[Federal Register Volume 77, Number 100 (Wednesday, May 23, 2012)]
[Notices]
[Pages 30536-30540]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-12568]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Resources and Services Administration


Final Notice Regarding Updates and Clarifications of the 
Implementation of the Scholarships for Disadvantaged Students Program

AGENCY: Health Resources and Services Administration, Department of 
Health and Human Services.

ACTION: Notice.

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SUMMARY: The Health Resources and Services Administration (HRSA) 
announces updates and clarifications for the implementation of the 
Scholarships for Disadvantaged Students (SDS) program under authority 
of Section 737 of the Public Health Service Act (PHS Act). This notice 
supersedes all previous notices regarding the SDS program.
    A notice which proposed updates and clarified implementation of the 
SDS program was published in the Federal Register on March 20, 2012 (77 
FR 16244). A period of 30 days was established to allow public comment 
concerning the proposed updates and implementation. Twenty-two letters 
were received, each with multiple comments. This notice discusses the 
comments and sets forth the final updates and implementation to the SDS 
program.

DATES: Effective Date: The program clarifications described in this 
notice will be implemented in fiscal year (FY) 2012 and beyond and will 
become effective for SDS funds awarded to schools in FY 2012 and 
beyond.
    Purpose: HRSA is updating the SDS program to increase the impact of 
the program in the areas addressed in the program's authorizing 
statute. Specifically, the authorizing statute allows the Secretary to 
make grants to eligible entities that are carrying out a program for 
recruiting and retaining students from disadvantaged backgrounds, 
including students who are members of racial and ethnic minority groups 
(PHS Act, Sec. 737(d)(1)(B)). In addition, grantees provide 
scholarships to individuals who meet the following requirements: (1) 
Are from disadvantaged backgrounds; (2) have a financial need for a 
scholarship; and (3) are enrolled (or accepted for enrollment) at an 
eligible health professions or nursing school as a full-time student in 
a program leading to a degree in nursing or a health profession (PHS 
Act, Sec. 737(d)(2)(A-C)). Under the statute, priority is given 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 (PHS Act, Sec. 737(c)). There is also a 
requirement to award at least 16 percent of the available funds to 
schools of nursing (PHS Act, Sec. 740(a)).
    The SDS Program required updating, because the program grantee 
population had grown from 401 schools in FY 2000 to almost 700 health 
profession schools in FY 2011. Since all SDS eligible schools received 
grant awards, the funding had been divided into ever decreasing amounts 
per school over the years. Many of the schools, in an effort to provide 
funding to each of their disadvantaged students, spread the award 
equally among the disadvantaged students and the smaller school award 
amounts resulted in smaller student scholarship amounts. While the 
student scholarship amounts decreased, the tuition rates increased. For 
many students with insufficient financial resources, the small award 
size was unlikely to provide enough funding to continue in school. 
Also, the primary care and underrepresented minority student priority 
weights used were too small to adequately incentivize and reward 
schools that were successful in graduating primary care 
underrepresented minority students or who had excellent plans to 
improve their programs to recruit and retain students from 
disadvantaged

[[Page 30537]]

backgrounds, including students who are members of racial and ethnic 
minority groups. The primary care weights were also not enough to 
incentivize schools to increase the proportion of graduating students 
going into primary care. Additionally, the practice of awarding grants 
for 1 year at a time did not allow the schools to select financially 
disadvantaged applicants with greater assurance that a student would 
receive SDS financial aid for the entire time the student is enrolled.
    Changes: To provide larger award amounts to schools and to increase 
the retention and graduation of disadvantaged students, including 
students who are members of racial and ethnic minority groups, HRSA's 
Bureau of Health Professions (BHPr) announces the following changes to 
the SDS program:
    (1) Convert the formula-based SDS program to a competitive peer-
reviewed grant program.
    Comments: Four comments were received regarding the use of peer 
review in the grant award process. The first ``welcomed'' the change to 
a peer review process. The second comment was concerned that the peer 
review process did not include peer review of priority points. The 
third commenter believed that the application process for peer review 
would be a burden, and the fourth commenter gave no readily discernible 
reason for not supporting peer review.
    In response, HRSA points out that the base score totals 100 points 
and is determined by the results of the peer review. The additional 
priority points are calculated based on set numeric standards. 
Therefore, the majority of an applicant's score (100 out of 111 points 
total) will be derived from peer reviewers. The priority points (a 
maximum of 11 points, in addition to the maximum of 100 base points) 
will be based on an applicant's successful past performance and points 
will be designated using data provided by the applicant (percent of 
graduates entering service in medically underserved communities or 
primary care and the percent of students that are underrepresented 
minorities). The calculation of set numeric standards for the awarding 
of priority points does not require the judgment of a peer reviewer. 
The priority point evaluation process described is, in HRSA's 
consideration, the most objective means of evaluating applicants for 
the SDS program. Regarding the third comment about the application 
being burdensome, narrative grant applications are commonly used by 
HRSA health professions programs. The narrative grant application 
allows peer reviewers and HRSA to understand the applicant's approach 
and proposal more fully. The overall grant application format has been 
reviewed and approved for general use. In addition, since the grants 
will be awarded for multiple years, applicants will only apply once 
every four years instead of annually.
    (2) Convert the grant award from a current 1-year project period to 
a project period of 4-years. A successful institutional applicant would 
be awarded a 4-year project period with funding provided annually 
subject to appropriations, the availability of funds and successful 
progress.
    Comments: Eight comments were received on the project period. Two 
comments support the 4-year project period. One of them said, ``The 4-
year commitment will be key in incentivizing students to enter one of 
these much needed professions and allow the student to have a firm 
financial plan in tackling the cost of the education.'' Other comments 
included two that were concerned that Congress might not fund the full 
4-year project period; another was interested in knowing how a 2-year 
school would fare in funding with a 4-year cycle; another worried that 
a student's economic status might change over the 4-year period, and 
another provided no readily discernible reason for not supporting the 
change.
    In response, the multi-year project period has historically been 
used by many HRSA health profession training programs. There is no 
concern that the SDS program would encounter any special difficulties. 
Grants are awarded with a multiyear project period which allows 
grantees the opportunity to plan for long-term activities. Regarding 
the remaining comments on the project period, there appears to be a 
misunderstanding regarding the school award project period and the 
student award. The SDS school 4-year project period assures the school 
of SDS funding each year, pending availability of funding and dependent 
upon the school's performance. The school has the responsibility to 
select the SDS students each year and the school must ensure recipients 
comply with all eligibility requirements each year. Schools may not 
provide a student with all four years of funding in the first year, 
however; the school may fund the same student each year if the school 
has the funds and the student meets the eligibility requirements. 
Having a 2-, 3- or 4-year curriculum should not be an issue.
    (3) Add a new requirement that individual student awards must be at 
least 50 percent of the student's annual tuition costs, for tuition 
$30,000 or less, but no student can be awarded over $15,000 SDS funds 
per year. Individual student awards must be $15,000 for students whose 
tuitions are over $30,000 per year. The use of funds have not changed 
and the amount of the scholarship still may not exceed a recipient's 
cost of tuition expenses, other reasonable educational expenses, and 
reasonable living expenses incurred in attendance at the SDS eligible 
health professions school. As before, the scholarship may be expended 
by the student only for such allowable costs.
    Comments: There were 11 comments on the tuition award amounts. 
Three comments supported the change. Six comments said they prefer to 
provide scholarships to more students rather than increase scholarship 
amounts to fewer students and there was concern that they would not be 
able to fund as many students as they usually do. One of the six said 
her preference was to leave the scholarship amount entirely up to the 
grantee. Another comment suggested lowering the minimum scholarship 
amount and another suggested having a minimum per semester rather than 
per year.
    In response, HRSA maintains that providing small amounts to more 
students is unlikely to affect student outcomes in a way consistent 
with the statutory aims. The requirement of 50 percent of the tuition 
up to $15,000 per year will provide a significant award amount to allow 
disadvantaged students with financial need to better complete their 
health profession education. A 50 percent tuition per year award 
minimum provides more flexibility than a per semester minimum. 
Regarding the concern that a school may have to select fewer SDS 
students due to the changes being made, HRSA points out that the total 
grant award to a school will be based on the disadvantaged students' 
need up to $650,000 rather than basing it on a formula that determines 
the portion of shared available funds.
    (4) Increase the weight and provide a range of points for primary 
care and underrepresented minority priorities.
    Comments: There were 4 comments regarding the weights for the 
priority points. Two comments supported the priority point weights. One 
comment that supported the weights also said attaining high percentages 
of graduates entering primary care service would be difficult. One 
commenter did not like the high weight on primary care and the other 
did not like the high weight given for applicants with high percentages 
of underrepresented minority students, or for graduates serving in 
primary care.

[[Page 30538]]

Both said that this would increase primary care at the expense of other 
disciplines.
    In response, service in primary care and having high percentages of 
students from underrepresented minority backgrounds are two of the 
priorities required by the authorizing statute. Increasing primary care 
practitioners and increasing the diversity of the health professions 
are emphasized in the statute. They are also both initiatives of HRSA 
and the priority points are weighted to meet these initiatives.
    (5) Expand the disciplines eligible for the primary care priority 
(currently allopathic and osteopathic medicine, dentistry, graduate 
nurse practitioners, and physician assistants) to also include dental 
hygiene and behavioral and mental health discipline (clinical 
psychology, clinical social work, professional counseling, marriage and 
family therapy).
    Comments: There were six comments regarding the primary care 
priority disciplines. Two supported the expansion. Another comment said 
they did not support the expansion, because it would decrease funds to 
those already receiving the primary care priority. Three additional 
commentors wanted HRSA to also add pharmacy as a primary care 
discipline, because in ``three states,'' there is ``* * * a second 
level of pharmacist licensure known as the pharmacist clinician 
(Ph.C.). Under protocol with a physician, a Ph.C. acts as a mid-level 
provider with similar rights and responsibilities to that of a Nurse 
Practitioner or Physician Assistant.''
    In response to the comment that disciplines eligible for the 
primary care priority should not be expanded, because the change might 
decrease the amount of funds to current primary care priority 
recipients, HRSA points out that the identified primary care priority 
disciplines can rationally and consistently be defined as primary care 
across the states following the IOM definition. Possible funding 
scenarios should not be a criterion for deciding whether a discipline 
is primary care. In response to those commentors who wanted to expand 
the primary care definition to include disciplines that had a primary 
care role in three states, HRSA points out that the expanded list of 
disciplines proposed were those with fairly consistent licensure and 
duties nationally. Seven states offer prescribing privileges and many 
other states support collaborative drug therapy management, thereby 
expanding scope of practice and allowing pharmacists to work in a team 
environment to initiate, modify or continue drug therapy for a specific 
patient. HRSA will continue to assess the pharmacist clinician 
occupation for possible inclusion in the primary care discipline 
category in the future.
    (6) Use the Institute of Medicine's primary care definition to 
identify primary care service for the primary care priority within the 
eligible primary care disciplines:

    Primary Care is the provision of integrated, accessible health 
care services by clinicians who are accountable for addressing a 
large majority of personal health care needs, developing a sustained 
partnership with patients, and practicing in the context of family 
and community. (Institute of Medicine. Primary Care: America's 
Health in a New Era. Washington, DC: National Academy Press, 1996).

    Comments: There were three comments regarding the use of the IOM 
definition. Two supported the use of the definition. Another comment 
did not support the use of the IOM definition unless there would be 
full disclosure that other health professions, authorized to 
participate in the SDS program, were also included in the primary care 
priority.
    In response, the primary care definition as written does not 
mention specific disciplines but describes tasks to better define 
primary care activities.
    (7) Increase the school eligibility requirement for disadvantaged 
students enrolled and disadvantaged students graduated to 20 percent 
each.
    Comments: There were six comments regarding the increase in the 
eligibility requirements. One comment said that the change ``seems 
reasonable'' though it may be difficult to maintain. Another said that 
its school would likely be able to attain the 20 percent levels but 
worried about what would happen if after receiving the grant, the 
school fell below 20 percent for one of the years. Four other comments 
said that raising the eligibility to 20 percent would eliminate the 
school from the program and two of those who said they would be 
eliminated, went on to say that the discipline itself as a whole didn't 
have near the 20 percent level of disadvantaged students or 
practitioners.
    In response, the proposed increase in eligibility that will occur 
in FY 2012 was designed in order to focus funds on schools that have a 
strong commitment to educating and graduating disadvantaged students. 
Based on an analysis of FY 2010 grantees, over 400 programs met the 20 
percent eligibility criteria. The SDS program eligibility criteria 
could help drive improvement in disciplines with low percentages of 
disadvantaged enrollees and graduates. Prior to the FY 2012 increase, 
the level had not been increased since 1999.
    Eligibility Requirements: Eligible entities are: schools of 
allopathic and osteopathic medicine; dentistry; optometry; pharmacy; 
podiatric medicine; veterinary medicine; nursing (associate, diploma, 
baccalaureate, and graduate degree); public health; chiropractic; 
allied health (baccalaureate and graduate degree programs of dental 
hygiene, medical laboratory technology, radiology technology, speech 
pathology, audiology, registered dieticians, and occupational therapy 
and physical therapy); mental and behavioral health (graduate degree 
programs in clinical psychology, clinical social work, professional 
counseling, marriage and family therapy); and entities providing 
physician assistant training programs. (PHS Act, Sec. 737(d)(1)(A)).
    There are five requirements a school must meet in order to be 
eligible for the SDS grant program. The requirements, starting in FY 
2012, are as follows:
    (1) Twenty (20) percent of enrolled students must be disadvantaged;
    (2) Twenty (20) percent of graduates must be disadvantaged;
    (3) Schools must have a recruitment program for disadvantaged 
students;
    (4) Schools must have a retention program for disadvantaged 
students; and
    (5) Student award must be at least 50 percent of the annual tuition 
cost with a $15,000 maximum award per year, when annual tuition is 
$30,000 or below--above $30,000 annual tuition equals $15,000 award.
    Student Eligibility Requirements: To qualify for the SDS program, a 
student must:
    (1) Meet the following definition of an individual from a 
disadvantaged background. For the purposes of the SDS program, an 
individual from a disadvantaged background is defined as one who: (a) 
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 (b) comes from a family with an annual income below the established 
Census Bureau low-income thresholds, adjusted by the Secretary for 
health professions and nursing programs eligibility;
    (2) Have a financial need for a scholarship, in accordance with a 
need analysis procedure approved by the Department of Education (20 
U.S.C. 1087kk-1087vv). In addition, any student who is enrolled (or 
accepted for enrollment) in a health profession school or program must 
provide

[[Page 30539]]

information on his or her parents' financial situation or his or her 
own depending upon the tax status of the student; and
    (3) Be enrolled (or accepted for enrollment), as a full-time 
student, at an eligible health professions or nursing school in a 
program leading to a degree in nursing or a heath profession (PHS Act, 
Sec. 737).
    Comments: There was one comment regarding financial information 
required on graduate students. That comment requested that HRSA change 
its policy requesting that graduate students provide parental financial 
information to determine financial need, because it may be burdensome 
to the students. The commenter noted that some Department of Education 
loan programs do not require parental information.
    In response, HRSA points out that SDS is a scholarship program, and 
strong documentation is needed for the student scholarship selection 
process. The consequence of providing a scholarship to a non-eligible 
student is the loss of funds, whereas with loans, students repay the 
funds with interest. During technical assistance meetings, many 
grantees were very favorable to the SDS financial-need documentation 
policy and said that the information was needed to both make 
appropriate student selections and the policy helpful when explaining 
financial document requests to students. SDS policy is for the parental 
income to be used to determine a student's eligibility for economically 
disadvantaged status in all cases except in those cases where the 
student is considered independent by being at least 24 years old and 
has not been listed as a dependent on his or her parents' income tax 
for 3 or more years. In those cases, the student's family income will 
be used instead of parental family income.
    Student Award Selection: The law requires that in providing SDS 
scholarships, the school or program must 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 awards to students who were 
former recipients of scholarships under PHS Act sections 736 
(Exceptional Financial Need Scholarships) and 740(d)(2)(B) (Financial 
Assistance for Disadvantaged Health Professions Students Scholarships), 
as such sections existed on November 13, 1998, if such recipients are 
still students in financial need.
    Elements of Peer Review: Peer reviewers will assess a school's 
allocations based on accomplishment of, or commitment to, the following 
criteria:
    (1) Degree to which applicant demonstrates its commitment to the 
education of disadvantaged students, including underrepresented 
minorities (10 points);
    (2) Degree to which applicant demonstrates its commitment to 
increasing primary care practitioners (10 points);
    (3) Degree to which applicant demonstrates its commitment to 
increasing graduates working in medically underserved communities 
(MUCs) (10 points);
    (4) Level of achievements and successes in educating disadvantaged 
students, including underrepresented minorities, in a way that 
eliminates barriers along the educational pipeline for disadvantaged 
students and assures graduates practice in primary care and serve in 
MUCs (30 points); and
    (5) Level of adequacy of proposed plan to increase and educate 
disadvantaged students, including underrepresented minorities, and 
retain students in their academic programs, and encourage them to enter 
primary care and serve in MUCs (40 points).
    Comments: There were 17 different comments regarding the review 
criteria. One comment said that the school liked the focus on 
recruitment and retention programs. Three comments indicated that they 
would prefer that HRSA provide administrative costs to acquire the data 
needed to apply and report on students. Eight comments requested that 
the changes not be implemented this year for the following reasons: in 
order to complete a study of the likely outcomes of these changes, to 
provide time for institutions to gather information to write better 
applications, and to assure the SDS scholarship funds can be provided 
to students this year and be a recruitment tool despite the later than 
normal grantee award date this year. Two comments said that the MUC 
service review criterion was problematic since service was a student 
decision and beyond the school's control. One comment said that the 
goal of increasing disadvantaged students in primary care would destroy 
the SDS program as it currently exists. Two comments were that the 
school disagreed with the focus on primary care.
    In response, HRSA is unable to fund administrative costs for this 
program at this time. Regarding the request for an impact study, HRSA 
will base the programmatic changes on information it has gathered from 
grantees about program operations and analysis of grantee data. HRSA 
will assess the impact of these changes after they are implemented to 
determine if they had the intended effect. In regard to the additional 
application burden, HRSA points out that the applications for the SDS 
will include much of the same information requested in the past, but 
will have additional opportunities for applicants to describe their 
programs in narrative and check-box format. Program has determined that 
the time allocated to complete the application will be appropriate to 
satisfy any new requirements. Regarding timing of the awards in FY 
2012, HRSA grantees (in meetings with HRSA) said that schools will be 
able to award the funds requested for FY 2012 even if the awards come 
out in September. In response to the comments regarding the MUC review 
criteria, the SDS program already awards funds to schools that have 
programs and activities to support and encourage students to provide 
service in MUCs and grantees have been tracking students' service in 
MUCs for years. The mission of the SDS program is to provide funding to 
disadvantaged students, including students from racial and ethnic 
minority backgrounds in financial need, so they may study at and 
graduate from a health professions school and enter a health 
profession, preferably in primary care in a medically underserved 
community, as per the statutory preferences. The review criteria focus 
on program activities that will produce those results.
    Priority Scoring: Additional points ranging from two through four 
will be given for having a high percentage of the following priorities: 
(1) Underrepresented minority students and (2) graduates entering 
primary care service. Additional points ranging from one through three 
will be given for having a high percentage of graduates serving in 
medically underserved communities. The number of points awarded to each 
applicant for meeting the priorities will be determined by the 
applicant's percentage in meeting these priorities. A higher number of 
points will be assigned to applicants with higher percentages of 
meeting these priorities. There will be no institutional or discipline 
preferences.

[[Page 30540]]

    Additional Letters: There were three additional letters that did 
not contain comments. They asked questions that were answered in the 
text of this Notice or required very detailed responses that were more 
appropriate for response in technical assistance meetings.

    Dated: May 17, 2012.
Mary K. Wakefield,
Administrator.
[FR Doc. 2012-12568 Filed 5-22-12; 8:45 am]
BILLING CODE 4165-15-P