[Federal Register Volume 60, Number 40 (Wednesday, March 1, 1995)]
[Notices]
[Pages 11101-11104]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4964]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Resources and Services Administration


Program Announcement for Contracts for the Disadvantaged Health 
Professions Faculty Loan Repayment Program for Fiscal Year 1995

    The Health Resources and Services Administration (HRSA) announces 
that applications for contracts for fiscal year (FY) 1995, for the 
Disadvantaged Health Professions Faculty Loan Repayment Program (FLRP) 
are now being accepted under section 738(a) of the Public Health 
Service Act (The Act).
    In FY 1995, approximately $823,000 is available for competing 
applications for the Disadvantaged Health Professions Faculty Loan 
Repayment Program. It is expected that 30 contracts averaging $27,433 
($13,717 per year for two years) will be supported with these funds.

Previous Funding Experience

    Previous funding experience information is provided to assist 
potential applicants to make better informed decisions regarding 
submission of an application for this program. In fiscal years 1991, 
1992, 1993 and 1994, HRSA entered into a total of 129 contracts under 
this program, averaging $25,030 ($12,515 per year for 2 years).

Purpose

    The purpose of the Disadvantaged Health Professions Faculty Loan 
Repayment Program (FLRP) is to attract disadvantaged health professions 
faculty members for accredited health professions schools. The program 
provides a financial incentive for degree-trained health professions 
personnel from disadvantaged backgrounds who will serve as members of 
the faculties of those schools. The FLRP is directed at those 
individuals available to serve immediately or within a short time as 
``new'' full-time faculty members. Loan repayment may be provided only 
for an individual who has not been a member of the faculty of any 
school at any time during the 18-month period preceding the date on 
which the Secretary receives the request of the individual for a 
repayment contract (i.e., ``new'' faculty).
    Section 738(b) makes available grants and contracts with schools of 
medicine, osteopathic medicine, dentistry, veterinary medicine, 
optometry, podiatric medicine, pharmacy, public health, health 
administration, clinical psychology and other public or private 
nonprofit health or educational entities to assist in increasing the 
number of underrepresented minority faculty. Section 738(b) will be 
implemented as a separate program.

Eligible Individuals

    Individuals from disadvantaged backgrounds are eligible to compete 
for participation in the FLRP if they:
    1. Have degrees in medicine, osteopathic medicine, dentistry, 
nursing, pharmacy, podiatric medicine, optometry, veterinary medicine, 
public health or clinical psychology; or
    2. Are enrolled in an approved graduate training program in one of 
the health professions listed above; or
    3. Are enrolled as full-time students in the final year of health 
professions training, leading to a degree from an eligible school.
    Established faculty members are not eligible to apply for funds 
under the FLRP. Only individuals that have not taught in the last 18 
(eighteen) months prior to application to the program will be 
considered.

Statutory Requirements

    Prior to submitting an application for a contract for loan 
repayment, individuals must sign a contract with an eligible school, as 
prescribed by the Secretary, setting forth the terms and conditions of 
the FLRP. This contract with the school must require the individual to 
serve as a full-time member of the faculty, as determined by the 
school, for not less than 2 years, whereby the school agrees to pay, 
for each year, a sum (in addition to faculty salary) equal to that paid 
by the Secretary towards the repayment of principal due on the 
applicant's health professions educational loans. Additionally, the 
individual involved may not have been a member of the faculty of any 
school at any time during the last 18 months prior to application to 
the program.

Eligible Schools

    Eligible schools are public or nonprofit private accredited schools 
of medicine, nursing, as defined in section 853 of the Act, osteopathic 
medicine, dentistry, pharmacy, podiatric medicine, optometry, 
veterinary medicine or public health, or schools that offer graduate 
programs in clinical psychology and which are located in States as 
provided in section 799 of the Act.

Provisions of the Loan Repayment Program

    Section 738(a) authorizes repayment, for any year for which 
repayments are made, not to exceed 20 percent of the outstanding 
principal and interest on [[Page 11102]] the individual's educational 
loans. Of the repayment, the Secretary pays half, up to $20,000. The 
school pays an equal amount, unless the Secretary determines that the 
repayment will impose an undue financial hardship on the school in 
which case,the Secretary may pay up to the entire 20 percent.
    The school is required, for each such year, to make payments of 
principal and interest in an amount equal to the amount of payment made 
by the Secretary for that year. These payments must be in addition to 
the faculty salary the participant otherwise would receive.
    Allowable educational loan repayment expenses include the 
following:
    1. Tuition expenses;
    2. All other reasonable educational expenses such as fees, books, 
supplies, educational equipment and materials required by the school, 
and incurred by the applicant;
    3. Reasonable living expenses, as determined by the Secretary; and
    4. Partial payments of the increased Federal income tax liability 
caused by the FLRP's payments and considered to be ``other income,'' if 
the recipient requests such assistance.
    Prior to entering into a contract for repayment of loans, the 
Secretary requires satisfactory evidence of the existence and 
reasonableness of the individual's educational loans, including a copy 
of the original written loan agreement establishing the outstanding 
educational loan.

Waiver Provision

    In the event of undue financial hardship to a school, the school 
may obtain from the Secretary a waiver of its share of payments while 
the participant is serving under the terms of the contract. For 
purposes of this program, ``undue financial hardship'', as seen by the 
Secretary, is based on a school's particular financial status as 
influenced by such circumstances as budget cutbacks. Decisions will be 
made on a case-by-case basis, and must be supported by the school's 
documentation of comparative yearly financial allocation of funds; or 
the most current certified public accounting audit, including the 
Balance Sheet and Statement of Income and Expenses for the past several 
years.
    If the Secretary waives the school's payment requirement, the 
amount of the Federal loan repayment may be up to the full 20 percent 
described above (regardless of the ``equal amount'' provision described 
above), but cannot exceed the $20,000 repayment limit. The participant 
must pay that portion of loan payment due which is not covered.
    The following Definitions, Program Requirements, Review Criteria 
and Funding Preference were established in FY 1991 after public comment 
dated October 2, 1991, at 56 FR 49896, and the Secretary is extending 
them in FY 1995.

Definitions

    For purposes of the FLRP in FY 1995, an ``Individual from a 
Disadvantaged Background'' is defined as in 42 CFR 57.1804, as one who:
    1. Comes from an environment that has inhibited the individual from 
obtaining the knowledge, skill, and abilities required to enroll in and 
graduate from a health professions school, or from a program providing 
education or training in an allied health profession; or
    2. Comes from a family with an annual income below a level based on 
low income thresholds according to a family size published by the U.S. 
Bureau of the Census, adjusted annually for changes in the Consumer 
Price Index, and adjusted by the Secretary for use in health 
professions and nursing programs. The Secretary will periodically 
publish these income levels in the Federal Register. The following 
income figures determine what constitutes a low income family for 
purposes of the Faculty Loan Repayment Program for FY 1995.

------------------------------------------------------------------------
                                                                 Income 
                  Size of parents' family\1\                    level\2\
------------------------------------------------------------------------
1.............................................................    $9,700
2.............................................................    12,600
3.............................................................    15,000
4.............................................................    19,200
5.............................................................    22,600
6 or more.....................................................   25,400 
------------------------------------------------------------------------
\1\Includes only dependents listed on Federal income tax forms.         
\2\Adjusted gross income for calendar year 1993 rounded to $100.        

    The term ``Living expenses'' means the costs of room and board, 
transportation and commuting costs, and other costs incurred during an 
individual's attendance at a health professions school, as estimated 
each year by the school as part of the school's standard student 
budget. (National Health Service Corps Loan Repayment Program, 42 CFR 
part 62.22)
    The term ``Reasonable educational expenses and living expenses'' 
means the costs of those educational and living expenses which are 
equal to or less than the sum of the school's estimated standard 
student budgets for educational and living expenses for the degree 
program and for the year(s) during which the Program participant is/was 
enrolled in the school. (National Health Service Corps Loan Repayment 
Program, 42 CFR part 62.22)
    The term ``Unserved Obligation Penalty'' means the amount equal to 
the number of months of obligated service that were not completed by an 
individual, multiplied by $1,000, except that in any case in which the 
individual fails to serve 1 year, the unserved obligation penalty shall 
be equal to the full period of obligated service multiplied by $1,000. 
(Section 338E of the Act) See ``Breach of Contract'' section below.

Program Requirements

    The following requirements will be applied to the applicant and to 
the school.

The Applicant

    The applicant will be required to do the following:
    1. Submit a completed application, including the applicant's 
contract with an eligible school to serve as a full-time faculty member 
for not less than 2 years;
    2. Provide evidence that the applicant has completely satisfied any 
other obligation for health professional service which is owed under an 
agreement with the Federal Government, State Government, or other 
entity prior to beginning the period of service under this program;
    3. Certify that the United States does not hold a judgment against 
the applicant; and
    4. Provide documentation to evidence the educational loans and to 
verify their status.

The School

    The school will be required to do the following:
    1. Enter into a contractual agreement with the applicant whereby 
the school is required, for each year for which the participant serves 
as a faculty member, to make payments of principal and interest in an 
amount equal to the amount of such quarterly payments made by the 
Secretary. These payments must be in addition to the faculty salary the 
participant otherwise would receive.
    2. Verify the participant's continuous employment at intervals as 
prescribed by the Secretary.
    The Secretary will pay participants in equal quarterly payments 
during the period of service.

Effective Date of Contract

    After an applicant has been approved for participation in the FLRP, 
the Director, Division of Disadvantaged Assistance (DDA), will send the 
applicant a contract with the Secretary. The effective date is either 
the date [[Page 11103]] work begins at the school as a faculty member 
or the date the Director, DDA, signs the FLRP contract, whichever is 
later. Service should begin no later than September 30, 1995.

Breach of Contract

    The following areas under Breach of Contract are addressed in the 
appended contract:
    1. If the participant fails to serve his or her period of obligated 
faculty service (minimum of 2 years) as contracted with the school, he/
she is then in breach of contract, and neither the Secretary nor the 
school is obligated to continue loan repayments as stated in the 
contract. The participant must then reimburse the Secretary and the 
participating school for all sums of principal and interest paid on 
his/her behalf as stated in the contract in addition to any income tax 
assistance he/she may have received.
    2. Regardless of the length of the agreed period of obligated 
service (2, 3, or more years), a participant who serves less than the 
time period specified in his/her contract is liable for monetary 
damages to the United States amounting to the sum of the total of the 
amounts the Program paid him/her, plus an ``unserved obligation 
penalty'' of $1,000 for each month unserved.
    3. Any amount which the United States is entitled to recover 
because of a breach of the FLRP contract must be paid within 1 year 
from the day the Secretary determines that the participant is in breach 
of contract. If payment is not received by the payment date, additional 
interest, penalties and administrative charges will be assessed in 
accordance with Federal Law (45 CFR 30.13).

Review Criteria

    The HRSA will review fiscal year 1995 applications taking into 
consideration the following criteria:
    1. The extent to which the applicant meets the requirements of 
section 738 of the Act;
    2. The completeness, accuracy, and validity of the applicant's 
responses to application requirements;
    3. The submission of the signed contract with the school;
    4. An applicant's earliest available date to begin service as a 
faculty member provided funding is available for that year; and
    5. An applicant's availability to enter into a service contract for 
a longer period than the mandatory 2-year minimum.
    Factors to assure equitable distribution (e.g. geographic, 
discipline) will be considered in determining the funding of completed 
applications.

National Health Objectives for the Year 2000

    The Public Health Service (PHS) is committed to achieving the 
health promotion and disease prevention objectives of Healthy People 
2000, a PHS-led national activity for setting priority areas. The 
Disadvantaged Health Professions Faculty Loan Repayment Program is 
related to the priority area of Educational and Community-Based 
Programs. Potential applicants may obtain a copy of Healthy People 2000 
(Full Report; Stock No. 017-001-00474-0) or Healthy People 2000 
(Summary Report; Stock No. 017-001-00473-1) through the Superintendent 
of Documents, Government Printing Office, Washington, DC 20402-9325 
(Telephone (202) 783-3238).

Education and Service Linkage

    As part of its long-range planning, HRSA will be targeting its 
efforts to strengthening linkages between U.S. Public Health Service 
education programs and programs which provide comprehensive primary 
care services to the underserved.

Smoke-Free Workplace

    The Public Health Service strongly encourages all grant recipients 
to provide a smoke-free workplace and promote the nonuse of all tobacco 
products, and Public Law 103-227, the Pro-Children Act of 1994, 
prohibits smoking in certain education, library, day care, health care, 
and early childhood development services are provided to children.

Application Requests

    Requests for application materials and questions regarding program 
information and business should be directed to: Lafayette Gilchrist, 
Division of Disadvantaged Assistance, Bureau of Health Professions, 
Health Resources and Services Administration, 5600 Fishers Lane, Room 
8A-09, Rockville, Maryland 20857, Telephone: (301) 443-3680 FAX: (301) 
443-5242.
    Completed applications should be returned to the address listed 
above. The application deadline date is June 30, 1995. Applications 
shall be considered to be ``on time'' if they are either:
    (1) Received on or before the established deadline date, or
    (2) Sent on or before the established deadline date and received in 
time for orderly processing. (Applicants should request a legibly dated 
U.S. Postal Service postmark or obtain a legibly dated receipt from a 
commercial carrier or U.S. Postal Service. Private metered postmarks 
shall not be acceptable as proof of timely mailing.)
    Late applications not accepted for processing will be returned to 
the applicant.
    The application form and instructions for this program have been 
approved by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act. The OMB clearance number is 0915-0150.
    The Disadvantaged Health Professions Faculty Loan Repayment Program 
is listed at 93.923 in the Catalog of Federal Domestic Assistance. It 
is not subject to the provisions of Executive Order 12372, 
Intergovernmental Review of Federal Programs (as implemented through 45 
CFR part 100).
    This program is not subject to the Public Health System Reporting 
Requirements.

    Dated: February 23, 1995.
Ciro V. Sumaya,
Administrator.
Contract for the Disadvantaged Health Professions Faculty Loan 
Repayment Program With U.S. Department of Health and Human Services--
Public Health Service; Health Resources and Services Administration; 
Bureau of Health Professions

    Section 738 of the Public Health Service Act (``Act'') [42 
United States Code 293 et seq.], as added by Pub. L. 102-408, 
authorizes the Secretary of Health and Human Services 
(``Secretary'') to repay the educational loans of applicants from 
disadvantaged backgrounds selected to be participants in the Loan 
Repayment Program Regarding Service on Faculties of Certain Health 
Professions Schools (``Faculty Loan Repayment Program''). In return 
for these loan repayments, applicants must agree to provide teaching 
faculty services at an approved accredited health professions school 
determined by the Secretary for a designated period of obligated 
service pursuant to section 738 of the Act.
    Section 738(a)(5)&(7) of the Act require applicants to submit 
with their applications a signed contract with an accredited health 
professions school and a signed contract which states the terms and 
conditions of participation in the Faculty Loan Repayment Program. 
The Secretary shall sign only those contracts submitted by 
applicants who are selected for participation.
    The terms and conditions of participating in the Faculty Loan 
Repayment Program are set forth below:

Section A--Obligations of the Secretary

    Subject to the availability of funds appropriated by the 
Congress of the United States for the Faculty Loan Repayment 
Program, the Secretary agrees to:
    1. Pay, in the amount provided in paragraph 2 of this section, 
the undersigned applicant's qualifying educational loans. Qualifying 
educational loans consist of the principal and interest on 
educational loans [[Page 11104]] received by the applicant for the 
following expenses of enrollment:
    a. tuition expenses;
    b. all other reasonable educational expenses such as fees, 
books, supplies, educational equipment and materials required by the 
school, and incurred by the applicant; or
    c. reasonable living expenses as determined by the Secretary.
    2. If the applicant agrees to serve 2 or more years:
    a. Except as provided in subparagraph b. of this paragraph, pay 
up to $20,000 of the outstanding principal and interest of a 
participant's non delinquent educational loans, but not more than 
half of the 20 percent of the qualified outstanding educational 
loans for such year for each year of eligible faculty service; or
    b. The Secretary's liability will not exceed a cap of $20,000 of 
principal and interest annually. This would include the 10 percent 
waived under Sec. 738(a) of the Act for the School's proportionate 
share of the loan repayment amounts. The applicant must pay that 
portion not covered.
    3. Make loan repayments for a year of obligated service no later 
than the end of the fiscal year in which the applicant completes 
such year of service.
    4. The effective date of the Contract will be the date it is 
signed by the Director, Division of Disadvantaged Assistance or the 
date employment begins as a faculty member of the contracting school 
whichever is later.

Section B--Obligations of the Participant

    1. The applicant agrees to:
    a. Continue loan repayments to lenders for the first quarter 
after which the Secretary will make delayed quarterly payments to 
applicant for the years stated in paragraph c of this section. 
Applicant must pay lender(s) these payments.
    b. Serve his or her period of obligated faculty service as 
contracted with the school and as determined by the Secretary to be 
acceptable.
    e. Serve in accordance with paragraph b. of this section for 
______ years at ____________________. The applicant must serve a 
minimum of two years.
    2. If the applicant's eligibility to participate in the Faculty 
Loan Repayment Program is based on section 738(a)(2) of the Act 
(i.e. based on his or her enrollment in an accredited health 
professions school), he or she also agrees to:
    a. Maintain full-time enrollment, (as determined by the School), 
in good academic standing as determined by the School, in the final 
year of the course of study leading to a degree in medicine, 
osteopathic medicine, dentistry, pharmacy, podiatric medicine, 
optometry, veterinary medicine, nursing, or public health, or 
schools offering graduate programs in clinical psychology in which 
the applicant is currently enrolled, until completion of such course 
of study;
    b. Enter into a contract with an accredited school described in 
subsection (a) of Section 738 to serve as a ``new'' member of the 
faculty of the school for not less than 2 years according to the 
requirements described in subsection (a)(5) of section 738.
    c. Begin service obligation as contracted.

Section C--Breach of Written Loan Repayment Contract

    1. If the participant fails to comply with section B.1.c. of 
this contract or is dismissed for disciplinary reasons or 
voluntarily terminates the contracts, neither the Secretary nor the 
School is obligated to continue loan repayments as stated in Sec. A 
of this Contract. The participant shall be liable to the United 
States and the School for the amounts specified in paragraph 2 of 
this section.
    2. If the applicant agrees to serve as a full-time faculty 
member for two years or more and fails to serve the 2-year minimum 
requirement, he or she is liable to pay monetary damages to the 
United States amounting to the sum of (a) the total amounts 
specified in Section A.2 of this contract plus (b) an ``unserved 
obligation penalty'' of $1,000 for each month unserved as set forth 
in paragraph 3 of this section plus (c) any tax assistance paid plus 
(d) interest, penalties and administrative charges for past due 
payments.
    3. The ``Unserved Obligation Penalty'' means the amount equal to 
the number of months of obligated service that were not completed by 
an individual, multiplied by $1,000 except that in any case in which 
the individual fails to serve 1 year, the unserved obligated penalty 
shall be equal to the full period of obligated service multiplied by 
$1,000.
    4. It the applicant agrees to serve more than the 2-year minimum 
service obligation and has completed the 2-year minimum he or she 
will be liable for such sums paid for any months that are not a full 
year beyond the 2-year minimum requirement as agreed to in Section 
B.1.c of this contract, plus an ``unserved obligation penalty'' of 
$1,000 for each month unserved.
    5. Any amount the United States is entitled to recover shall be 
paid within one year of the date the Secretary determines that the 
applicant is in breach of this written contract. Failure to pay by 
the due date will incur delinquent charges provided by Federal Law. 
(45 CFR 30.13).

Section D--Cancellation, Suspension, and Waiver of Obligation

    Any service or payment obligation may be canceled, suspended, or 
waived under certain circumstances described below: (1) In the event 
of death or permanent and total disability, the Secretary will 
cancel obligations under this contract. To receive cancellation in 
the event of death, the executor of the estate must submit an 
official death certificate to the Secretary. To receive cancellation 
for permanent and total disability, applicant or his/her 
representative must apply to the Secretary, submitting medical 
evidence of my condition, and the Secretary may cancel this 
obligation in accordance with applicable Federal statutes and 
regulations; (2) Upon receipt of supporting documentation the 
Secretary may waive or suspend service or payment obligation under 
this contract if the Secretary determines that: (a) meeting the 
terms and conditions of the contract is impossible or would involve 
extreme hardship; and (b) enforcement of the obligations would be 
unconscionable. (3) Deferment will be granted in the event of long 
term illness. Supporting documentation should be sent to: Division 
of Disadvantaged Assistance, Room 8A-09 Parklawn Building, 5600 
Fishers Lane, Rockville, MD 20857.
    The Secretary or his/her authorized representative must sign 
this contract before it becomes effective.

----------------------------------------------------------------------
Applicant Name (Please Print)    
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Applicant Signature*    Date

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Secretary of Health and Human Services or Designee    
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Date
    *Before signing, be sure you have completed section B.1.c. on 
page 1 of this contract indicating the number of years of service 
you agree to perform.

[FR Doc. 95-4964 Filed 2-28-95; 8:45 am]
BILLING CODE 4160-15-P