[Federal Register Volume 62, Number 19 (Wednesday, January 29, 1997)]
[Pages 4312-4315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2245]



Program Announcement for Contracts for the Disadvantaged Health 
Professions Faculty Loan Repayment Program for Fiscal Year 1997

    The Health Resources and Services Administration (HRSA) announces 
that applications for contracts for fiscal year (FY) 1997, 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 1997, approximately $800,000 is available for competing 
applications for the Disadvantaged Health Professions Faculty Loan 
Repayment Program. It is expected that 25 contracts averaging $32,000 
($15,000 per year for two years) will be supported with these funds.


    The purpose of the Disadvantaged Health Professions Faculty Loan 
Repayment Program (FLRP), authorized by section 738(a), is to attract 
disadvantaged health professionals into faculty positions in 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'' 
    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

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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 

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 

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 each year of service, as 
much as 20 percent of the outstanding principal and interest on the 
individuals educational loans, not to exceed $20,000 for any given 
year. 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 
    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 
    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 
    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 1997.


    For purposes of the FLRP in FY 1997, 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 1997.

                Size of  parents' family \1\                   level \2\
1...........................................................     $10,200
2...........................................................      13,200
3...........................................................      15,700
4...........................................................      20,200
5...........................................................      23,800
6 or more...................................................      26,700
\1\ Includes only dependents listed on Federal income tax forms.        
\2\ Adjusted gross income for calendar year 1995 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

[[Page 4314]]

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 Student Assistance (DSA), will send the 
applicant a contract with the Secretary. The effective date is either 
the date work begins at the school as a faculty member or the date the 
Director, DSA, signs the FLRP contract, whichever is later. Service 
should begin no later than September 30, 1997.

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 1997 applications taking into 
consideration the following criteria:
    1. The extent to which the applicant meets the requirements of 
section 738(a) 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 

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, D.C. 20402-9325 
(Telephone (202) 783-3238).

Academic Community Partnerships

    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 facilities that receive Federal funds in 
which 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: Shirley Zimmerman, 
Division of Student Assistance, Bureau of Health Professions, Health 
Resources and Services Administration, 5600 Fishers Lane, Room 8-34, 
Rockville, Maryland 20857. Email: szimmerman@hrsa.dhhs.gov; Telephone: 
(301) 443-1700; FAX: (301) 443-0846.
    Completed applications should be returned to the address listed 
above. The application deadline date is June 30, 1997. Applications 
shall be considered to be ``on time'' if they are either:

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    (1) Received on or before the established deadline date, or
    (2) Postmarked 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 

    Dated: January 23, 1997.
Ciro V. Sumaya,
[FR Doc. 97-2245 Filed 1-28-97; 8:45 am]