[Federal Register Volume 62, Number 27 (Monday, February 10, 1997)]
[Proposed Rules]
[Pages 5953-5956]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3215]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Public Health Service

42 CFR Part 68a

RIN 0905-AE56


National Institutes of Health Clinical Research Loan Repayment 
Program for Individuals from Disadvantaged Backgrounds

AGENCY: National Institutes of Health, Public Health Service, DHHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The National Institutes of Health (NIH) proposes to issue a 
regulation to implement provisions of the Public Health Service Act 
authorizing the NIH Clinical Research Loan Repayment Program for 
Individuals from Disadvantaged Backgrounds. The purpose of the program 
is the recruitment and retention of highly qualified health 
professionals who are from disadvantaged backgrounds to clinical 
research, as employees of the NIH, by providing repayment of qualified 
educational loans.

DATES: Comments must be received on or before April 11, 1997, in order 
to assure that NIH will be able to consider the comments in preparing 
the final rule.

ADDRESSES: Comments should be sent to Jerry Moore, NIH Regulations 
Officer, Office of Management Assessment, NIH, Building 31, Room 1B05, 
31 CENTER DR MSC 2075, BETHESDA, MD 20892-2075.

FOR FURTHER INFORMATION CONTACT: Jerry Moore at the address above, or 
telephone (301) 496-4606 (not a toll-free number).

SUPPLEMENTARY INFORMATION: The NIH Revitalization Act of 1993 (Pub. L. 
103-43) was enacted June 10, 1993, adding section 487E of the Public 
Health Service (PHS) Act, 42 U.S.C. 288-5. Section 487E authorizes the 
Secretary to carry out a program of entering into contracts with 
appropriately qualified health professionals from disadvantaged 
backgrounds with substantial educational loan debt relative to income. 
Under such contracts, qualified health professionals agree to conduct 
clinical research as NIH employees for a minimum of two years, in 
consideration of the Federal Government agreeing to repay a maximum of 
$20,000 annually of the principal and the interest of the educational 
loans of such health professionals. This program is known as the NIH 
Clinical Research Loan Repayment Program for Individuals from 
Disadvantaged Backgrounds. The NIH is proposing to amend title 42 of 
the Code of Federal Regulations by adding a new part 68a to govern the 
administration of this loan repayment program.
    The proposed regulation specifies the scope and purpose of the 
program, who is eligible to apply, how individuals apply to participate 
in the program, how participants are selected, and the terms and 
conditions of the program. The purpose of this notice is to invite 
public comment on the proposed regulation. The following is provided as 
public information.

Executive Order 12866

    Executive Order 12866 requires that all regulatory actions reflect 
consideration of the costs and benefits they generate, and that they 
meet certain standards, such as avoiding the imposition of unnecessary 
burdens on the affected public. If a regulatory action is deemed to 
fall within the scope of the definition of the term ``significant 
regulatory action'' contained in section 3(f) of the Order, pre-
publication review by the Office of Management and Budget's Office of 
Information and Regulatory Affairs (OIRA) is necessary. This proposed 
rule has been reviewed under Executive Order 12866 by OIRA and has been 
deemed not significant.

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 requires that regulatory 
proposals be analyzed to determine whether they create a significant 
impact on a substantial number of small entities. I certify that any 
final rule resulting from this proposal will not have any such impact.

Paperwork Reduction Act

    This proposed rule does not contain any information collection 
requirements which are subject to Office of Management and Budget (OMB) 
approval under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 
35). The application forms for use by the NIH Clinical Research Loan 
Repayment Program for Individuals from Disadvantaged Backgrounds have 
been submitted to OMB for approval.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbered program 
affected by the proposed regulation is:

    93.220--NIH Clinical Research Loan Repayment Program for 
Individuals from Disadvantaged Backgrounds

List of Subjects in 42 CFR Part 68a

    Health--clinical research, medical research; Loan programs--health.

    Dated: December 2, 1996.
Harold Varmus,
Director, National Institutes of Health.

    For reasons presented in the preamble, it is proposed to amend 
title 42 of the Code of Federal Regulations by adding a new Part 68a to 
read as set forth below.

PART 68A--NATIONAL INSTITUTES OF HEALTH (NIH) CLINICAL RESEARCH 
LOAN REPAYMENT PROGRAM FOR INDIVIDUALS FROM DISADVANTAGED 
BACKGROUNDS (CR-LRP)

Sec.
68a.1  What is the scope and purpose of the NIH Clinical Research 
Loan Repayment Program for Individuals from Disadvantaged 
Backgrounds (CR-LRP)?
68a.2  Definitions.
68a.3  Who is eligible to apply?
68a.4  Who is eligible to participate?
68a.5  Who is ineligible to participate?
68a.6  How do individuals apply to participate in the CR-LRP?
68a.7  How are applicants selected to participate in the CR-LRP?
68a.8  What does the CR-LRP provide to participants?
68a.9  What loans qualify for repayment?
68a.10  What does an individual have to do in return for loan 
repayments received under the CR-LRP?
68a.11  How does an individual receive loan repayments beyond the 
initial two-year contract?
68a.12  What will happen if an individual does not comply with the 
terms and conditions of participation in the CR-LRP?

[[Page 5954]]

68a.13  Under what circumstances can the service or payment 
obligation be canceled, waived, or suspended?
68a.14  When can a CR-LRP payment obligation be discharged in 
bankruptcy?
68a.15  Additional conditions.
68a.16  What other regulations and statutes apply?

    Authority: 42 U.S.C. 288-5.


Sec. 68a.1  What is the scope and purpose of the NIH Clinical Research 
Loan Repayment Program for Individuals from Disadvantaged Backgrounds 
(CR-LRP)?

    This part applies to the award of educational loan payments under 
the NIH Clinical Research Loan Repayment Program for Individuals from 
Disadvantaged Backgrounds (CR-LRP) authorized by section 487E of the 
Public Health Service Act (42 U.S.C. 288-5). The purpose of this 
program is to recruit and retain appropriately qualified health 
professionals, who are from disadvantaged backgrounds and have 
substantial educational debt relative to income, to conduct clinical 
research as NIH employees.


Sec. 68a.2  Definitions.

    As used in this part:
    Act means the Public Health Service Act, as amended (42 U.S.C. 201 
et seq.).
    Applicant means an individual who applies to, and meets the 
eligibility criteria for the CR-LRP.
    Approved clinical research means clinical research approved by the 
Clinical Research Loan Repayment Committee.
    Clinical privileges means the delineation of privileges for patient 
care granted to qualified health professionals by the NIH Medical Board 
or other appropriate credentialing board.
    Clinical research means activities which qualify for inclusion as 
clinical research in the CR-LRP as determined by the Clinical Research 
Loan Repayment Committee.
    Clinical Research Loan Repayment Committee (CR-LRC) means the 
scientific board assembled to review, rank, and approve or disapprove 
Clinical Research Loan Repayment Program applications. The CR-LRC is 
composed of NIH scientific staff and co-chaired by the Associate 
Director for Clinical Research, NIH, and the Associate Director for 
Research on Minority Health, NIH. Members are nominated by the Deputy 
Director, Intramural Research, NIH, and the co-chairs, and appointed by 
the Director, NIH.
    Clinical Research Loan Repayment Program (CR-LRP or Program) means 
the NIH Clinical Research Loan Repayment Program for Individuals from 
Disadvantaged Backgrounds authorized by section 487E of the Act, as 
amended.
    Clinical Research Loan Repayment Program (CR-LRP or Program) 
contract refers to the agreement, which is signed by an applicant and 
the Secretary, wherein the applicant from a disadvantaged background 
agrees to engage in clinical research as an employee of the NIH and the 
Secretary agrees to repay qualified educational loans for a prescribed 
period as specified in this part.
    Clinical researcher means an NIH employee with clinical privileges 
who is conducting approved clinical research.
    Commercial loans means loans made by banks, credit unions, savings 
and loan associations, not-for-profit organizations, insurance 
companies, schools, and other financial or credit institutions which 
are subject to examination and supervision in their capacity as lending 
institutions by an agency of the United States or of the State in which 
the lender has its principal place of business.
    Current payment status means that a qualified educational loan is 
not past due in its payment schedule as determined by the lending 
institution.
    Debt threshold refers to the minimum amount of qualified 
educational debt an individual must have, on his/her program 
eligibility date, in order to be eligible for Program benefits and, for 
purposes of eligibility under this part, debt threshold means that the 
qualified educational debt must equal or exceed 20 percent of an 
individual's annual NIH salary on his/her program eligibility date.
    Educational expenses means the cost of the health professional's 
education, including the tuition expenses and other educational 
expenses such as fees, books, supplies, educational equipment and 
materials, and laboratory expenses.
    Government loans means loans made by Federal, State, county, or 
city agencies which are authorized by law to make such loans.
    Individual from disadvantaged background means an individual who:
    (1) comes from an environment that inhibited the individual from 
obtaining the knowledge, skill and ability required to enroll in and 
graduate from a health professions school; or
    (2) comes from a family with an annual income below a level based 
on low-income thresholds according to 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 all health 
professions programs. The Secretary periodically publishes these income 
levels in the Federal Register.
    Institute, Center, or Agency (ICA) means an institute, center, or 
agency of the National Institutes of Health.
    Living expenses means the reasonable cost of room and board, 
transportation and commuting costs, and other reasonable costs incurred 
during an individual's attendance at an educational institution.
    Participant means an individual whose application to the CR-LRP has 
been approved and whose Program contract has been executed by the 
Secretary.
    Program means the NIH Clinical Research Loan Repayment Program for 
Individuals from Disadvantaged Backgrounds.
    Program eligibility date means the date on which an individual's 
Program contract is executed by the Secretary and that individual is 
engaged in approved clinical research as an employee of the NIH.
    Qualified educational loans and interest/debt include Government 
and commercial educational loans and interest for:
    (1) Undergraduate, graduate, and health professional school tuition 
expenses;
    (2) Other reasonable educational expenses required by the school(s) 
attended, including fees, books, supplies, educational equipment and 
materials, and laboratory expenses; and
    (3) Reasonable living expenses, including the cost of room and 
board, transportation and commuting costs, and other reasonable living 
expenses incurred.
    Reasonable educational and living expenses means those educational 
and living expenses which are equal to or less than the sum of the 
school's estimated standard student budget for educational and living 
expenses for the degree program and for the year(s) during which the 
participant was enrolled in school. If there is no standard budget 
available from the school or if the participant requests repayment for 
educational and living expenses which exceed the standard student 
budget, reasonableness of educational and living expenses incurred must 
be substantiated by additional contemporaneous documentation, as 
determined by the Secretary.
    Repayable debt means the portion, as established by the Secretary, 
of an individual's total qualified educational debt relative to the NIH 
salary, which can be paid by the CR-LRP. Specifically, qualifying 
educational debt amounts in excess of 50 percent of the

[[Page 5955]]

debt threshold will be considered for repayment.
    Salary means base pay plus quarters, subsistence, and variable 
housing allowances, if applicable.
    School means undergraduate, graduate, and health professions 
schools which are accredited by a body or bodies recognized for 
accreditation purposes by the Secretary of Education.
    Secretary means the Secretary of Health and Human Services and any 
other officer or employee of the Department of Health and Human 
Services to whom the authority involved has been delegated.
    Service means the Public Health Service.
    State means one of the fifty States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Northern Mariana Islands, the U.S. 
Virgin Islands, Guam, American Samoa, and the Trust Territory of the 
Pacific Islands (the Federated States of Micronesia, the Republic of 
the Marshall Islands, and the Republic of Palau).
    Withdrawal means a request by a participant, prior to the Program 
making payments on his or her behalf, for withdrawal from Program 
participation. A withdrawal is without penalty to the participant and 
without obligation to the Program.


Sec. 68a.3  Who is eligible to apply?

    To be eligible to apply to the CR-LRP, an individual must be a 
citizen, national, or permanent resident of the United States; hold a 
M.D., Ph.D., D.O., D.D.S., D.M.D., A.D.N./B.S.N., or equivalent degree; 
have, on his/her program eligibility date, qualified educational debt 
equal to or in excess of the debt threshold; and be an individual from 
a disadvantaged background.


Sec. 68a.4  Who is eligible to participate?

    To be eligible to participate in the CR-LRP, an applicant must have 
the recommendation of the employing ICA Scientific Program Director, 
the concurrence of the employing ICA Director, and the approval of the 
CR-LRC. Since participation in the Program is contingent, in part, upon 
employment with NIH, a Program contract may not be awarded to an 
applicant until an employment commitment has been made by the employing 
ICA Personnel Department.


Sec. 68a.5  Who is ineligible to participate?

    The following individuals are ineligible for CR-LRP participation:
    (a) Persons who are not eligible applicants as specified under 
Sec. 68a.3;
    (b) Persons who owe an obligation of health professional service to 
the Federal Government, a State, or other entity, unless a deferral is 
granted for the length of his/her service obligation under the CR-LRP. 
The following are examples of programs which have a service obligation: 
Physicians Shortage Area Scholarship Program, National Research Service 
Award Program, Public Health Service Scholarship, National Health 
Service Corps Scholarship Program, Armed Forces (Army, Navy, or Air 
Force) Professions Scholarship Program, Indian Health Service 
Scholarship Program, and the NIH AIDS Research Loan Repayment Program.
    (c) Persons who are not NIH employees, such as Intramural Research 
Training Award (IRTA) recipients, Visiting Fellows, National Research 
Service Award (NRSA) recipients, Guest Researchers or Special 
Volunteers, NIH-National Research Council (NRC) Biotechnology Research 
Associates Program participants, and Intergovernmental Personnel Act 
(IPA) participants; or
    (d) Persons who do not have clinical privileges.


Sec. 68a.6  How do individuals apply to participate in the CR-LRP?

    An application for participation in the CR-LRP shall be submitted 
to the NIH office which is responsible for the Program's 
administration, in such form and manner as the Secretary may prescribe.


Sec. 68a.7  How are applicants selected to participate in the CR-LRP?

    To be selected for participation in the CR-LRP, applicants must 
satisfy the following requirements:
    (a) Applicants must meet the eligibility requirements specified in 
Sec. 68a.3 and Sec. 68a.4.
    (b) Applicants must not be ineligible for participation as 
specified in Sec. 68a.5.
    (c) Applicants must be selected for approval by the CR-LRC, based 
upon a review of their applications.


Sec. 68a.8  What does the CR-LRP provide to participants?

    (a) Loan repayments: For each year of service the individual agrees 
to serve, with a minimum of 2 years of obligated service, the Secretary 
may pay up to $20,000 per year of a participant's repayable debt.
    (b) Under Sec. 68a.8(a), the Secretary will make payments in the 
discharge of debt to the extent appropriated funds are available for 
these purposes.


Sec. 68a.9  What loans qualify for repayment?

    (a) The CR-LRP will repay participants' lenders the principal, 
interest, and related expenses of qualified Government and commercial 
educational loans obtained by participants for the following:
    (1) Undergraduate, graduate, and health professional school tuition 
expenses;
    (2) Other reasonable educational expenses required by the school(s) 
attended, including fees, books, supplies, educational equipment and 
materials, and laboratory expenses; and
    (3) Reasonable living expenses, including the cost of room and 
board, transportation and commuting costs, and other living expenses as 
determined by the Secretary.
    (b) The following educational loans are ineligible for repayment 
under the CR-LRP:
    (1) Loans obtained from other than a government entity or 
commercial lending institution;
    (2) Loans for which contemporaneous documentation is not available;
    (3) Loans or portions of loans obtained for educational or living 
expenses which exceed the standard of reasonableness as determined by 
the participant's standard school budget for the year in which the loan 
was made, and are not determined by the Secretary to be reasonable 
based on additional documentation provided by the individual;
    (4) Loans, financial debts, or service obligations incurred under 
the following programs: Physicians Shortage Area Scholarship Program 
(Federal or State), National Research Service Award Program, Public 
Health and National Health Service Corps Scholarship Training Program, 
National Health Service Corps Scholarship Program, Armed Forces (Army, 
Navy, or Air Force) Health Professions Scholarship Program, Indian 
Health Service Program, and similar programs, upon determination by the 
Secretary, which provide loans, scholarships, loan repayments, or other 
awards in exchange for a future service obligation;
    (5) Any loan in default or not in a current payment status;
    (6) Loan amounts which participants have paid or were due to have 
paid prior to the program eligibility date; and
    (7) Loans for which promissory notes have been signed after the 
program eligibility date.


Sec. 68a.10  What does an individual have to do in return for loan 
repayments received under the CR-LRP?

    Individuals must agree to be engaged in approved clinical research, 
as employees of the NIH, for a minimum initial period of two 
consecutive years.

[[Page 5956]]

Sec. 68a.11  How does an individual receive loan repayments beyond the 
initial two-year contract?

    An individual may apply for and the Secretary may grant extension 
contracts for one-year periods, if there is sufficient debt remaining 
to be repaid and the individual is engaged in approved clinical 
research as an NIH employee.


Sec. 68a.12  What will happen if an individual does not comply with the 
terms and conditions of participation in the CR-LRP?

    (a) Absent withdrawal (see Sec. 68a.2) or termination under 
paragraph (d) of this section, any participant who fails to complete 
the minimum two-year service obligation required under the Program 
contract will be considered to have breached the contract and will be 
subject to assessment of monetary damages and penalties as follows:
    (1) Participants who leave during the first year of the initial 
contract are liable for amounts already paid by the NIH on behalf of 
the participant plus an amount equal to $1,000 multiplied by the number 
of months of the original service obligation.
    (2) Participants who leave during the second year of the contract 
are liable for amounts already paid by the NIH on behalf of the 
participant plus $1,000 for each unserved month.
    (b) Payments of any amount owed under paragraph (a) of this section 
shall be made within one year of the participant's breach (or such 
longer period as determined by the Secretary).
    (c) Participants who sign a continuation contract for any year 
beyond the initial two-year period and fail to complete the one-year 
period specified are liable for the pro rata amount of any benefits 
advanced beyond the period of completed service.
    (d) Terminations will not be considered a breach of contract in 
cases where such terminations are beyond the control of the participant 
as follows:
    (1) Terminations for cause or for convenience of the Government 
will not be considered a breach of contract and monetary damages will 
not be assessed.
    (2) Occasionally, a participant's research assignment may evolve 
and change to the extent that the individual is no longer engaged in 
approved clinical research. Similarly, the research needs and 
priorities of the ICA and/or the NIH may change to the extent that a 
determination is made that the health professional's skills may be 
better utilized in a non-clinical research assignment. Under these 
circumstances, the following will apply:
    (i) Program participation and benefits will cease as of the date an 
individual is no longer engaged in approved clinical research; and
    (ii) Normally, job changes of this nature will not be considered a 
breach of contract on the part of either the NIH or the participant. 
Based on the recommendation of the ICA Director and concurrence of the 
Secretary, the participant will be released from the remainder of his 
or her service obligation without assessment of monetary penalties. The 
participant in this case will be permitted to retain all Program 
benefits made or owed by NIH on his/her behalf up to the date the 
individual is no longer engaged in approved clinical research, except 
the pro rata amount of any benefits advanced beyond the period of 
completed service.


Sec. 68a.13  Under what circumstances can the service or payment 
obligation be canceled, waived, or suspended?

    (a) Any obligation of a participant for service or payment to the 
Federal Government under this part will be canceled upon the death of 
the participant.
    (b) The Secretary may waive or suspend any service or payment 
obligation incurred by the participant upon request whenever compliance 
by the participant:
    (1) Is impossible,
    (2) Would involve extreme hardship to the participant, or
    (3) If enforcement of the service or payment obligation would be 
against equity and good conscience.
    (4) The Secretary may approve a request for a suspension of the 
service or payment obligations for a period of 1 year. A renewal of 
this suspension may also be granted.
    (c) Compliance by a participant with a service or payment 
obligation will be considered impossible if the Secretary determines, 
on the basis of information and documentation as may be required, that 
the participant suffers from a physical or mental disability resulting 
in the permanent inability of the participant to perform the service or 
other activities which would be necessary to comply with the 
obligation.
    (d) In determining whether to waive or suspend any or all of the 
service or payment obligations of a participant as imposing an undue 
hardship and being against equity and good conscience, the Secretary, 
on the basis of information and documentation as may be required, will 
consider:
    (1) The participant's present financial resources and obligations;
    (2) The participant's estimated future financial resources and 
obligations; and
    (3) The extent to which the participant has problems of a personal 
nature, such as a physical or mental disability or terminal illness in 
the immediate family, which so intrude on the participant's present and 
future ability to perform as to raise a presumption that the individual 
will be unable to perform the obligation incurred.


Sec. 68a.14  When can a CR-LRP payment obligation be discharged in 
bankruptcy?

    Any payment obligation incurred under Sec. 68a.12 may be discharged 
in bankruptcy under Title 11 of the United States Code only if such 
discharge is granted after the expiration of the five-year period 
beginning on the first date that payment is required and only if the 
bankruptcy court finds that a nondischarge of the obligation would be 
unconscionable.


Sec. 68a.15  Additional conditions.

    When a shortage of funds exists, participants may be funded 
partially, as determined by the Secretary. However, once a CR-LRP 
contract has been signed by both parties, the Secretary will obligate 
such funds as necessary to ensure that sufficient funds will be 
available to pay benefits for the duration of the period of obligated 
service unless, by mutual written agreement between the Secretary and 
the applicant, specified otherwise. Benefits will be paid on a 
quarterly basis after each service period unless specified otherwise by 
mutual written agreement between the Secretary and the applicant.
    The Secretary may impose additional conditions as deemed necessary.


Sec. 68a.16  What other regulations and statutes apply?

    Several other regulations and statutes apply to this part. These 
include, but are not necessarily limited to:

Debt Collection Act of 1982, Pub. L. 97-365 (5 U.S.C. 5514);
Fair Credit Reporting Act (15 U.S.C. 1681 et seq.);
Federal Debt Collection Procedures Act of 1990, Pub. L. 101-647 (28 
U.S.C. 1); and
Privacy Act of 1974 (5 U.S.C. 552a).

[FR Doc. 97-3215 Filed 2-7-97; 8:45 am]
BILLING CODE 4140-01-P