[Federal Register Volume 64, Number 105 (Wednesday, June 2, 1999)]
[Notices]
[Pages 29660-29664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13925]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Resources and Services Administration


Request for Comments for Scholarships for Disadvantaged Students

    The Health Resources and Services Administration (HRSA) announces 
that applications for fiscal year (FY) 1999 for the Scholarships for 
Disadvantaged Students (SDS) program are being accepted under the 
authority of section 737 of the Public Health Service Act (the Act), 
Title VII, Part B, as amended by the Health Professions Education 
Partnerships Act of 1998, Pub. L. 105-392, dated November 13, 1998. 
This notice requesting comments on proposed eligibility criteria, 
preferences and priorities includes updates to information provided in 
the January 6, 1999 program announcement.

Purpose

    The SDS program provides funds to health professions and nursing 
schools for the purpose of assisting such schools in providing 
scholarships to individuals from disadvantaged backgrounds who are 
enrolled (or accepted for enrollment) as full-time students in the 
schools.
    For purposes of the SDS program in FY 1999, an ``individual from a 
disadvantaged background'' is defined in 42 CFR 57.1804, subpart S, 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 or nursing school, or from a 
program providing education or training in allied health professions; 
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 and nursing programs. The Secretary will periodically 
publish these low income levels in the Federal Register.
    The following income figures determine what constitutes a low-
income family for purposes of the SDS program for FY 1999.

------------------------------------------------------------------------
                                                                 Income
                 Size of parents' family \1\                   level \2\
------------------------------------------------------------------------
1............................................................    $10,900
2............................................................     14,100
3............................................................     16,800
4............................................................     21,500
5............................................................     25,400
6 or more....................................................    28,500
------------------------------------------------------------------------
\1\ Includes only dependents listed on Federal income tax forms.
\2\ Adjusted gross income for calendar year 1998, rounded to nearest
  $100.

    Under the FY 1999 appropriations bill, $38.1 million has been 
appropriated for this program. Of the funds available for FY 1999, 16 
percent shall be made available to schools agreeing to expend the funds 
only for nursing scholarships. The balance will support scholarships 
for eligible health professions students. An estimated 490 awards will 
be made to institutions participating in this program. The period of 
fund availability will be for one academic year.

Use of Funds

    Funds awarded to a school under this program may be used as 
follows:
    (1) To award scholarships to former recipients of scholarships 
under the Exceptional Financial Need (EFN) Scholarship program and the 
Financial Assistance for Disadvantaged Health Professions Students 
(FADHPS) program (sections 736 and 740(d)(2)(B) of the Public Health 
Service Act, as such sections existed prior to the enactment of Pub. L. 
105-392), at levels comparable to what these students would have 
received prior to phase out of the EFN and FADHPS programs, and with 
service agreements that are consistent with those the students entered 
into to receive EFN and FADHPS funds in FY 1998. The Secretary has 
notified those schools with former EFN and FADHPS recipients (who are 
enrolled in allopathic medical, osteopathic medical, or dental schools 
only) regarding the procedures for receiving funding for these 
students.
    (2) To award scholarships to eligible students enrolled in the 
school, to be expended only for tuition expenses, other reasonable 
educational expenses, and reasonable living expenses (as defined by the 
school for all students attending the school) incurred while enrolled 
in a school as a full-time student. The amount of the scholarship may 
not, for any year of attendance, exceed the total amount required for 
the year for the expenses specified above, and may not exceed the 
student's financial need, as determined in accordance with a need 
analysis procedure approved by the Department of Education.
    Any school receiving SDS funds must maintain separate 
accountability for these funds.

School Eligibility

    An entity that is eligible to receive funds under this program is:
    (1) As defined in section 799B of the Act, a school of medicine, 
osteopathic medicine, dentistry, pharmacy, podiatric medicine, 
optometry, veterinary medicine, public health, chiropractic, or allied 
health, a school offering a graduate program in behavioral and mental 
health practice, or an entity providing programs for the training of 
physician assistants; or, as defined in section 801 of the Act, is a 
school of nursing. Each school or program must be accredited by a 
recognized body or bodies approved for such purpose by the Secretary of 
Education, and by a specialized accrediting body approved for the 
health discipline applying for program participation; and
    (2) Carrying out a program for recruiting and retaining students 
from disadvantaged backgrounds, including students who are members of 
racial and ethnic minorities.

Proposed School or Program Eligibility Criteria

    The Senate Report accompanying Pub. L. 105-392 states that the 
committee expects the Secretary to apply appropriate standards in 
determining which schools or programs from all eligible disciplines 
have complied with the requirement to be carrying out a program for 
recruiting and retaining students from disadvantaged backgrounds, using

[[Page 29661]]

outcome-based measures that provide an indication of the success of the 
program. The report further states that the existence of a recruitment 
and retention program for students from disadvantaged backgrounds 
should not, in itself, result in the eligibility of a school or program 
if the school or program is unable to demonstrate that the recruitment 
and retention program has achieved success, based on the number and/or 
percentage of disadvantaged students who graduate from the school (p. 
20, Senate Report 105-220). Accordingly, the Secretary is proposing to 
establish the following outcome-based measures with which a school or 
program must comply to be eligible to receive SDS funds in FY 1999:
    (1) Individuals from disadvantaged backgrounds must comprise at 
least 5 percent of the total enrollment in the school or program for 
which funds are requested, based on enrollment data for academic year 
1997-98;
    (2) Individuals from disadvantaged backgrounds must comprise at 
least 5 percent of the total graduates from the school or program for 
which funds are requested, based on graduates for academic year 1997-
98; and
    (3) The ratio of individuals from disadvantaged backgrounds who 
graduated, compared with the individuals from disadvantaged backgrounds 
who are enrolled, must be at least 15 percent for 5-year programs, 20 
percent for 4-year programs, 25 percent for 3-year programs, and 40 
percent for 2-year programs.
    Since the use of outcome measures to determine eligibility would be 
a new requirement in FY 1999, and since the timing of the enactment of 
the new statute has provided very little lead time to notify schools or 
programs of the new outcome measures, the Secretary has established 
very low measures for FY 1999. It is the Secretary's view that any 
school or program that cannot meet the 5 percent thresholds and the 
retention ratio described above cannot reasonably be considered to have 
a strong commitment to the recruitment and retention of individuals 
from disadvantaged backgrounds. However, recognizing that these initial 
levels are very low, and that many schools and programs have indicated 
since the SDS program began that they have activities in place to 
support the education of individuals from disadvantaged backgrounds, 
the Secretary is proposing that the outcome-based measures with which a 
school or program must comply to be eligible to receive SDS funds be 
increased, for FY 2000, to the following levels:
    (1) Individuals from disadvantaged backgrounds must comprise at 
least 10 percent of the total enrollment in the school or program for 
which funds are requested, based on enrollment data for academic year 
1998-99;
    (2) Individuals from disadvantaged backgrounds must comprise at 
least 10 percent of the total graduates from the school or program for 
which funds are requested, based on graduates for academic year 1998-
99; and
    (3) The ratio of individuals from disadvantaged backgrounds who 
graduated, compared with the individuals from disadvantaged backgrounds 
who are enrolled, must be at least 15 percent for 5-year programs, 20 
percent for 4-year programs, 25 percent for 3-year programs, and 40 
percent for 2-year programs.
    The Secretary intends that the proposed threshold levels for 
determining a school or program's eligibility will continue to increase 
gradually each year until they reach an optimal level for assuring that 
disadvantaged students are represented in the health care workforce at 
levels that best address the HRSA goals of improved diversity and 
distribution.

Evaluation Criteria for Fiscal Year 1999

    For FY 1999, the Secretary is proposing that applications will be 
evaluated based on the degree to which a school or program meets the 
requirements listed above under ``School Eligibility.'' Guidance for 
presenting the information will be provided in the FY 1999 application 
materials. Due to the new eligibility requirements, all applicant 
schools and programs, including schools and programs that received 
funds for academic year 1998-99, must submit an application to be 
considered for funding in FY 1999.

Student Eligibility

    To qualify for the SDS program, a student would be required to:
    (1) Be a resident of the U.S. and either be a U.S. citizen, a U.S. 
national, an alien lawfully admitted for permanent residence in the 
U.S., a citizen of the Commonwealth of the Northern Mariana Islands, a 
citizen of the Commonwealth of Puerto Rico, or a citizen of the 
Republic of Palau, or a citizen of the Marshall Islands, or a citizen 
of the Federated States of Micronesia;
    (2) Meet the definition of an ``individual from a disadvantaged 
background'' as defined above; and
    (3) Have a financial need for a scholarship, in accordance with a 
need analysis procedure approved by the Department of Education (Pub. 
L. 105-244, Part F, The Higher Education Act of 1965 as amended). In 
addition, any student who is enrolled (or accepted for enrollment) in a 
health profession school or program must provide information on his or 
her parents' financial situation, regardless of the tax status of the 
student; and
    (4) Be enrolled (or accepted for enrollment) at an eligible school 
for enrollment as a full-time student in a program leading to a degree 
in a health profession or nursing.

Student Preferences

    The law requires that in providing SDS scholarships, the school or 
program give preference to students for whom the cost of attending an 
SDS school or program would constitute a severe financial hardship. 
Severe financial hardship is to be determined by the school or program 
in accordance with standard need analysis procedures prescribed by the 
Department of Education for its Federal student aid programs. The 
school or program has discretion in deciding how to determine which 
students have ``severe financial hardship,'' as long as the standard is 
applied consistently to all eligible students.
    The law also requires that schools give preference to former 
recipients of scholarships under sections 736 (EFN Scholarships) and 
740(d)(2)(B) (FADHPS Scholarships), as such sections existed on 
November 12, 1998. The Secretary is implementing this preference by 
making a separate allocation of funds for these students, based on 
information provided by schools (allopathic medical, osteopathic 
medical, and dental schools with former EFN and FADHPS recipients 
only), prior to allocating the remaining SDS money for all other 
eligible students.

Proposed Student Preference

    The Secretary is also proposing that, beginning in academic year 
2000-2001, schools or programs give preference in the awarding of SDS 
funds to students who have participated in an academic enrichment 
program funded in whole or in part by the Health Careers Opportunity 
Program (HCOP), authorized by section 739 of the Act. This preference 
is intended to help assure that students who have participated in HCOP 
programs are not deterred from enrolling in a health professions school 
or program due to a lack of financial aid. Under this preference, it 
would be the school's or program's responsibility to identify HCOP 
students to assure that they receive preference in the awarding of SDS 
funds. For example, the school or

[[Page 29662]]

program could ask, as part of the financial aid application, whether 
the student participated in an academic enrichment program funded by 
HCOP, or could work with the admissions office to determine which 
students have been involved in HCOP programs. The Secretary intends 
that schools and programs implement this preference without a 
significant additional burden. Under this preference, the school or 
program would continue to have discretion in determining the amount of 
funds to award to HCOP students, but would be required to identify and 
fund HCOP students (provided they have financial need) before funding 
other eligible students who do not meet a student preference.
    Schools and programs that currently have access to information on 
which students have participated in HCOP programs are encouraged to 
implement this preference beginning in academic year 1999-2000. 
However, since some schools and programs may not currently have access 
to this information, the Secretary would not require schools and 
programs to implement the preference for HCOP students until academic 
year 2000-2001.

Definitions

    Black or African American means a person having origins in any of 
the black racial groups of Africa.
    Hispanic or Latino means a person of Cuban, Mexican, Puerto Rican, 
South or Central American or other Spanish culture or origin, 
regardless of race.
    American Indian or Alaska Native means a person having origins in 
any of the original peoples of North and South America (including 
Central America) and who maintains tribal affiliation or community 
attachment.
    Definitions listed above are contained in Directive No. 15 of 
Office of Management and Budget Circular No. A-46, as revised.
    Native American as defined in Pub. L. 101-527, means American 
Indian, Alaska Native, Aleut, or Native Hawaiian.
    Graduate program in behavioral health and mental health practice 
means a graduate program in clinical psychology, clinical social work, 
professional counseling, or marriage and family therapy as defined in 
section 799B(1)(D) of the Act.
    Graduate program in clinical social work means an accredited 
graduate program in a public or nonprofit private institution in a 
State that provides training in a concentration in health or mental 
health care leading to a graduate degree in social work as defined in 
section 799B(1)(C) of the Act.
    Graduate program in marriage and family therapy means an accredited 
graduate program in a public or nonprofit private institution in a 
State that provides training in a concentration leading to a graduate 
degree in marriage and family therapy as defined in section 799B(1)(C) 
of the Act.
    Graduate program in professional counseling means an accredited 
graduate program in a public or nonprofit private institution in a 
State that provides training in a concentration leading to a graduate 
degree in gerontological counseling, mental health counseling, or 
rehabilitation counseling.
    Medically underserved community means any geographic area and/or 
population served by any of the following practice sites--

    (1) Community Health Centers (section 330 of the Act);
    (2) Migrant Health Centers (section 329 of the Act);
    (3) Health Care for the Homeless Grantees (section 340 of the Act);
    (4) Public Housing Primary Care Grantees (section 340A of the Act);
    (5) Rural Health Clinics, federally designated (section 1861(aa)(2) 
of the Social Security Act);
    (6) National Health Service Corps sites, freestanding (section 333 
of the Act);
    (7) Indian Health Service sites (Pub. L. 93-638 for tribally 
operated sites and Pub. L. 94-437 for Indian Health Service operated 
sites);
    (8) Federally Qualified Health Centers (section 1905(a) and (1) of 
the Social Security Act);
    (9) Primary Medical Care, Mental Health, and Dental Health 
Professional Shortage Areas (HPSAs) (designated under section 332 of 
the Act);
    (10) State or Local Health Departments as defined and published in 
the Federal Register Notice of April 4, 1994 (59 FR 15741-44); or
    (11) Ambulatory practice sites designated by State Governors as 
serving medically underserved communities as defined and published in 
the Federal Register Notice of April 4, 1994 (59 FR 15741-44).

Proposed Institutional Preferences

    The Senate Report accompanying Pub. L. 105-392 directs the 
Secretary to restrict eligibility, for purposes of ``allied health,'' 
to the following baccalaureate or graduate degree allied health 
professions schools or programs: Dental hygiene, medical laboratory 
technology, occupational therapy, physical therapy, radiologic 
technology, speech pathology, audiology, and registered dieticians 
(Senate Report 105-220, p. 20). Accordingly, for fiscal year 1999 and 
beyond, among allied health schools or programs, the Secretary proposes 
to give preference to the allied health schools or programs listed 
above.

Proposed Institutional Funding Priorities

    In accordance with section 737(c) of the Act, the Secretary shall 
give priority to eligible entities based on the proportion of 
graduating students going into primary care, the proportion of 
underrepresented minority students, and the proportion of graduates 
working in medically underserved communities. Any eligible school or 
program that qualifies for one or more funding priorities will receive 
extra weighting in the allocation formula.

Primary Care Funding Priority

    For purposes of determining which schools and programs receive 
priority based on the proportion of graduating students going into 
primary care, the Secretary proposes to define primary care to include:
    (1) Allopathic and osteopathic medical students that enter family 
medicine, general internal medicine, general pediatrics, and preventive 
medicine, and general osteopathic medicine. This is consistent with the 
statutory definition of primary care for the Primary Care Loan (PCL) 
program, authorized under section 723 of the Act;
    (2) General dentistry, which has been included as primary care for 
purposes of the Exceptional Financial Need (EFN) Scholarship program 
and the Financial Assistance for Disadvantaged Health Professions 
Students (FADHPS) program;
    (3) Nurse practitioners and nurse midwives who are practicing 
primary care; and
    (4) Physician assistants who are practicing primary care.
    For purposes of the SDS program, the Secretary is defining 
``primary care'' to include the above disciplines because, with the 
exception of general dentistry, they are involved in the provision of 
comprehensive and continuous care and provide an entry to the health 
care system. The Secretary has included general dentistry because it 
acts as the entry to the health care system for a particular type of 
care which is not covered by the other disciplines.
    For the above disciplines, a school or program may qualify for the 
primary care priority if at least 50 percent of its graduates from the 
specified year are practicing primary care. For allopathic and 
osteopathic medical schools, the determination of which schools are 
eligible for the funding priority would

[[Page 29663]]

be based on the same data used to determine compliance with the PCL 
school requirements. Thus, for the FY 1999 award process, priority 
would be based on the activities, during academic year 1997-98, of Post 
Graduate Year (PGY)-3 graduates (i.e., those who graduated during 
academic year 1994-95), but for FY 2000, priority would be based on the 
activities, during academic year 1998-99, of PGY-4 graduates (i.e., 
those who graduated during academic year 1994-95). This would allow 
allopathic and osteopathic medical schools to submit, for the SDS 
program, the same data submitted for the PCL program if they are PCL 
participants. For the remaining primary care disciplines, the 
determination of compliance would be based on the activities, during 
academic year 1997-98, of students who graduated during academic year 
1996-97.

Underrepresented Minority Funding Priority

    For purposes of granting priority based on the proportion of 
underrepresented minority students in FY 1999, the Secretary proposes 
to give priority to any school or program that has an underrepresented 
minority enrollment that is above the national average for the 
discipline. It is the Secretary's intention to gradually increase this 
percentage in future years until it is equal to the underrepresented 
minority enrollment needed to reach parity in the health care 
workforce.

Medically Underserved Community Funding Priority

    For purposes of granting priority based on the proportion of 
graduates working in medically underserved communities, the Secretary 
proposes to give priority to any school or program for which at least 
10 percent of the graduates from the specified year are practicing in 
medically underserved communities. It is the Secretary's intention to 
gradually increase this percentage in future years until it is 
representative of a level that has a meaningful impact on the 
elimination of medically underserved communities. For allopathic and 
osteopathic medical schools, the determination of which schools are 
eligible for the funding priority would be based on the same population 
of graduates used to determine compliance with the primary care funding 
priority. Thus, for the FY 1999 awards, priority would be based on the 
activities, during academic year 1997-98, of allopathic and osteopathic 
medical students who graduated 3 years earlier (academic year 1994-95), 
but for FY 2000, priority would be based on the activities, during 
academic year 1998-99, of allopathic and osteopathic medical students 
who graduated 4 years earlier (academic year 1994-95). For other 
schools and programs, priority would be based on the activities of 
students during 1997-98 who graduated in 1996-97. Schools and programs 
that do not have data on the percentage of their graduates who are 
practicing in medically underserved communities may still apply for SDS 
funds, but would not be considered for this funding priority.

Proposed Procedures for Calculating Awards

    Awards to eligible schools and programs would be calculated by 
comparing the weighted number of eligible students in each eligible 
school and program with the total weighted number of eligible students 
in all eligible schools and programs. For FY 1999 and beyond, the 
number of ``eligible students'' for each school or program would be the 
lesser of:
    (1) The number of disadvantaged graduates for academic year 1997-98 
multiplied times the number of years required to complete the program 
(based on a 9-month academic year); or
    (2) The total disadvantaged enrollment during academic year 1997-
98. For example, if a 4-year program had 100 disadvantaged graduates 
and a disadvantaged enrollment of 500, its award would be based on 400 
eligible students (100 graduates times 4). If another 4-year program 
had 100 disadvantaged graduates and a disadvantaged enrollment of 300, 
its award would be based on 300 eligible students (the total 
disadvantaged enrollment).
    After determining the number of eligible students at each school or 
program, this number would be adjusted to reflect the extra weighting 
associated with any funding priorities. Depending upon the number of 
schools and programs that qualify for one or more funding priorities, 
it is possible that some eligible schools and programs may not receive 
funding.

National Health Objectives for the Year 2000

    The Public Health Service 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 Scholarships 
for Disadvantaged Students program is related to the priority area of 
Academic and Community Partnership 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 20402-0325; 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 Department education programs 
and programs which provide comprehensive primary care services to the 
underserved.

Smoke-Free Workplace

    The Department strongly encourages all award recipients to provide 
a smoke-free workplace and promote the non-use of all tobacco products, 
and Pub. L. 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.
    Interested persons are invited to comment on the proposed 
eligibility criteria and preferences for participating institutions, 
institutional funding priorities and preferences, nonstatutory 
preference of awarding funds to prior HCOP recipients, and procedures 
for calculating scholarship awards. The comment period will close on 
July 2, 1999.
    All comments received before the deadline date will be considered 
before final acceptability of the eligibility criteria for 
participating institutions, institutional funding priorities and 
preferences, nonstatutory preference of awarding funds to prior HCOP 
recipients, and procedures for calculating scholarship awards for the 
FY 2000 will be applied.
    Written comments should be addressed to: Capt. Bruce C. Baggett, 
Director, Division of Student Assistance; Bureau of Health Professions, 
Health Resources and Services Administration, Parklawn Building, room 
8-48, 5600 Fishers lane, Rockville, Maryland 20857; telephone (301) 
443-5395.

Application Availability

    Applications are required from all schools and programs which are 
interested in applying for funding in FY 1999. The SDS application for 
FY 1999 must be filed via the Internet. Schools may access the SDS 
application at www.hrsa.gov/bhpr/dsa/sds. All applications and fiscal 
reports will be required to be filed electronically. However, if 
assistance is required,

[[Page 29664]]

please contact the Scholarship Team at the above address.
    The deadline for submitting application materials is July 2, 1999. 
The materials for this program have been approved by the Office of 
Management and Budget (OMB) under the Paperwork Reduction Act. The OMB 
clearance number is 0915-0061.
    The Catalog of Federal Domestic Assistance Number for the 
Scholarships for Disadvantaged Students program is 93.925. This program 
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 Systems Reporting 
Requirements.

    Dated: May 25, 1999.
Claude Earl Fox,
Administrator.
[FR Doc. 99-13925 Filed 6-1-99; 8:45 am]
BILLING CODE 4160-15-P