[Federal Register Volume 67, Number 150 (Monday, August 5, 2002)]
[Proposed Rules]
[Pages 50622-50626]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-19610]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Public Health Service

42 CFR Part 68d

RIN 0925-AA18


Public Health Service; National Institutes of Health Loan 
Repayment Program for Research Generally (GR-LRP)

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: The National Institutes of Health (NIH) proposes to issue 
regulations to implement section 487C of the Public Health Service Act, 
as amended, authorizing the NIH Loan Repayment Program for Research 
Generally. The purpose of the program is to recruit and retain 
appropriately qualified health professionals, as employees of the NIH, 
to conduct research by providing repayment of qualified educational 
loans.

DATES: Comments must be received on or before October 4, 2002, 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, 6011 Executive Blvd., 
Room 601, MSC 7669, Rockville, MD 20892. Comments may also be sent 
electronically by FAX (301-402-0169) or e-mail ([email protected]).

FOR FURTHER INFORMATION CONTACT: Jerry Moore at the address above or 
telephone 301-496-4607 (not a toll-free number).

SUPPLEMENTARY INFORMATION: On June 10, 1993, the United States Congress 
enacted the NIH Revitalization Act of 1993 (Public Law 103-43). Section 
1621 of Pub. L. 103-43 amended the Public Health Service (PHS) Act by 
adding a new section 487C (42 U.S.C. 288-3). Subsequently, section 410 
of the Health Professions Education Partnership Act of 1998 (Public Law 
105-392), enacted on November 13, 1998, amended section 487C. As 
amended, section 487C directs the Secretary to implement and establish 
a program of entering into agreements with appropriately qualified 
health professionals under which such health professionals agree to 
conduct research as employees of NIH for a period of at least three 
years, research in consideration of the Federal Government agreeing to 
repay, for each year of service, not more than $35,000 of the principal 
and interest of the educational loans of such health professionals. 
This program is known as the NIH Loan Repayment Program for Research 
Generally (GR-LRP). Section 487C further states that the provisions of 
subpart III of part D of title III of the PHS Act, which apply to the 
National Health Service Corps Loan Repayment Program, apply to the Loan 
Repayment Program for Research Generally, except to the extent they are 
inconsistent with the provisions of section 487C. The NIH is proposing 
to amend title 42 of the Code of Federal Regulations by adding a new 
part 68d to govern the administration of this loan repayment program.
    The proposed regulations specify 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 regulations. The following is provided 
as public information.

Executive Order 12866

    Executive Order 12866, Regulatory Planning and Review, 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 
Sec. 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. The OIRA reviewed this proposed rule under 
Executive Order 12866 and is deemed a significant regulatory action.

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. The Secretary 
certifies that any final rule resulting from this proposal will not 
have any such impact.

Executive Order 13132

    Executive Order 13132, Federalism, requires that federal agencies 
consult with State and local government officials in the development of 
regulatory policies with federalism implications. The Acting Director, 
NIH, reviewed the proposed rule as required under the Order and 
determined that it does not have any federalism implications. The 
Secretary certifies that

[[Page 50623]]

the proposed rule will not have an effect on the States, or on the 
distribution of power and responsibilities among the various levels of 
government.

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 used by the NIH Loan Repayment Program for 
Research Generally have been approved by OMB under OMB No. 0925-0361 
(expires December 31, 2004).

Catalog of Federal Domestic Assistance

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

93.232--NIH Loan Repayment Program for General Research

List of Subjects in 42 CFR Part 68d

    Health--medical research; Loan repayment programs--health.

    Dated: March 31, 2002.
Ruth L. Kirschstein,
Acting Director , National Institutes of Health.
    Approved: May 29, 2002.
Tommy G. Thompson,
Secretary.
    For reasons presented in the preamble, it is proposed to amend 
title 42 of the Code of Federal Regulations by adding a new Part 68d to 
read as set forth below.

PART 68d--NATIONAL INSTITUTES OF HEALTH (NIH) LOAN REPAYMENT 
PROGRAM FOR RESEARCH GENERALLY (GR-LRP)

Sec.
68d.1  What is the scope and purpose of the NIH Loan Repayment 
Program for Research Generally (GR-LRP)?
68d.2  Definitions.
68d.3  Who is eligible to apply?
68d.4  Who is eligible to participate?
68d.5  Who is ineligible to participate?
68d.6  How do individuals apply to participate in the GR-LRP?
68d.7  How are applicants selected to participate in the GR-LRP?
68d.8  What does the GR-LRP provide to participants?
68d.9  What loans qualify for repayment?
68d.10  What does an individual have to do in return for loan 
repayments received under the GR-LRP?
68d.11  How does an individual receive loan repayments beyond the 
initial three-year contract?
68d.12  What will happen if an individual does not comply with the 
terms and conditions of participation in the GR-LRP?
68d.13  Under what circumstances can the service or payment 
obligation be canceled, waived, or suspended?
68d.14  When can a GR-LRP payment obligation be discharged in 
bankruptcy?
68d.15  Additional conditions.
68d.16  What other regulations and statutes apply?

    Authority: 42 U.S.C. 288-3.


Sec. 68d.1  What is the scope and purpose of the NIH Loan Repayment 
Program for Research Generally (GR-LRP)?

    The regulations of this part apply to the award of educational loan 
payments under the NIH Loan Repayment Program for Research Generally 
(GR-LRP) authorized by section 487C of the Public Health Service Act 
(42 U.S.C. 288-3). The purpose of this program is to address the need 
for biomedical and behavioral researchers by providing an economic 
incentive to appropriately qualified health professionals to conduct 
research as employees of the NIH.


Sec. 68d.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 GR-LRP.
    Approved research means research approved by the General Research 
Loan Repayment Committee.
    Commercial loans means loans made for educational purposes 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 means the minimum amount of qualified educational 
debt an individual must have, on their program eligibility date, in 
order to be eligible for Program benefits. Debt threshold is the amount 
of qualified educational debt equal to 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 
undergraduate, graduate, and health professional school's education, 
including the tuition expenses and other educational expenses such as 
fees, books, supplies, educational equipment and materials, and 
laboratory expenses.
    General Research Loan Repayment Committee (GR-LRC) means the 
scientific board, whose members are appointed by the Director, NIH, 
assembled to review, rank, and approve or disapprove General Research 
Loan Repayment Program applications. The GR-LRC is composed of NIH 
scientific staff and chaired by the Deputy Director for Intramural 
Research, NIH. Members are nominated by the Deputy Directors for 
Extramural and Intramural Research, NIH.
    General Research Loan Repayment Program (GR-LRP or Program) means 
the NIH Loan Repayment Program for Research Generally authorized by 
section 487C of the Act, as amended.
    General Research Loan Repayment Program (GR-LRP or Program) 
contract refers to the agreement, which is signed by an applicant and 
the Secretary, wherein the applicant agrees to engage in approved 
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.
    Government loans means loans made by Federal, State, county, or 
city agencies which are authorized by law to make such loans.
    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 GR-LRP has 
been approved and whose Program contract has been executed by the 
Secretary.
    Participant obligation means the amount of qualified educational 
debt payable by the participant. Specifically, participants are 
obligated to repay 50 percent of their debt threshold.
    Program means the NIH Loan Repayment Program for Research 
Generally.
    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 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)

[[Page 50624]]

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 proportion, as established by the 
Secretary, of an individual's total qualified educational debt relative 
to the NIH salary, which can be paid by the GR-LRP. Specifically, 
qualifying educational debt amounts in excess of 50 percent of the debt 
threshold will be considered for repayment.
    Salary means base pay. For individuals appointed under Title 42, 
salary includes base pay only; for those employed under Title 5, it 
includes base pay plus locality pay. For individuals appointed under 
the U.S. Commissioned Corps, salary includes base pay plus Basic 
Allowance for Subsistence (BAS) and Basic Allowance for Housing (BAH) 
and excludes special pays.
    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. 68d.3  Who is eligible to apply?

    To be eligible to apply to the GR-LRP, an individual must be a 
citizen, national, or permanent resident of the United States; hold a 
Ph.D., M.D., D.O., D.D.S., D.M.D., D.V.M., D.P.M., Pharm.D., A.D.N./
B.S.N., or equivalent degree; and have qualified educational debt in 
excess of the debt threshold.


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

    To be eligible to participate in the GR-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 
GR-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 officer.


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

    The following individuals are ineligible for GR-LRP participation:
    (a) Persons who are not eligible applicants as specified under 
Sec. 68d.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 GR-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, National Institutes of Health 
Undergraduate Scholarship Program for Individuals from Disadvantaged 
Backgrounds, and Indian Health Service Scholarship Program; or
    (c) Persons who are not NIH employees, such as Intramural Research 
Training Award (IRTA) recipients, Cancer Research Training Award (CRTA) 
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.


Sec. 68d.6  How do individuals apply to participate in the GR-LRP?

    An application for participation in the GR-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. 68d.7  How are applicants selected to participate in the GR-LRP?

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


Sec. 68d.8  What does the GR-LRP provide to participants?

    (a) Loan repayments. For each year of service the individual agrees 
to serve, with a minimum of 3 years of obligated service, the Secretary 
may pay up to $35,000 per year of a participant's repayable debt.
    (b) Payments on repayable debt will be made directly to a 
participant's lender(s). If there is more than one outstanding 
qualified educational loan, the Secretary will repay the loans in the 
following order, unless the Secretary determines significant savings 
would result from paying loans in a different order of priority:
    (1) Loans guaranteed by the U.S. Department of Health and Human 
Services;
    (2) Loans guaranteed by the U.S. Department of Education;
    (3) Loans made or guaranteed by a State;
    (4) Loans made by a School;
    (5) Loans made by other entities.
    (c) Tax liability payments. The Secretary shall make payments to 
partially reimburse the participant for the increased Federal tax 
liability resulting from loan repayments received under the GR-LRP. 
These Federal tax payments are 39 percent of the total annual loan 
repayments being made and are made to the Federal Reserve Bank as a 
credit to the participant's IRS account. The Secretary may make 
additional tax liability payments to those participants who show 
increased Federal, State and/or local tax liability.
    (d) Under paragraphs (a), (b) and (c) of this section, the 
Secretary will make payments in the discharge of debt and resulting tax 
liabilities to the extent

[[Page 50625]]

appropriated funds are available for these purposes.


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

    (a) The GR-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 GR-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, 
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, Undergraduate Scholarship Program for Individuals from 
Disadvantaged Backgrounds, 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;
    (7) Loans (other than consolidation loans) for which promissory 
notes have been signed after the program eligibility date; and
    (8) Payments on loan consolidations which include the underlying 
loans of spouses or other individuals.


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

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


Sec. 68d.11  How does an individual receive loan repayments beyond the 
initial three-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 research as an 
NIH employee.


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

    (a) Absent withdrawal (see Sec. 68d.2), or termination under 
paragraph (d) of this section, any participant who fails to complete 
the minimum three-year service obligation required under the initial 
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 obligation.
    (2) Participants who leave after the first year but before the end 
of 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.
    (3) Participants who leave after the second year but before the end 
of the third year of the contract are liable for amounts already paid 
by the NIH on behalf of the participant for periods of obligated 
service not served plus $10,000 if the individual fails to provide a 
one-year notice of the intended breach (or such shorter time as is 
determined to be adequate to find a replacement).
    (b) Payments of any amount owed under paragraph (a) of this section 
shall be made within one year of the participant's breach.
    (c) Participants who sign a continuation contract for any year 
beyond the initial three-year period and fail to complete the one-year 
period 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 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-approved 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 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 research, except for the 
pro rata amount of any benefits advanced beyond the period of completed 
service.


Sec. 68d.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 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. 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,

[[Page 50626]]

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. 68d.14  When can a GR-LRP payment obligation be discharged in 
bankruptcy?

    Any payment obligation incurred under Sec. 68d.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 non-discharge of the obligation would be 
unconscionable.


Sec. 68d.15  Additional conditions.

    When a shortage of funds exists, participants may be funded only 
partially, as determined by the Secretary. However, once a GR-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 participant, 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 participant. The 
Secretary may impose additional conditions as deemed necessary.


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

    Several other regulations and statutes apply to this part. These 
include, but are not necessarily limited to:
    (a) Debt Collection Act of 1982, Public Law 97-365, as amended (5 
U.S.C. 5514);
    (b) Fair Credit Reporting Act (15 U.S.C. 1681 et seq.);
    (c) Federal Debt Collection Procedures Act of 1990, Public Law 101-
647 (28 U.S.C. 1); and
    (d) Privacy Act of 1974 (5 U.S.C. 552a).

[FR Doc. 02-19610 Filed 8-2-02; 8:45 am]
BILLING CODE 4140-01-P