower is 
employed certifying that the borrower was employed as a full-time nurse 
for a facility described in this section and served for the term of at 
least one year (defined as twelve consecutive months);
    (ii) The date on which the borrower's service began; and
    (iii) The date on which the borrower's year of service ended.
    (3) To continue to receive the forgiveness in a subsequent year 
under this paragraph, the borrower must provide an additional statement 
as described in this paragraph at the end of each additional year of 
service.
    (h) Forgiveness amounts. (1) The Secretary repays the holder a 
percentage of the total amount of Stafford loans owed by the eligible 
borrower during--
    (i) The borrower's last 2 years of undergraduate education; or
    (ii) The 2 academic years in which a borrower who was not already 
participating in loan repayment pursuant to this section returned to an 
institution of higher education for the purpose of obtaining a post 
graduate teaching certificate or additional teacher certification.
    (2) The Secretary repays loans on the following basis:
    (i) 15 percent of the total original principal amount of Stafford 
loans for the first or second year in which the borrower meets the 
requirements of this section.
    (ii) 20 percent of the total original principal amount for a third 
or fourth year.
    (iii) 30 percent of the total original principal amount for a fifth 
year.
    (3) The Secretary repays the holder for the amount of interest, 
including capitalized interest, which accrued on the loan or loans 
subject to forgiveness over the year.
    (4) The amount of payments made by the Secretary under paragraphs 
(h)(2)(i), (ii), and (iii) of this section may not exceed the sum of 
the outstanding principal balance of the loan or loans subject to 
forgiveness plus all interest payments made in accordance with 
paragraph (h)(3) of this section.
    (5) Payments received from a borrower who qualifies for loan 
forgiveness under this section will not be returned.
    (i) Definitions. The following definitions apply to this section:
    Acute care facility means either a short-term care hospital in 
which the average length of patient stay is less than 30 days, or a 
short-term care hospital in which over 50% of all patients are admitted 
to units where the average length of patient stay is less than 30 days.
    Elementary school means a public day or public residential school 
that provides elementary education, as determined under State law.
    Indian Health Service Health Center means a health care facility 
(whether operated directly by the Indian Health Service or operated by 
a tribal contractor or grantee under the Indian Self-Determination 
Act), that is physically separated from a hospital and that provides 
one or more clinical treatment services, such as physician, dentist or 
nursing services, available at least 40 hours a week for outpatient 
care to persons of Indian or Alaska Native descent.
    Long-term care facility means a facility that offers services 
designed to provide diagnostic, preventive, therapeutic, 
rehabilitative, supportive and maintenance services for individuals who 
have chronic physical or mental impairments. This facility may have a 
variety of institutional and non-institutional health settings, 
including the home, and the goal of the service is to promote the 
optimum level of physical, social and psychological functioning.
    Native Hawaiian Health Center means an entity (as defined in 
section 8 of the Native Hawaiian Health Care Act of 1988 (Pub. L. 100-
579)--
    (1) That is organized under the laws of the State of Hawaii;
    (2) That provides or arranges for health care services through 
practitioners licensed by the State of Hawaii, if licensure 
requirements are applicable;
    (3) That is a public or private nonprofit entity; and
    (4) In which Native Hawaiian health practitioners significantly 
participate in the planning, management, monitoring, and evaluation of 
health services.
    Public hospital means a facility (as defined in 24 CFR 242.1)--
    (1) Owned by a State or unit of local government or by an 
instrumentality thereof, or owned by a public benefit corporation 
established by a State or unit of local government or by an 
instrumentality thereof;
    (2) That provides community services for inpatient medical care of 
the sick or injured (including obstetrical care);
    (3) Where not more than 50 percent of the total patient days during 
any year are customarily assignable to the categories of chronic 
convalescent and rest, drug and alcoholic, epileptic, mentally 
deficient, mental, nervous and mental, and tuberculosis; and
    (4) That is licensed or regulated by the State (or, if there is no 
State law providing for such licensing or regulation by the State, by 
the municipality or other political subdivision in which the facility 
is located).
    Rural Health Clinic means an entity (as defined under section 
1861(aa)(2) of the Social Security Act and in 42 CFR 491.2 that--
    (1) Is primarily engaged in furnishing to outpatients, physicians' 
services and services furnished by a physician assistant or by a nurse 
practitioner, as well as those services and supplies covered under 
sections 1861(s)(2)(A) and 1961(s)(10) of the Social Security Act;
    (2) In the case of a facility that is not a physician-directed 
clinic, has an arrangement (consistent with the provisions of State and 
local law relative to the practice, performance, and delivery of health 
services) with one or more physicians under which provision is made for 
the periodic review by those physicians of covered services furnished 
by physician assistants and nurse practitioners, the supervision and 
guidance by such patients as may be necessary, and the availability of 
those physicians for advice and assistance in the management of medical 
emergencies, and in the case of the physician-directed clinic, has one 
or more of its staff physicians perform the activities accomplished 
through such an arrangement;
    (3) Maintains clinical records on all patients;
    (4) Has arrangements with one or more hospitals, having agreements 
in effect under section 1866 of the Social Security Act, for the 
referral and admission of patients requiring inpatient services or 
diagnostic or other specialized services as are not available at the 
clinic;
    (5) Has written policies, that are developed with the advice of 
(and with provision of review of those policies from time to time by) a 
group of professional personnel, including one or more physicians and 
one or more physician assistants or nurse practitioners, to govern 
those services which it furnishes;
    (6) Has a physician assistant or nurse practitioner responsible for 
the execution of policies described in paragraph (5) of this definition 
and relating to the provision of the clinic's services;
    (7) Directly provides routine diagnostic services, including 
clinical laboratory services, as prescribed in 42 CFR 491.2, and has 
prompt access to additional diagnostic services from facilities meeting 
requirements under title 42;
    (8) In compliance with State and Federal law, has available for 
administering to patients of the clinic at least such drugs and 
biologicals as are determined under 42 CFR 491.2 to be necessary for 
the treatment of emergency cases and has appropriate procedures or 
arrangements for storing, administering, and dispensing any drugs and 
biologicals;
    (9) Has appropriate procedures for review of utilization of clinic 
services to the extent that the Secretary determines to be necessary 
and feasible; and
    (10) Meets other requirements as the Secretary of Health and Human 
Services may find necessary in the interest of the health and safety of 
the individuals who are furnished services by the clinic.
    Secondary school means a public day or public residential school 
that provides secondary education, as determined under State law. In 
the absence of applicable State law, the Secretary may determine, with 
respect to that State, whether the term ``secondary school'' includes 
education beyond the twelfth grade.
    State education agency means the agency or official designated by 
the Governor or by State law as being primarily responsible for the 
State supervision of public elementary and secondary schools.
    Teacher means a professional who provides direct and personal 
services to students for their educational development through 
classroom teaching.

(Authority: 20 U.S.C. 1071 to 1087-2)

[FR Doc. 94-4257 Filed 2-24-94; 8:45 am]
BILLING CODE 4000-01-P