[Federal Register Volume 64, Number 169 (Wednesday, September 1, 1999)] [Notices] [Pages 47849-47853] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 99-22804] ----------------------------------------------------------------------- DEPARTMENT OF HEALTH AND HUMAN SERVICES Health Resources and Services Administration Final Eligibility Criteria, Preferences, and Priorities for Scholarships for Disadvantaged Students SUMMARY: The Health Resources and Services Administration (HRSA) announces final eligibility criteria, preferences, and priorities for the Scholarships for Disadvantaged Students (SDS) program, 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. A notice which proposed eligibility criteria, preferences, and priorities for the SDS program was published in the Federal Register at 64 FR 29660, dated June 2, 1999. A period of 30 days was established to allow public comment concerning the proposed eligibility criteria, preferences, and priorities. Five comments were received. This notice discusses these comments and sets forth the final eligibility criteria, preferences, and priorities. EFFECTIVE DATE: The program elements described in this notice are for use in fiscal year (FY) 1999 and beyond and will become effective, except where indicated otherwise, for SDS funds awarded to schools in FY 1999 and beyond. 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, skills, and abilities required to enroll in and graduate from a health profession 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. The period of fund availability will be 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 [[Page 47850]] consistent with those the students entered into to receive EFN and FADHPS funds in FY 1998. (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. Statutory School Eligibility Requirements 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 underrepresented racial and ethnic minorities. Final Administrative School and Program Eligibility Criteria A school or program must comply with the following outcome-based measures 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; and (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. A school or program must comply with the following outcome-based measures to be eligible to receive SDS funds in FY 2000: (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; and (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. The threshold levels for determining a school or program's eligibility will continue to increase gradually beyond FY 2000 until students from disadvantaged backgrounds are represented in the health care workforce at levels that best address the HRSA goals of assuring access to health care for all Americans and eliminating health disparities among racial and ethnic minorities. Threshold levels for determining school or program eligibility for SDS funding beyond FY 2000 will be announced annually in the HRSA Preview and/or in SDS application materials. Comments on Proposed Administrative School and Program Eligibility Criteria Four comments were received concerning the proposed administrative school and program eligibility criteria. One comment objected to establishing a percentage quota for schools' acceptance of students from disadvantaged backgrounds, indicating that this could adversely affect the schools' decisions of acceptance. Although the commenter agreed that it is necessary to assist those from disadvantaged backgrounds, he felt that to create a ``must'' situation was not entirely fair. In response, the Department points out that these criteria carry out Congressional intent as expressed in the Senate Report accompanying Pub. L. 105-392. This report 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 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 has retained the first two outcome-based eligibility criteria as proposed. However, the Secretary notes that the measures to determine eligibility for FY 1999 are low in consideration of the criteria as a new requirement. It is the Secretary's view that any school or program that cannot meet the FY 1999 thresholds and retention ratio has not evidenced a strong commitment to the recruitment and retention of individuals from disadvantaged backgrounds. Recognizing that the FY 1999 initial levels are 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 outcome-based measures with which a school or program must comply to be eligible to receive SDS funds will be increased for FY 2000 and beyond. One commenter saw a potential problem with the third outcome-based measure which a school or program would have been required to meet to receive SDS funds. The proposed criterion had established ratios that compared graduates from disadvantaged backgrounds with the total number of students enrolled who are from disadvantaged backgrounds, based on the number of years required to complete the course of study. For example, the criterion had stated that in a four-year program, the ratio of disadvantaged students who graduate must be at least 20 percent of the total enrollment of disadvantaged students. The commenter found this reasonable if there is a steady number of disadvantaged students enrolling at the school, but inappropriate for a school that is increasing its disadvantaged enrollment. The Secretary agrees that this proposal, as drafted, could have adversely affected a school or program that is increasing its disadvantaged enrollment. In response, the Secretary has postponed use of this threshold until FY 2001, pending further analysis of how to most accurately measure this aspect of retention. For FY 2001, information on this measure will be provided in the HRSA preview and/or in SDS application materials. [[Page 47851]] Statutory Student Eligibility Requirements To qualify for the SDS program, a student is 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; (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. Statutory 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. Final Administrative Student Preference Beginning in academic year 2000-01, schools or programs must 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, or by the Nursing Workforce Diversity (NWD) Program (formerly Nursing Educational Opportunities Program (NEOP)), authorized by section 821 of the Act. This will help assure that students who have participated in HCOP and NWD programs are not deterred from enrolling in a health professions or nursing school or program due to a lack of financial aid. Under this preference, it is the school's or program's responsibility to identify HCOP or NWD students to assure that they receive preference in the awarding of SDS funds. For example, the school or program could ask, as part of the financial aid application, whether the student participated in an academic enrichment program funded by HCOP or NWD, or could work with the admissions office to determine which students have been involved in HCOP or NWD programs. The Secretary intends that schools and programs implement this preference without a significant additional burden. Under this preference, the school or program continues to have discretion in determining the amount of funds to award to HCOP or NWD students, but must identify and fund HCOP or NWD 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 or NWD 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 is not requiring schools and programs to implement the preference for HCOP or NWD students until academic year 2000-01. Comments on Proposed Administrative Student Preference Three comments were received on the proposal that, beginning in academic year 2000-01, 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. One commenter objected that, although on the surface this proposal has merit, many schools are unable to secure this type of highly competitive grant. The Secretary clarifies that this preference does not reduce the amount of SDS funding available to schools or programs that have not received HCOP grant funding, but merely assures that when a school or program awards the SDS money that it receives, it must consider students who participated in HCOP supported programs before considering students who do not qualify for a funding preference. Therefore, no change has been made. One commenter suggested that this provision be clarified to include, in addition to HCOP participants, students who have participated in academic enrichment programs funded in whole or in part by Nursing Workforce Diversity (NWD) grants (formerly known as Nursing Educational Opportunity Program (NEOP) grants), authorized by section 821 of the Act. The NWD grants are similar to the HCOP grants, but are directed toward nursing students. The Secretary concurs with this suggestion and has clarified the provision accordingly. 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 sec. 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 [[Page 47852]] degree in social work as defined in sec. 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 sec. 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). Final Institutional Preferences For fiscal year 1999 and beyond, among allied health schools or programs, the Secretary will give preference 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. 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. Final 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 is defining 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 (including Dental Public Health and Pediatric 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, including Dental Public Health and Pediatric Dentistry, because dentistry 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 is based on the same data used to determine compliance with the PCL school requirements. Thus, for the FY 1999 award process, priority is 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 will be based on the activities, during academic year 1998-99, of PGY-4 graduates (i.e., those who graduated during academic year 1994-95). Beyond FY 2000, priority will be based on the activities of PGY-4 graduates. This will 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 following measure will be used: (1) The determination of compliance for FY 1999 will be based on the activities, during academic year 1997-98, of students who graduated during academic year 1996-97; (2) the determination of compliance for FY 2000 will be based on the activities, during academic year 1998-99, of students who graduated during academic year 1997-98; and (3) the determination of compliance beyond FY 2000 will be based on the activities, during the most recently completed academic year, of students who graduated during the previous academic year. Comments on Proposed Primary Care Funding Priority Two comments were received on the primary care funding priority. One commenter stated that some professional schools have multiple missions (e.g., research as well as primary care) and may not be able to meet the 50 percent primary care threshold. The commenter indicated that it would be unfair not to give disadvantaged students at these schools the advantage of SDS funding, and that they would be penalized because of the school that they chose to attend. In response, the Department notes that the statute requires that priority be given to schools based on the percentage of primary care graduates, reflecting the Congress' continued concern regarding the shortage of primary care providers. The Department also clarifies that eligible schools which do not meet this funding preference can still receive SDS funds, but will not receive the additional weighting associated with this funding preference. Final Underrepresented Minority Funding Priority For purposes of granting priority based on the proportion of underrepresented minority students in [[Page 47853]] FY 1999, the Secretary will give priority to any school or program that has an underrepresented minority enrollment that is above the national average for the discipline. The percentage of underrepresented minority enrollment required to qualify for this funding priority will increase gradually beyond FY 1999 until it is equal to the underrepresented minority enrollment needed to reach parity in the health care workforce. The percentage required after FY 1999 will be announced annually in the HRSA Preview and/or SDS application materials. Final Medically Underserved Community Funding Priority For purposes of granting priority based on the proportion of graduates working in medically underserved communities in FY 1999, the Secretary will 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. The percentage of a school or program's graduates who must be practicing in medically underserved communities to qualify for this funding priority will increase gradually beyond FY 1999 until it is representative of a level that has a meaningful impact on the elimination of medically underserved communities. The percentage required after FY 1999 will be announced annually in the HRSA Preview and/or the SDS application materials. For allopathic and osteopathic medical schools, the determination of which schools are eligible for the funding priority will 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 will 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 will 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). Beyond FY 2000, priority will be based on the activities of PGY-4 graduates. For other schools and programs, the following measure will be used: (1) The determination of compliance for FY 1999 will be based on the activities, during academic year 1997-98, of students who graduated during academic year 1996-97; (2) the determination of compliance for FY 2000 will be based on the activities, during academic year 1998-99, of students who graduated during academic year 1997-98; and (3) the determination of compliance beyond FY 2000 will be based on the activities, during the most recently completed academic year, of students who graduated during the previous academic year. 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 will not receive the additional weighting associated with this funding priority. Final Procedures for Calculating Awards Awards to eligible schools and programs will 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, the number of ``eligible students'' for each school or program will 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 will 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 will be based on 300 eligible students (the total disadvantaged enrollment). After determining the number of eligible students at each school or program, this number will be adjusted to reflect the extra weighting associated with any funding priorities. For FY 2000, the number of ``eligible students'' for each school or program will be determined using the procedures described above for FY 1999, with the calculation based on disadvantaged data from academic year 1998-99. Beyond FY 2000, the same procedures will be followed, with the calculation based on disadvantaged data from the most recently completed academic year. Comments on Proposed Procedures for Calculating Awards One comment was received on the proposed procedures for calculating awards. This commenter objected to the possibility that an eligible school might not receive funding if it did not qualify for one or more of the funding priorities. The commenter stated that all schools that meet the required outcome measures are doing a credible job of enrolling and graduating disadvantaged students and should receive funding for these students. In response, the procedures for calculating awards for FY 1999 will assure that all eligible schools receive SDS 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, D.C. 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 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 award recipients to provide a smoke-free workplace and promote the non-use 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. (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: August 26, 1999. Claude Earl Fox, Administrator. [FR Doc. 99-22804 Filed 8-31-99; 8:45 am] BILLING CODE 4160-15-P