[Federal Register Volume 75, Number 121 (Thursday, June 24, 2010)]
[Notices]
[Page 36099]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-15354]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Resources and Services Administration


Legislative Changes to Primary Care Loan Program Authorized Under 
Title VII of the Public Health Service Act

AGENCY: Health Resources and Services Administration, HHS.

ACTION: Notice.

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SUMMARY: On March 23, 2010, President Obama signed into law the 
Affordable Care Act (ACA), Public Law 111-148. Section 5201 of the ACA 
changes the Primary Care Loan (PCL) program by: (1) Reducing the number 
of years for the primary health care service requirement; (2) lowering 
the interest rate for service default; and (3) eliminating the HHS 
requirement that parental financial information be submitted for 
independent students.

SUPPLEMENTARY INFORMATION: The PCL program was created through the 
Health Professions Education Extension Amendments of 1992 (Pub. L. 102-
408), which established a new requirement for the use of the Health 
Professions Student Loan funds for allopathic and osteopathic schools. 
The PCL program strives to increase the number of primary care 
physicians by providing long-term, low interest rate loans to full-time 
students with financial need pursuing a degree in allopathic or 
osteopathic medicine. Below are details on how the ACA changes Section 
723 of the Public Health Service Act (PHSA) regarding administration of 
the PCL program.

Primary Health Care Service Requirement

    Under the PCL program, students were required to enter and complete 
a residency training program in primary health care and practice in 
primary health care until the PCL borrower's loan was repaid in full. 
The ACA change requires that for any new PCLs made on or after March 
23, 2010, the PCL borrowers are to enter and complete residency 
training in primary health care and practice in primary health care for 
either 10 years (including the years spent in residency training) or 
through the date on which the loan is repaid in full, whichever occurs 
first. (Section 5201(a)(1)(B) of the ACA).

Service Default Interest Rate

    In the past, PCL borrowers who did not fulfill the service 
requirements and began practicing in a discipline or specialty other 
than primary health care were penalized by having their interest rate 
on the PCL recalculated at 18 percent. The ACA change requires that 
borrowers who receive a PCL on or after March 23, 2010, and fail to 
comply with the service requirements of the program will have their 
loans begin to accrue interest at an annual rate of 2 percent greater 
than the rate the student would pay if compliant. (Section 5201(a)(3) 
of the ACA.)

Parental Financial Information Requirement for Independent Students

    Prior to enactment of the new law, independent students were 
required to provide parental financial information to the school's 
financial aid office so that the school could consider all financial 
resources available to the independent student for a PCL. The ACA 
change eliminates the HHS requirement for independent students to 
provide parental financial information to determine financial need. At 
its discretion, a school may still require parental financial 
information for independent students seeking a PCL. (Section 5201(b) of 
the ACA.) For this program, an independent student is a student who is 
at least 24 years of age and has been independent for a minimum of 3 
years. Dependent students are still required to submit parental 
financial information.
    The ACA changes to the PCL program will require a participating 
school to revise its PCL master promissory note for new loans made on 
or after March 23, 2010, to be consistent with the ACA.

    Dated: June 21, 2010.
Mary K. Wakefield,
Administrator.
[FR Doc. 2010-15354 Filed 6-23-10; 8:45 am]
BILLING CODE 4165-15-P