[Federal Register Volume 77, Number 247 (Wednesday, December 26, 2012)]
[Proposed Rules]
[Pages 75918-75933]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-30811]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AO34


VA Health Professional Scholarship and Visual Impairment and 
Orientation and Mobility Professional Scholarship Programs

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its 
VA Health Professional Scholarship Program (HPSP) regulations. VA also 
proposes to establish regulations for a new program, the Visual 
Impairment and Orientation and Mobility Professional Scholarship 
Program (VIOMPSP). These proposed regulations would comply with and 
implement sections 302 and 603 of the Caregivers and Veterans Omnibus 
Health Services Act of 2010 (the 2010 Act). Section 302 of the 2010 Act 
established the VIOMPSP, which authorizes VA to provide financial 
assistance to certain students seeking a degree in visual impairment or 
orientation or mobility, in order to increase the supply of qualified 
blind rehabilitation specialists for VA and the United States. Section 
603 of the 2010 Act reauthorized and modified HPSP, a program that 
provides scholarships for education or training in certain healthcare 
occupations.

DATES: Comments must be received by VA on or before February 25, 2013.

ADDRESSES: Written comments may be submitted: By mail or hand-delivery 
to Director, Regulations Management (02REG), Department of Veterans 
Affairs, 810 Vermont Avenue NW, Room 1068, Washington, DC 20420; by fax 
to (202) 273-9026; or through http://www.Regulations.gov. Comments 
should indicate that they are submitted in response to ``RIN 2900-AO34-
VA Health Professional Scholarship and Visual Impairment and 
Orientation and Mobility Professional Scholarship Programs.'' All 
comments received will be available for public inspection in the Office 
of Regulation Policy and Management, Room 1063B, between the hours of 8 
a.m. and 4:30 p.m., Monday through Friday (except holidays). Call (202) 
461-4902 for an appointment. (This is not a toll-free number.) In 
addition during the comment period, comments may be viewed online 
through the Federal Docket Management System at http://www.Regulations.gov.

FOR FURTHER INFORMATION CONTACT: Nicole Nedd, Healthcare Talent 
Management Office, Department of Veterans Affairs, 1250 Poydras Street, 
Suite 1000, New Orleans, LA 70113; (504) 565-4900. (This is not a toll-
free number.)

SUPPLEMENTARY INFORMATION: Pursuant to 38 U.S.C. 7601 through 7619, 
7633, 7634, and 7636, VA has promulgated regulations implementing the 
HPSP, codified at 38 CFR 17.600 through 17.612. As explained in current 
Sec.  17.600, the purpose of this program is to award scholarships ``to 
students receiving education or training in a direct or indirect 
health-care services discipline to assist in providing an adequate 
supply of such personnel for VA and for the Nation.'' This rulemaking 
proposes to amend the HPSP regulations in response to section 603 of 
the 2010 Act, Public Law 111-163, which amended the statutory authority 
for this program.
    Section 603(a) and (c) renumbered and amended 38 U.S.C. 7618 as 
section 7619 and added a new section 7618. Section 7619, as amended, 
establishes a new delimiting date of December 31, 2014, for the HPSP. 
The previous delimiting date for HPSP had been December 31, 1998, and, 
therefore, the program is no longer active. Although this new 
delimiting date does not by itself require revision to any of the 
regulations that were in place when the program was previously active, 
section 603(b) of the 2010 Act amended the eligibility requirements for 
the HPSP, codified in 38 U.S.C. 7612(b)(2), to allow a broader spectrum 
of candidates to qualify for the HPSP. Section 7618(a) of title 38, 
United States Code, as added by section 603(c) of the 2010 Act, 
requires VA to modify the HPSP so that it will be ``designed to fully 
employ Scholarship Program graduates as soon as possible, if not 
immediately, upon graduation and completion of necessary 
certifications, and to actively assist and monitor graduates to ensure 
certifications are obtained in a minimal amount of time.'' Paragraph 
(b) of 38 U.S.C. 7618 requires participants of the HPSP to ``perform 
clinical tours in assignments or locations determined by [VA] while the 
participants are enrolled in the course of education or training for

[[Page 75919]]

which the scholarship is provided.'' Finally, section 7618(c) requires 
VA to ensure that the graduates of the HPSP are assigned a mentor who 
is employed at the facility where the graduates will perform their 
obligated service. This rulemaking proposes regulatory revisions to 
implement these changes in statutory authority, and to make other 
programmatic changes that will clarify VA policy and how VA implements 
HPSP.
    This rulemaking also proposes new regulations to implement section 
302 of the 2010 Act. Section 302 of the 2010 Act established chapter 75 
of 38 U.S.C., which requires VA to create a scholarship program similar 
to the HPSP called the Visual Impairment and Orientation and Mobility 
Professional Scholarship Program (VIOMPSP). The purpose of the new 
program ``is to increase the supply of qualified blind rehabilitation 
specialists for [VA] and the Nation.'' 38 U.S.C. 7501(b). The statutory 
authority is substantively similar (and in many ways identical) to the 
existing authority governing the HPSP. The statutory similarities 
between the programs include certain defined terms, as well as certain 
provisions concerning failure to meet the obligations of the HPSP or 
the VIOMPSP.
    We propose that VA policies and regulations related to the two 
programs will be as similar as possible. To the maximum extent 
possible, we propose to utilize, amending as necessary, the existing 
regulations to govern the commonalities between both programs, and then 
to add additional regulations necessary to implement the new VIOMPSP. 
This will eliminate redundancies between the two programs, facilitate 
the administration of the program by VA, and make it easier for the 
public to understand the details of both programs. For example, VA and 
non-VA education professionals who seek or promote the use of 
government scholarships will be required to understand a smaller set of 
regulations than they would if we administered the two programs through 
entirely separate regulatory frameworks. In addition, promoting 
consistency will further the clear legislative intent that the programs 
be administered in a similar manner, as evidenced by the similarities 
between the authorizing statutes. We will discuss each proposed rule, 
seriatim, beginning with the amendments to the existing regulations 
governing the HPSP.
    As noted above, the HPSP is governed by current Sec. Sec.  17.600 
through 17.612. All sections not specifically discussed below would not 
be amended by this proposed rule. We also propose to establish new 
Sec. Sec.  17.625 through 17.636 to implement the new VIOMPSP.

Proposed VA Health Professional Scholarship Program Regulations

17.600 Purpose

    Current Sec.  17.600 sets forth the purpose of the regulations 
governing the HPSP, and states that it is designed to provide 
scholarships for education or training in ``[d]isciplines [that] 
include nursing, physical therapy, occupational therapy, and other 
specified direct or indirect health-care disciplines if needed by VA.'' 
38 CFR 17.600. We propose to remove this list of disciplines from Sec.  
17.600 and refer in proposed Sec.  17.603(b) to a list of disciplines 
in 38 U.S.C. 7401(1) and (3), where the list will be expanded to 
include additional disciplines required by changes in law. We believe 
that Sec.  17.600 should be a general regulation, and the specific 
disciplines eligible for consideration for the HPSP should be listed in 
the regulation governing eligibility. We would, therefore, state in 
proposed Sec.  17.600 that the individual must pursue ``a course of 
study leading to a degree in certain healthcare occupations [ ] listed 
in 38 U.S.C. 7401(1) and (3).''
    We also propose to add a new second sentence to Sec.  17.600 that 
would clarify the intent of the HPSP. Section 7601(b) of title 38, 
United States Code, states that ``[t]he purpose of [HPSP] is to assist 
in providing an adequate supply of trained health-care personnel for 
the Department [of Veterans Affairs] and the Nation.'' The proposed 
second sentence of 38 CFR 17.600 would state that ``[t]he HPSP allows 
VA to provide scholarship awards to facilitate recruitment and 
retention of employees in several hard-to-fill healthcare 
occupations.''

17.601 Definitions

    Current Sec.  17.601 contains definitions applicable ``[f]or the 
purpose of these regulations,'' and organizes the definitions in 
numbered paragraphs. Consistent with more modern organizational 
frameworks, we propose to list the definitions alphabetically. Except 
as described in this supplementary information, we do not propose any 
substantive changes to the existing definitions; this is simply a 
reorganization. Any term not specifically discussed in the 
Supplementary Information section of this rulemaking would contain the 
definition found in current Sec.  17.601.
    We propose to change the introductory paragraph to Sec.  17.601 to 
indicate that the definitions would apply to Sec. Sec.  17.600 through 
17.636, because, as noted above, the HPSP and the VIOMPSP will be 
administered in a similar manner. Rather than repeat all the common 
definitions in the VIOMPSP regulations, which would be governed by 
Sec. Sec.  17.625 through 17.636, proposed later in this rulemaking, we 
have chosen to make the definitions in Sec.  17.601 applicable to both 
programs, except where noted.
    Section 17.601(a) currently defines ``acceptable level of academic 
standing.'' We would define ``acceptable level of academic standing'' 
to mean ``the level at which a participant may continue to attend 
school under the standards and practices of the school at which a 
participant is enrolled in a course of study for which an HPSP or 
VIOMPSP scholarship was awarded.'' The revised definition would be 
consistent with the current definition and would be applicable for both 
the HPSP and the VIOMPSP.
    We propose to delete current paragraph (b), which defines ``Act,'' 
because this term is not used in the current or proposed HPSP 
regulations and would not be used in the proposed VIOMPSP regulations.
    We propose to define the term ``acceptance agreement'' as a signed 
legal document between VA and a participant of the HPSP or VIOMPSP. 
Such agreement would specify the obligations of VA and the participant, 
which must be consistent with Sec. Sec.  17.600 through 17.612 for the 
HPSP or Sec. Sec.  17.626 through 17.636 for the VIOMPSP. We would also 
state that the acceptance agreement must include a mobility agreement, 
an agreement to accept the payment of the scholarship, an agreement to 
perform the obligated service, and an agreement to maintain enrollment 
and attendance in the approved HPSP or VIOMPSP course, to include 
maintaining an acceptable level of academic standing. The terms of the 
``acceptance agreement'' are stated in 38 U.S.C. 7504 and 7604, and are 
specified throughout these proposed regulations as the requirements of 
the particular programs. This proposed definition would be consistent 
with the statutory requirements, current regulatory requirements, and 
these proposed regulations. Without a mobility agreement and an 
agreement to perform obligated service, we cannot ensure future VA 
employment. Without an agreement to accept payment of the scholarship 
and maintain appropriate academic standings, we cannot ensure 
completion of the course of education.
    We propose to delete current paragraph (d), which defines 
``advanced clinical training,'' because this term is

[[Page 75920]]

not used in the current or proposed HPSP regulations. The term is used 
only once in the VIOMPSP regulations. Therefore, we would defer to the 
common dictionary meaning of the term.
    Current Sec.  17.601(c) defines the term ``affiliation agreement'' 
to mean ``a Memorandum of Affiliation between a Department of Veterans 
Affairs health care facility and a school of medicine or osteopathy.'' 
We propose to amend this definition to eliminate the reference to 
``Memorandum of Affiliation'' and, in its place, explain what the 
agreement entails. The new definition provides that an affiliation 
agreement is ``a legal document that enables the clinical education of 
trainees at a VA or non-VA medical facility. An affiliation agreement 
is required for all education or training that involves direct patient 
contact, or contact with patient information, by trainees from a non-VA 
institution.'' We would eliminate the requirement that the school be a 
school of medicine or osteopathy because scholarships may be offered to 
applicants pursuing degrees offered in schools other than traditional 
schools of medicine or osteopathy.
    We propose to add a definition of ``credential'' to mean ``the 
licensure, registration, certification, required education, relevant 
training and experience, and current competence necessary to meet VA's 
qualification standards for employment in certain healthcare 
occupations.'' VA's qualification standards for employment in certain 
healthcare occupations are found in VA Handbook 5005. We would not 
include these employment standards in this rulemaking because such 
employment standards are not regulated by statute, and are beyond the 
scope of this rulemaking.
    Current Sec.  17.601(h) defines ``degree'' with language specific 
to the administration of the HPSP. We propose to amend this definition, 
which would be substantially similar to the current definition, would 
meet the needs of both programs, and would, therefore, be applicable to 
both HPSP and VIOMP. We would define the term ``degree'' to mean the 
successful completion of the course of study for which the HPSP or the 
VIOMPSP was awarded. We would state that VA recognizes the following 
degrees for purposes of the HPSP: ``A doctor of medicine; doctor of 
osteopathy; doctor of dentistry; doctor of optometry; doctor of 
podiatry; or an associate, baccalaureate, master's, or doctorate degree 
in another healthcare discipline needed by VA.'' We would also state 
that VA recognizes a bachelor's, master's, education specialist or 
doctorate that meets the core curriculum and supervised practice 
requirements in visual impairment and blindness for purposes of the 
VIOMPSP.
    Current Sec.  17.601(t) defines ``degree completion date'' to mean 
``the date on which a participant completes all requirements of the 
degree program.'' We propose to not include this term because it is not 
used throughout the proposed HPSP or VIOMPSP regulations.
    Current Sec.  17.601(i) defines the term ``full-time student.'' 
However, because each school defines a full-time student differently, 
we propose to simplify the definition of ``full-time student'' to now 
mean ``an individual who meets the requirements for full time 
attendance as defined by the school in which they are enrolled.''
    We propose to add a definition for ``HPSP'' to mean ``the VA Health 
Professional Scholarship Program authorized by 38 U.S.C. 7601 through 
7619.'' This proposed definition would establish a distinct acronym for 
the VA Health Professional Scholarship Program for ease of use 
throughout these regulations.
    We propose to add a definition for ``mobility agreement'' to mean 
``a signed legal document between VA and a participant of the HPSP or 
VIOMPSP, in which the participant agrees to accept assignment at a VA 
facility selected by VA where he or she will fulfill the obligated 
service requirement.'' A mobility agreement is a required component of 
all participants' acceptance agreements and may require relocation to 
another geographic location. This proposed definition would be 
consistent with 38 U.S.C. 7502 and 7603, and with the manner in which 
the term was used in previously administering the HPSP when that 
program was active.
    We propose to define ``obligated service'' to mean ``the period of 
time during which the HPSP or VIOMPSP participant must be employed by 
VA in a full-time clinical occupation for which the degree prepared the 
participant as a requirement of the acceptance agreement.'' We would 
define ``obligated service'' because it is an essential element of the 
acceptance agreement.
    Current Sec.  17.601(j) defines ``other educational expenses'' to 
mean ``a reasonable amount of funds determined by the Secretary to 
cover expenses such as books, and laboratory equipment.'' This defined 
term is only used in Sec.  17.606(a)(1)(ii), which states that a 
scholarship award will consist of ``other educational expenses, 
including books and laboratory equipment.'' Thus, the meaning of the 
term when used in the substantive regulation is clear, and a separate 
definition is unnecessary. We, therefore, propose to delete this term 
from Sec.  17.601.
    Current Sec.  17.601(r) defines ``part-time student'' to mean ``an 
individual who is a Department of Veterans Affairs employee permanently 
assigned to a Department of Veterans Affairs health care facility who 
has been accepted for enrollment or enrolled for study leading to a 
degree on a less than full-time but not less than half-time basis.'' 
This definition continues to be applicable and correct for the HPSP. 
However, participants of the VIOMPSP are not required to be VA 
employees. We propose to define ``part-time student'' using the current 
definition in Sec.  17.601 with minor stylistic changes. We would 
define part-time student for purposes of the HPSP and for purposes of 
the VIOMPSP. The only distinction between the two definitions would be 
that the HPSP part-time student would be a VA employee.
    Current Sec.  17.601(n) defines ``participant or scholarship 
program participant'' to mean ``an individual whose application to the 
Scholarship Program has been approved and whose contract has been 
accepted by the Secretary and who has yet to complete the period of 
obligated service or otherwise satisfy the obligation or financial 
liabilities of the Scholarship Contract.'' We propose to amend the 
definition to read as follows: ``[A]n individual whose application to 
the HPSP or VIOMPSP has been approved, whose acceptance agreement has 
been consummated by VA, and who has yet to complete the period of 
obligated service or otherwise satisfy the obligation or financial 
liabilities of such agreement.'' We would make this change so that the 
definition could apply to both the HPSP and the VIOMPSP. We also would 
not continue to use the term ``Scholarship Contract'' in the 
definition, because this is not a term used throughout the proposed 
HPSP or VIOMPSP regulations. We would instead use the term ``acceptance 
agreement,'' which we are proposing to define in this rulemaking.
    Current Sec.  17.601(k) defines the term ``required educational 
equipment'' to mean ``educational equipment which must be rented or 
purchased by all students pursuing a similar curriculum in the same 
school.'' We propose to delete this term because it is not used 
throughout the proposed HPSP or VIOMPSP regulations.
    Current paragraph (m) of Sec.  17.601 defines ``Scholarship Program 
or Scholarship'' to mean ``the Department

[[Page 75921]]

of Veterans Affairs Health Professional Scholarship Program authorized 
by section 216 of the Act.'' The current definition uses the section of 
the public law as the authority citation for the HPSP. We propose to 
define ``Scholarship Program'' as ``the VA Health Professional 
Scholarship Program (HPSP) authorized by 38 U.S.C. 7601 through 7619.'' 
This change is made to cite the corresponding statutes that authorize 
the HPSP. Citing the statutes instead of the public law is a more 
accurate way of stating the authority for the HPSP. We are retaining 
this definition because it still applies to existing HPSP regulations 
that are not amended by this rulemaking. However, we would not use the 
term ``Scholarship Program'' in the new VIOMPSP regulations.
    Current paragraph (o) of Sec.  17.601 defines the term ``school.'' 
We propose to amend the current definition to apply to the HPSP and the 
VIOMPSP. We would state that ``school means an academic institution 
that is accredited by a body or bodies recognized for accreditation by 
the U.S. Department of Education or by the Council for Higher Education 
Accreditation (CHEA).'' We would state that for purposes of the HPSP a 
school would ``offer[ ] a course of study leading to a degree in a 
healthcare service discipline needed by VA.'' We would also state that 
for purposes of the VIOMPSP a school would ``offer[ ] a course of study 
leading to a degree in visual impairment or orientation and mobility.'' 
We would move the authority citation after paragraph (o) to the end of 
this section to accord with current VA conventions for citing 
authorities.
    Current Sec.  17.601(p) defines ``school year'' to mean ``for 
purposes of the stipend payment, all or part of the 12-month period 
from September 1 through August 31 during which a participant is 
enrolled in the school as a full-time student.'' We propose to not 
include the time period ``from September 1 through August 31.'' The 
commencement of a school year varies from institution to institution 
and limiting a school year from September 1 through August 31 may 
disqualify otherwise eligible participants whose school year commences 
on other dates. We would, therefore, define the term ``school year'' to 
mean ``for purposes of the HPSP and its stipend payment, and the 
VIOMPSP, all or part of the 12-month period that starts on the date the 
participant begins school as a full-time student.''
    We propose to add a definition for ``VA.'' We would define VA as 
``the Department of Veterans Affairs.'' The current regulations were 
written a long time ago, and they often refer to the ``Secretary.'' 
However, the modern trend in our regulations is to refer to ``VA'' and 
not the ``Secretary.'' We would use the term ``VA'' instead of the term 
``Secretary'' throughout this rulemaking for ease of use and 
readability, consistent with 38 U.S.C. 301. We acknowledge that 
regulations not affected by this rulemaking still contain the term 
``Secretary.''
    Current paragraph (s) of Sec.  17.601 defines a ``Department of 
Veterans Affairs employee'' as ``an individual employed and permanently 
assigned to a VA health care facility.'' In order to include potential 
applicants who are VA employees, but who are not employed in a VA 
medical center, we propose to eliminate the reference to VA healthcare 
facilities. We also propose to refine our definition of VA employee to 
now mean ``an individual permanently employed by VA.'' A ``permanently 
employed'' individual does not include an individual who is employed 
temporarily or on a contractual basis.
    Current paragraph (u) of Sec.  17.601 defines ``VA health care 
facility'' to mean ``Department of Veterans Affairs medical centers, 
medical and regional office centers, domiciliaries, independent 
outpatient clinics, and outpatient clinics in regional offices.'' We 
propose to amend this definition to remove outdated references to VA 
clinics, such as outpatient clinics in regional offices that no longer 
exist. The updated definition would incorporate current VA medical 
facilities, and would define VA healthcare facility to mean ``a VA 
medical center, independent outpatient clinic, domiciliary, nursing 
home (community living center), residential treatment program and any 
of a variety of community based clinics (including community based 
outpatient clinics, outreach clinics, rural health resource centers, 
primary care telehealth clinics, and Vet Centers), consolidated mail 
outpatient pharmacies, and research centers.''
    We propose to add a definition for ``VIOMPSP'' to mean ``the Visual 
Impairment and Orientation and Mobility Professional Scholarship 
Program authorized by 38 U.S.C. 7501 through 7505.'' This proposed 
definition would establish a distinct acronym for the Visual Impairment 
and Orientation and Mobility Professional Scholarship Program that 
would allow for ease of use throughout these regulations.
    The current authority for this section is 38 U.S.C. 7633. We 
propose to amend this authority citation to include the authority for 
the newly added definitions. The authority citation would be 38 U.S.C. 
301, 7501(a)(1), 7504, 7602(a), 7604(1)(B), and 7633.
    There is a collection number at the end of current Sec.  17.601. 
Proposed Sec.  17.601 would list the definitions that apply to the HPSP 
and the VIOMPSP. A collection number is not required at the end of a 
definitions section. We, therefore, propose to delete such collection 
number and relocate it where it is appropriate, namely following 
Sec. Sec.  17.604, 17.612, 17.629, and 17.636.

17.602 Eligibility for the HPSP

    We propose to amend Sec.  17.602 by changing the title of the 
section from ``[e]ligibility'' to ``[e]ligibility for the HPSP.'' 
Current paragraph (a)(1) states that a participant must ``[b]e accepted 
for enrollment or be enrolled as a full-time student in an accredited 
school located in a State''. We would state that the participant must 
be ``unconditionally accepted for enrollment'' to specify that the 
participant's enrollment is not contingent upon meeting a condition or 
requirement that may or may not be met by the participant at the start 
of the school year. This condition or requirement may prevent a 
participant from enrolling in a school, and as such cause the 
participant to be in breach of the acceptance agreement.
    We would also add a new paragraph (a)(6). Proposed paragraph (a)(6) 
would require participants in the HPSP to perform clinical tours while 
they are enrolled in the course of education or training as part of 
their acceptance agreement. Under 38 U.S.C. 7618(b), VA must ``require 
participants in [the HPSP] to perform clinical tours in assignments or 
locations determined by the Secretary while the participants are 
enrolled in the course of education or training for which the 
scholarship is provided.'' We note that the statute authorizes VA to 
determine ``assignments and locations'' of the clinical tour. In 
practice, VA attempts to make such determinations while participants 
are still pursuing their degrees, to facilitate their transition to VA 
employment, and VA attempts to assign participants in facilities 
located as close as possible to the participant's educational 
institution, unless the participant requests a different location and 
VA is able to accommodate that request.

17.603 Availability of HPSP Scholarships

    We propose to amend Sec.  17.603 by changing the title of the 
section from ``[a]vailability of scholarships'' to ``[a]vailability of 
HPSP scholarships.'' We would also add a new paragraph (b) and the 
current paragraph, reworded for

[[Page 75922]]

clarity, would be redesignated as paragraph (a).
    Proposed paragraph (b) would authorize VA to grant a scholarship in 
a discipline or program for participation in HPSP if VA determines that 
such discipline or program ``is necessary for the improvement of 
healthcare of veterans.'' The authority citation for this change would 
be 38 U.S.C. 7612(b)(2), which authorizes HPSP scholarship awards in a 
field of education or training leading to employment as an appointee 
under 38 U.S.C. 7401(1) and (3). In turn, section 7401(1) and (3) 
contains a long list of disciplines, as well as authority to add 
additional classes that meet certain strict statutory criteria and in 
accordance with the procedural restrictions specified by statute. 
Rather than restate that list in the proposed rule, we would simply 
refer to section 7401(1) and (3) in the regulation text.

17.604 Application for the HPSP

    We propose to amend the title of Sec.  17.604 from ``[a]pplication 
for the scholarship program'' to ``[a]pplication for the HPSP.'' We 
also propose to amend Sec.  17.604 for clarity.
    The current regulation states that an applicant for an HPSP 
scholarship ``must submit an accurate and complete application'' that 
includes ``a signed written contract to accept payment of a scholarship 
and to serve a period of obligated service.'' It does not state that a 
mobility agreement is required. A mobility agreement is part of the 
acceptance agreement in which the participant agrees to accept 
assignment wherever VA will assign him or her to fulfill the obligated 
service with VA. We would state that ``[a]n applicant for the HPSP must 
submit an accurate and complete application including a signed written 
acceptance agreement.'' This statement would be consistent with prior 
practice and 38 U.S.C. 7603. The period of obligated service is further 
explained in Sec.  17.607.

17.605 Selection of HPSP participants

    We propose to amend Sec.  17.605 by changing the title of the 
section from ``[s]election of participants'' to ``[s]election of HPSP 
participants.'' On August 18, 1983, VA amended Sec.  17.605 by adding a 
new paragraph (d) and redesignating the existing paragraph (d) as 
paragraph (e). 48 FR 37,398. However, paragraph (a) referenced the 
original paragraph (d) and such reference was not amended to correctly 
reflect the redesignated paragraph (e). However, we redesignated 
paragraph (e) in this rulemaking, as explained below, to proposed 
paragraph (f). We propose to correct paragraph (a) by amending the 
references to ``paragraph (d) of this section'' to correctly refer to 
``paragraph (f) of this section.''
    We would also amend paragraph (a) to state that if there are more 
applicants to the HPSP than there are available funds, VA will select 
the participants based on a random method of selection, considering 
veterans first among all equally qualified candidates. This method of 
selection supports VA's hiring mission to attract, recruit and hire 
veterans into the VA workforce while also being consistent with the 
training and hiring goals of the HPSP. We would make other minor 
stylistic changes for ease of readability.
    We propose to add a new paragraph (d) that would require VA to 
notify in writing those individuals whose applications are approved, 
and would state that an individual becomes a participant of the HPSP 
upon receipt of VA's written approval. Although current Sec.  17.605 
does not contain a similar provision, in practice VA has always 
provided such notification to HPSP applicants and has considered 
applicants to be participants upon their receipt of such notice. We 
believe that including this requirement in regulation will make it 
easier to understand the application and approval process. We would 
also redesignate current paragraphs (d) and (e) as proposed paragraphs 
(e) and (f), respectively.

17.607 Obligated service

    Current Sec.  17.607(b)(1) governs the beginning date of a 
participant's obligated service. The second sentence of current 
paragraph (b)(1) states that ``[t]he Secretary shall appoint the 
participant to such position within 60 days after the participant's 
degree completion date, or the date the participant becomes licensed in 
a State to practice in the discipline for which the degree program 
prepared the participant, whichever is later.'' We propose to amend 
this provision to incorporate the language of 38 U.S.C. 7618(a), as 
amended by the 2010 Act. Section 7618(a) states that the HPSP shall be 
modified to require that program graduates be fully employed ``as soon 
as possible, if not immediately, upon graduation and completion of 
necessary certifications,'' and that VA shall ``actively assist and 
monitor graduates to ensure certifications are obtained in a minimal 
amount of time following graduation.'' The addition of this language is 
essential in maintaining VA's part of the acceptance agreement by 
employing HPSP participants in a timely manner. Although VA will be 
actively working to ensure positions are available for these 
participants, we believe the current allowance of 60 days does not 
allow a sufficient window for VA or for the participants. We propose to 
extend the time limit from 60 to 90 days. We will strive to make the 
appointment as soon as possible within those 90 days. In order to 
incorporate the proposed extension of the time limit, and to ensure 
that VA complies with the acceptance agreement, we would state in 
proposed paragraph (b)(1) that ``VA will appoint the participant to 
such position as soon as possible, but no later than 90 days after the 
date that the participant receives his or her degree, or the date the 
participant becomes licensed in a State or becomes certified, whichever 
is later.'' VA will actively assist and monitor graduates to ensure 
credentials are obtained in a minimal amount of time following 
graduation. We would also state: ``If a participant fails to obtain his 
or her degree, or fails to become licensed in a State or become 
certified no later than 180 days after receiving the degree, the 
participant is considered to be in breach of the acceptance 
agreement.'' This statement would alert participants of the 
consequences of not upholding the acceptance agreement. We would also 
reformat current Sec.  17.607(b)(1) into three paragraphs for ease of 
readability and amend the current language for clarity.
    We propose to amend the authority citation after paragraph (b) of 
Sec.  17.607 to include 38 U.S.C. 7618(a), which was amended by the 
2010 Act.
    As required by 38 U.S.C. 7618(c), we would state in paragraph 
(b)(1)(iii) that ``VA will ensure that the participant is assigned a 
mentor who is employed at the same facility where the participant 
performs his or her obligated service at the commencement of such 
service.'' The appointment of a mentor will allow the participant an 
easier transition into the VA healthcare system.
    We propose to amend and reorganize current paragraph (c) for ease 
of readability. We would organize the current rules addressing the 
service obligation of full-time students in a new paragraph (c)(1), 
which would also include the new requirement of 38 U.S.C. 7612(c)(1)(B) 
that HPSP participants must agree to serve as full-time clinical VA 
employees ``for no less than 2 years.'' The current regulation, in 
accordance with 38 U.S.C. 7612(c)(1)(B) (1991) prior to the 2010 Act, 
requires a minimum of only 1 year of obligated service.
    We would address the service obligation of part-time students in 
proposed paragraph (c)(2). We would make no revisions to the 
substantive

[[Page 75923]]

content of current paragraph (c) governing part-time students. We would 
add, however, that the obligated service for a part-time student must 
be satisfied by full-time clinical employment with VA. We would add 
this statement to alert potential participants that they may not 
fulfill the service obligation on a part-time basis.
    We propose to amend the authority citation after paragraph (c) of 
Sec.  17.607 to include 38 U.S.C. 7618(c), which was amended by the 
2010 Act.
    Current Sec.  17.607(d) states that the participant ``must be 
willing to move to another geographic location for service 
obligation.'' We would amend paragraph (d) to state that the 
participant's willingness to move is in accordance with his or her 
mobility agreement. As explained previously, the mobility agreement is 
part of the acceptance agreement between the participant and VA. By 
adding this statement we would make clear that the participant will 
have agreed to such movement as part of the application process for the 
program.
    Current Sec.  17.607(d) states in part that ``[a] participant who 
received a scholarship as a part-time student may be allowed to serve 
the period of obligated service at the health care facility where the 
individual was assigned when the scholarship was authorized.'' Because 
the participant may receive a degree that is not associated with the VA 
position in which he or she was employed at the commencement of the 
HPSP, VA may not be able to guarantee the obligated service in that 
same healthcare facility. We would, therefore, now state that the 
participant may ``serve the period of obligated service at the 
healthcare facility where the individual was assigned when the 
scholarship was authorized, if there is a vacant position which will 
satisfy the individual's mobility agreement at that facility.''

17.611 Bankruptcy

    Current Sec.  17.611 states that ``[a]ny payment obligation 
incurred may not be discharged in bankruptcy under title 11 U.S.C. 
until 5 years after the date on which the payment obligation is due.'' 
This regulatory language is derived from 38 U.S.C. 7634(c), which 
states: ``An obligation of a participant under the Educational 
Assistance Program (or an agreement thereunder) for payment of damages 
may not be released by a discharge in bankruptcy under title 11 before 
the expiration of the five-year period beginning on the first date the 
payment of such damages is due.'' Section 7634(c) applies to the HPSP 
program because that program is part of the Educational Assistance 
Program under chapter 76 of title 38, United States Code. We propose to 
add an additional sentence to clarify that the rule applies to both 
HPSP and VIOMPSP, pursuant to 38 U.S.C. 7505(d), which is substantively 
identical to 38 U.S.C. 7634(c).
    Because Sec.  17.611 would now apply to both the HPSP and VIOMPSP, 
we would add 38 U.S.C. 7505(d) to the authority citation in Sec.  
17.611.

17.612 Cancellation, waiver, or suspension of obligation

    Current Sec.  17.612 concerns cancellation, waiver, or suspension 
of obligations under the HPSP.
    Our authority for current Sec.  17.612(a) is 38 U.S.C. 7634(a), 
which states that a participant's obligations under HPSP are cancelled 
upon the participant's death. Our authority for the rest of current 
Sec.  17.612, paragraphs (b) through (d), is 38 U.S.C. 7634(b), which 
allows VA to ``prescribe regulations providing for the waiver or 
suspension of any obligation of a participant for service or payment 
under [HPSP] (or an agreement under [HPSP]) whenever noncompliance by 
the participant is due to circumstances beyond the control of the 
participant or whenever [VA] determines that the waiver or suspension 
of compliance is in the best interest of the United States.''
    Proposed Sec.  17.612(a)(1) would make this section applicable to 
both HPSP and VIOMPSP. The current rules and the changes proposed by 
this rulemaking notice are fully consistent with our authority under 
chapter 75. Section 7505(c) requires VA to prescribe regulations 
``providing for the waiver or suspension of any obligation of an 
individual for service or payment * * * whenever (1) noncompliance by 
the individual is due to circumstances beyond the control of the 
individual; or (2) the Secretary determines that the waiver or 
suspension of compliance is in the best interest of the United 
States.''
    Proposed paragraph (a)(2) restates current paragraph (a), without 
change.
    Under the current rule, we authorize a one-year waiver or 
suspension of service or payment obligations that may be ``renew[ed]'' 
based on an application ``setting forth the basis, circumstances, and 
causes which support the requested action.'' 38 CFR 17.612(b)(1). 
Waivers or suspensions may be granted whenever compliance is impossible 
or whenever granting the application would be in the best interests of 
VA. 38 CFR 17.612(b)(2). Under current paragraphs (c) and (d), we 
discuss the basis for a finding of such impossibility. We do not 
propose to revise these paragraphs, and believe that it is consistent 
with the authorizing statutes to make these bases applicable to both 
the HPSP and VIOMPSP.
    We propose to amend current paragraph (b)(1) to add two new 
requirements for the granting of a waiver or suspension. The first 
requirement would be that a participant must submit a written request 
for a waiver or suspension of his or her service or payment obligation 
no later than 1 year after the date the participant is notified he or 
she is in breach of his or her contract. The second requirement would 
obligate a participant to comply with a request by VA for additional 
information no later than 30 days after the request was made. The 
addition of these two requirements would eliminate ambiguity regarding 
dates of submission of waiver or suspension requests, and further 
submission of additional evidence. This change is consistent with our 
authority under 38 U.S.C. 7634 to prescribe regulations on this issue.
    We propose to define the terms ``waiver'' and ``suspension'' for 
consistency of use. We would state that ``[a] waiver is a permanent 
release by VA of the obligation either to repay any scholarship funds 
that have already been paid to or on behalf of the participant, or to 
fulfill any other acceptance agreement requirement. If a waiver is 
granted, then the waived amount of scholarship funds may be considered 
taxable income.'' Federal tax regulations, at 26 CFR 1.61-12(a), state: 
``The discharge of indebtedness, in whole or in part, may result in the 
realization of income.'' IRS Publication 525 (2010), further states 
that ``if a debt you owe is canceled or forgiven, other than as a gift 
or bequest, you must include the canceled amount in your income.'' We 
would state that the waived amount of scholarship funds may be taxable 
income to alert the participant of this potential tax liability.
    In regard to suspensions, we would state that VA may approve an 
initial request for suspension for a period of up to one year. However, 
while waivers are permanent releases from obligations, suspensions are 
only temporary and will be granted initially for one year. Participants 
may request extension of a suspension for one additional year. The 
participant will be in breach of his or her acceptance agreement once 
the suspension period has ended. We would also state that if VA 
approves a suspension, ``VA will temporarily discontinue providing any 
scholarship funds to or on behalf of the participant while the 
participant's scholarship is in a suspended status'' or ``temporarily 
delay the enforcement of acceptance agreement requirements.''

[[Page 75924]]

    We propose to add a new paragraph (e) to Sec.  17.612 that would 
state that ``[a]ny previous participant of any federally sponsored 
scholarship program who breached his or her acceptance agreement or 
similar agreement in such scholarship program is not eligible to apply 
for another scholarship. This includes participants who previously 
applied for, and received, a waiver under this section.'' If a 
participant has breached the acceptance agreement under any other 
federally sponsored scholarship program such participant would be at a 
greater risk of breaching another acceptance agreement. VA has limited 
funds to award scholarships and VA would benefit if such funds were 
expended on participants who have not breached an acceptance agreement. 
Section 7634 of 38 U.S.C. allows VA to prescribe regulations for the 
``waiver or suspension of any obligation of a participant for service 
or payment under the Educational Assistance Program.'' In view of the 
similarities between the HPSP and VIOMPSP, we also propose to allow 
waivers and suspensions for the VIOMPSP, even though that program is 
authorized by chapter 75. We believe that our authority to regulate 
waivers and suspensions under 38 U.S.C. 7505(c) and 7634 includes the 
authority to regulate the effect that granting a waiver or suspension 
should have on the participant's eligibility for future scholarships. 
We propose to bar a participant who previously breached an HPSP or 
VIOMPSP acceptance agreement, including those who were granted a waiver 
after they had breached the agreement. A participant who is granted a 
suspension of benefits would not be considered to be in breach of his 
or her acceptance agreement because such participant is expected to 
resume his or her course of study or obligated service after the period 
of suspension has concluded. Due to the limited availability of these 
scholarship funds, we believe it is inappropriate to award scholarships 
to individuals who are at risk for noncompliance, and believe that it 
is rational to assume that an individual who previously breached a 
contract has a higher risk of doing so again over one who has not 
previously breached a contract. It is also more equitable to distribute 
funds to persons who have not previously been offered the opportunity 
to participate in one of these programs, rather than to persons who 
have been given the opportunity but who failed to complete their 
obligations.
    We propose to add a new paragraph (f). Paragraph (f) would state 
that ``[d]ecisions to approve or disapprove waiver requests are final 
and binding determinations'' and not subject to reconsideration or 
appeal. This paragraph is based on current practice and would clarify 
the finality of decisions made under 38 U.S.C. 7505(c) and 7634(b), 
which allow VA to prescribe regulations that provide for the waiver or 
suspension of any obligation of an individual for service or payment.
    Finally, as a technical matter, we will revise Sec.  17.612 so that 
the authority citations for the section appear at the end of the 
section.

Proposed Visual Impairment and Orientation Mobility Professional 
Scholarship Program Regulations

17.625 Purpose

    Proposed Sec.  17.625 would parallel Sec.  17.600, however, it 
would be specifically applicable to the VIOMPSP. Proposed section 
17.600 would recognize that both VA and non-VA employees may be 
eligible for the HPSP. However, proposed Sec.  17.625 would state that 
the VIOMPSP would be used primarily as a recruitment tool, and ``will 
be publicized throughout educational institutions in the United States, 
with an emphasis on disseminating information to such institutions with 
high numbers of Hispanic students and to historically black colleges 
and universities.'' The prospective participants in the VIOMPSP are not 
the same as the prospective participants in the HPSP. We would make 
this distinction clear in proposed Sec.  17.625. These requirements 
would be consistent with 38 U.S.C. 7501.

17.626 Definitions

    As stated in the preamble for proposed Sec.  17.601, in order to 
eliminate redundancies in the HPSP and the VIOMPSP, the definitions in 
Sec.  17.601 would apply to both of these programs. In order to alert 
the reader that the defined terms for the VIOMPSP are contained in 
Sec.  17.601, we propose to state in Sec.  17.626 that ``[f]or the 
definitions that apply to Sec. Sec.  17.625 through 17.636, see Sec.  
17.601.''

17.627 Eligibility for the VIOMPSP

    Although proposed Sec.  17.627 would parallel the structure of 
current Sec.  17.602, there would be several substantive eligibility 
distinctions between HPSP and the VIOMPSP.
    Paragraph (a) would set forth the basic eligibility requirements 
for VIOMPSP. Pursuant to 38 U.S.C. 7501(a), VIOMPSP would be available 
to U.S. citizens who are ``accepted for enrollment or currently 
enrolled in a program of study leading to a degree in orientation and 
mobility, low vision therapy, or vision rehabilitation therapy, or a 
dual degree'' and who submit a VIOMPSP signed agreement. We would also 
include the requirement to submit an application in order to be 
considered for the VIOMPSP, as set forth in 38 U.S.C. 7502. We would 
state that the participant must be ``unconditionally accepted for 
enrollment'' to specify that the participant's enrollment is not 
contingent upon meeting a condition or requirement that may or may not 
be met by the participant at the start of the school year. This 
condition or requirement may prevent a participant from enrolling in a 
school, and as such cause the participant to be in breach of the 
acceptance agreement. A ``dual degree'' refers to a course of study 
that enables an individual to become dually certified in two of the 
three professional certifications offered by the Academy for 
Certification of Visual Rehabilitation and Education Professionals 
(ACVREP). ACVREP offers certification in orientation and mobility, low 
vision therapy, and vision rehabilitation therapy (formerly known as 
blind rehabilitation teaching). A dual degree would include the core 
curriculum and supervised practice in two of these three certification 
areas during the participant's course of study. The requirement of 
citizenship is consistent with the overall structure and purpose of 
chapter 75. Under section 7501(b), the stated purpose of the program 
is, in part, to increase the supply of qualified blind rehabilitation 
specialists for the United States, and under section 7501(c), VA is 
required to publicize the program throughout the U.S. After completion 
of their education, participants must serve as full-time clinical VA 
employees for a minimum of three years. These requirements could be 
harder to meet in the case of non-U.S. citizens whose ability to remain 
in this country is contingent on factors beyond VA control.
    Unlike HPSP scholarship recipients who, under current Sec.  
17.602(b), may receive HPSP benefits as part-time students provided 
that they are current, full-time VA employees at the time that the 
scholarship is awarded and for the duration of the scholarship, VIOMPSP 
scholarship recipients are not required to maintain VA employment, so 
we would not include a parallel provision requiring part-time students 
to be and remain employed by VA in the eligibility regulation for 
VIOMPSP.
    Proposed paragraph (b) would parallel current Sec.  17.602(c), 
which would not be

[[Page 75925]]

revised by this rulemaking. Current Sec.  17.602(c) bars HPSP 
eligibility for any applicant ``who, at the time of application, owes a 
service obligation to any other entity to perform service after 
completion of the course of study.'' This bar is consistent with 38 
U.S.C. 7602(b), which states that an individual is ineligible for the 
HPSP or VIOMPSP ``if the individual is obligated under any other 
Federal program to perform service after completion of the course of 
education or training of such individual.'' The current rule, 
applicable to HPSP, bars eligibility for any individual who owes a 
service obligation--irrespective of whether that obligation is the 
result of a Federal program, because such an obligation would 
complicate (or render impossible) the individual's obligation to 
provide service to VA.

17.628 Availability of VIOMPSP scholarships

    Proposed Sec.  17.628 would parallel proposed Sec.  17.603(a), 
clarifying that ``VA will make awards under the VIOMPSP only when VA 
determines it is necessary to assist in alleviating shortages or 
anticipated shortages of personnel in visual impairment or orientation 
and mobility programs.'' Also consistent with Sec.  17.603(a), we would 
state that VA's determination as to the number of VIOMPSP scholarships 
that will be awarded in a given fiscal year, as well as the number of 
full- and/or part-time students who will receive such awards, is 
subject to the availability of appropriations. This would be consistent 
with 38 U.S.C. 7501(a)(1) and with the way that VA had previously 
administered, and proposes to continue to administer, the HPSP program.

17.629 Application for the VIOMPSP

    Proposed Sec.  17.629 would state the application procedure for the 
VIOMPSP. Proposed paragraph (a) would state the procedure for applying 
for the VIOMPSP. Under proposed paragraph (a), the potential 
participant ``must submit an accurate and complete application,'' and 
the application would include a signed acceptance agreement. This 
proposed paragraph would be in accordance with 38 U.S.C. 7502(a), and 
would be consistent with the administration of the HPSP.
    Proposed paragraph (b) would state VA's duty to inform a potential 
participant prior to acceptance in the VIOMPSP of his or her rights and 
liabilities if accepted into the program. We would also provide to 
anyone applying to the program the terms and conditions of 
participation in the VIOMPSP and service in VA. These VA duties are 
substantively identical to 38 U.S.C. 7502(a)(2).

17.630 Selection of VIOMPSP participants

    Proposed Sec.  17.630 would parallel current Sec.  17.605, as 
revised by this rulemaking. However, several paragraphs in Sec.  17.605 
do not apply to the VIOMPSP. We would not include the selection 
criteria for part-time students from Sec.  17.605(c) that pertain to VA 
employment at the time of application because, as stated above in the 
discussion of Sec.  17.627, part-time students in the VIOMPSP are not 
required to be full-time VA employees. We would also not include a 
paragraph to parallel current Sec.  17.605(e) because VIOMPSP will not 
offer continuation awards.
    Our authority for the selection criteria in proposed Sec.  17.630 
would be 38 U.S.C. 7504(3). The criteria, as noted, mirror the current 
criteria for HPSP, which, while that program was active, were easy for 
participants to understand and for VA to apply. The fact that Congress 
decided to renew the HPSP, and established a substantively similar 
program, the VIOMPSP, supports continuing to interpret these statutory 
authorities and to continue to apply the existing regulatory criteria 
in the same manner as we have done in the past.
    Proposed paragraph (a) would state the general provisions for 
selecting a participant for the VIOMPSP. VA will give priority 
consideration to applicants entering their final year of education or 
training, in order to achieve our goal of recruiting new healthcare 
practitioners on an expedited basis through the VIOMPSP. We would state 
that if there are more applicants to the VIOMPSP than there are 
available funds, VA will select the participants based on a random 
method of selection, considering veterans first among all equally 
qualified candidates. This is consistent with the procedures for the 
HPSP outlined in Sec.  17.605(a), as amended by this rulemaking. This 
method of selection supports VA's hiring mission to attract, recruit 
and hire veterans into the VA workforce.
    We would state the selection criteria for participants in the 
VIOMPSP in proposed paragraph (b). These criteria would include 
academic performance, work experience, faculty and employer 
recommendations, or career goals. These criteria are identical to the 
criteria used to select HPSP participants, and VA has found through the 
administration of that program that they accurately identify qualified 
individuals and that they indicate a likelihood of successful 
completion of a course of study.
    Proposed paragraph (c) would require VA to notify in writing those 
individuals whose applications are approved, and would state that an 
individual becomes a participant of the VIOMPSP upon receipt of VA's 
written approval. As previously stated in this rulemaking, current 
Sec.  17.605 does not contain a similar provision. In practice, 
however, VA has always provided such notification to HPSP applicants 
and has considered applicants to be participants upon their receipt of 
such notice. We believe that including this requirement in regulation 
will make it easier to understand the application and approval process.
    Proposed paragraph (d) would indicate the period of time for which 
VA may award a scholarship under the VIOMPSP for full-time and part-
time participants. We would state that VIOMPSP scholarships are awarded 
for the number of years that are required to complete program of study 
leading to a degree in orientation and mobility, low vision therapy, or 
vision rehabilitation therapy, or a dual degree. We would also state 
that the number of years covered by an individual scholarship will be 
equal to the number of years that the participant has yet to complete 
to obtain a degree. Awards of scholarships under the VIOMPSP are 
subject to the availability of funds, and VA may award a full-time 
student a scholarship for a minimum of 1 year to a maximum of 4 years. 
VA may also award a part-time student a scholarship for a minimum of 1 
year to a maximum of 6 years.

17.631 Award procedures

    Proposed paragraph (a) of Sec.  17.631 would state the maximum 
amount that a participant may receive while enrolled in the VIOMPSP. 
The amount a participant may receive per year may not exceed the total 
cost of tuition and fees for the academic year for the degree program 
in which the participant is enrolled, up to a maximum annual amount for 
a full-time student of $15,000.00. We would state that payments to 
scholarship participants are exempt from Federal taxation. We would add 
this clarifying language in order to eliminate any doubt that the 
participant may have regarding any possible Federal tax liability upon 
receipt of the scholarship award. We would also state that the total 
amount of assistance per year provided to a participant who is a part-
time student shall bear the same ratio to the amount that would be paid 
if the participant were a full-time student as the coursework carried 
by the participant to

[[Page 75926]]

full-time coursework. The total amount of assistance a participant may 
receive under the VIOMPSP is $45,000.00. We would clarify that if an 
individual is enrolled in a program of study leading to a dual degree, 
the tuition and fees would not exceed the amounts necessary for the 
minimum number of credit hours to achieve such dual degree. We would 
add this clarification to alert the participants that VA would not 
issue payments for additional non-requisite courses that the 
participant may have enrolled in to complement the dual degree. VA 
would only provide assistance to the extent that VA's financial 
assistance, coupled with that obtained through other sources, does not 
exceed the tuition and fees for the degree for which the VIOMPSP was 
granted. We would also state that VA will directly issue payments on 
behalf of the participant to the school in which the participant is 
enrolled for the amount of tuition and fees. This proposed paragraph 
would apply 38 U.S.C. 7503, without substantive change.
    Proposed paragraph (b) would state that if a participant of the 
VIOMPSP repeats a course, VA would not pay for the additional costs 
relating to the repeated course work. We believe that it is important 
to restrict payments in this manner to ensure that our limited VIOMPSP 
funds are spent only on the best and brightest students enrolled in the 
program. We would also state that if scholarship payments were 
suspended under this section, VA will resume such payments upon 
notification from the school that the participant has returned from the 
leave-of-absence or has satisfactorily completed the repeated course 
work and is pursuing the course of study for which the VIOMPSP was 
awarded. We would require the notification from the school in order to 
avoid erroneous scholarship payment in the event that a participant did 
not pass the repeated course or did not return from the leave-of-
absence on the anticipated date.
    We are authorized under 38 U.S.C. 7504(3) to add to the acceptance 
agreement ``any other terms and conditions that [VA] considers 
appropriate for carrying out'' the VIOMPSP. A similar provision is set 
forth in 38 U.S.C. 7604(5), for purposes of the HPSP, which we 
implemented in 38 CFR 17.606(b). We recognize that Sec.  17.606(b) is 
not explicitly addressed by statute and the regulatory language is not 
in the acceptance agreement itself. However, the proposed definition of 
acceptance agreement would require consistency with regulations, and we 
believe that it is important to note this restriction in regulation, as 
we did for the HPSP, in order to provide adequate notice of the 
restriction.

17.632 Obligated service

    We would state the requirements for the participant's obligated 
service to VA for the VIOMPSP in proposed Sec.  17.632. Proposed 
paragraph (a) would state that, except as provided in paragraph (d) of 
this section, a participant would serve as a full-time clinical VA 
employee in the rehabilitation practice of the participant's discipline 
in an assignment or location determined by VA while participating in 
the VIOMPSP.
    Proposed paragraph (b) would state when the participant's obligated 
service would begin. Such service would begin ``on the date on which 
the participant obtains any required applicable credentials and when 
appointed as a full-time clinical VA employee in a position for which 
the degree prepared the participant.'' Proposed paragraph (b) would be 
in accordance with 38 U.S.C. 7504(3). We would state that VA will 
appoint the participant in a full-time clinical position as soon as 
possible, but no later than 90 days after the date the participant 
receives his or her degree, or the date the participant obtains the 
required credentials, whichever date is later. Even though VA would 
like to employ the participant as soon as possible, we must allow time 
for the participant to obtain the required credentials. Such 
credentials do not have to be obtained immediately after the completion 
of the course. However, VA may not employ the participant in a clinical 
position without such credentials. The 90 days would allow the 
participant sufficient time to obtain the necessary credentials. We 
would also state that ``[i]f a participant fails to obtain his or her 
degree, or fails to obtain any required applicable credentials within 
180 days after receiving the degree, the participant is considered to 
be in breach of the acceptance agreement.'' As previously stated in 
this rulemaking under proposed paragraph Sec.  17.607(b), we would add 
this statement to alert participants of the consequences of not 
upholding the acceptance agreement.
    Proposed paragraph (c) would state that the duration of the 
obligated service would be for 3 calendar years. Such obligated service 
must be completed no later than 6 years after completion of the 
educational program for which the scholarship was awarded and a degree 
was received. These provisions are stated in 38 U.S.C. 7504(2)(D).
    Proposed paragraph (d) would state that, as part of the 
participant's mobility agreement, he or she must be willing to accept 
assignment where VA assigns the obligated service. The mobility 
agreement is not specifically required by 38 U.S.C. 7504; however, it 
is part of the other terms and conditions that VA deems appropriate to 
carry out this program under paragraph (3) of section 7504.
    Proposed paragraph (e) would state that ``[n]o period of advanced 
clinical training will be credited towards satisfying the period of 
obligated service incurred under the VIOMPSP.'' Such clinical training 
may be required for completion of the required degree in blind 
rehabilitation or mobility, and, if so, must be completed before the 
participant begins the obligated service. This proposed paragraph also 
falls under the purview of 38 U.S.C. 7504(3).

17.633 Deferment of Obligated Service

    The regulations that govern deferment of obligated service for the 
VIOMPSP are the same as those found in current Sec.  17.608, which 
apply to the HPSP. Deferments of obligated service may be requested by 
participants in certain degree programs to allow them to complete an 
approved program of advanced clinical training. In an effort to 
simplify the HPSP and VIOMPSP regulations, we propose to provide a 
cross-reference to Sec.  17.608 for the rules that govern deferment of 
obligated service, in proposed Sec.  17.633.

17.634 Failure To Comply With Terms and Conditions of Participation

    Proposed Sec.  17.634 would parallel current Sec.  17.610, which 
would not be revised by this rulemaking.
    Under 38 U.S.C. 7505(a) and (b), VA is required to establish in 
regulation an amount that must be repaid by individuals who fail to 
satisfy the terms of their acceptance agreements, and that amount must 
be ``equal to the unearned portion'' of their scholarship. For purposes 
of the HPSP, such liability is established in 38 U.S.C. 7617 and 
codified in regulation at 38 CFR 17.610. As explained throughout this 
notice, we believe that Congress expected VA to administer the VIOMPSP 
in a similar manner as the HPSP, given the similarity between the 
applicable statutes and the intent behind their enactment. We recognize 
that, for purposes of a breach of a VIOMPSP agreement, Congress did not 
require us to use the same formulas established in 38 U.S.C. 7617 for 
the HPSP; however, Congress did allow us to do so by authorizing VA to 
establish regulations. Consequently, we believe that it is appropriate 
to establish a regulation for the VIOMPSP that parallels current Sec.  
17.610.

[[Page 75927]]

    Proposed paragraph (a) would parallel current Sec.  17.610(a). This 
proposed paragraph would state that if the participant fails to accept 
payment, or instructs the school to not accept payment, under the 
VIOMPSP award, he or she must pay the United States $1,500 in 
liquidated damages. This dollar amount would be in addition to any 
service or other obligation incurred under the agreement. We note that 
this liquidated damages provision applies only if the participant 
refuses to accept payment of the scholarship, or causes a school not to 
accept such payment. In these cases, we have not already invested in 
the applicant and therefore our costs have not been significant. 
Moreover, the damages (monetary and nonmonetary, such as causing VA to 
deny another person's application based on approval of the individual's 
application) caused by such refusal are similar between both programs. 
Therefore, it is appropriate to adopt for the VIOMPSP the same $1,500 
liquidated damages amount required for the HPSP. We also recognize that 
the statute applicable to the VIOMPSP may not specifically contemplate 
liquidated damages, but we believe that it is appropriate to adopt such 
a provision, based on our authority to establish regulations. 
Liquidated damages are easier to administer, reduce administrative 
costs, and provide effective resolution of this matter.
    Proposed paragraph (b) would be based on current Sec.  17.610(b); 
however, we would provide certain clarifications. First, this paragraph 
would apply within one year after an individual meets a description in 
paragraphs (b)(1) through (4) of an individual who must pay damages 
under proposed paragraph (b). Second, whereas current Sec.  
17.610(b)(5) states that the damages are in lieu of ``performing any 
service obligation,'' we would state that these damages would otherwise 
fulfill the terms of the acceptance agreement. Technically, under the 
acceptance agreement, the individual is required to stay enrolled in 
school and maintain acceptable academic standing; however, once he or 
she has met any of the criteria in paragraphs (b)(1) through (4), three 
of which relate to withdrawing from school, those obligations by 
definition cannot be fulfilled. Moreover, we want the rule to be clear 
that once the damages are paid, the individual's liability is resolved. 
Proposed paragraph (b)(4), unlike current Sec.  17.610(b), would state 
that if a participant fails to become certified in the discipline for 
which the degree prepared the participant, if applicable, within 180 
days after such person becomes eligible to apply for certification, the 
participant is considered to be in breach of the acceptance agreement. 
The requirements for obtaining a certification under the VIOMPSP are 
not the same as the requirements for becoming licensed to practice a 
discipline for the HPSP. We believe that 180 days would provide ample 
time to obtain the necessary certification for the VIOMPSP.
    We also note that the amount of damages would be the full amount of 
VIOMPSP funds paid on the individual's behalf. This is the same amount 
paid by an HPSP participant. The authority for this provision is 38 
U.S.C. 7505(a), which authorizes VA to collect the ``unearned portion'' 
of VIOMPSP funds at the time of breach. All of the criteria in Sec.  
17.634(b)(1)-(4) apply prior to the time at which the participant 
fulfills his or her obligated service to VA, and it is through such 
obligated service that the participant earns his or her scholarship.
    The classes of individuals subject to the repayment amount set 
forth in proposed paragraph (b) would be established in paragraphs 
(b)(1) through (4). These paragraphs would parallel current Sec.  
17.610(b)(1) through (4). We would not include a provision similar to 
Sec.  17.610(b)(5) because it references part-time VA employees who 
fail ``to maintain employment in a permanent assignment in a VA health 
care facility while enrolled in the course of training being pursued.'' 
As we have previously stated in this rulemaking, participants in the 
VIOMPSP are not required to be VA employees, so those provisions of 
Sec.  17.610(b)(5) would not be relevant.
    Section 7505(a) of 38 U.S.C. states: ``An individual who receives 
educational assistance under the scholarship program under this chapter 
shall repay to the Secretary an amount equal to the unearned portion of 
such assistance if the individual fails to satisfy the requirements of 
the agreement entered into under section 7504 of this title, except in 
circumstances authorized by the Secretary.'' Proposed Sec.  17.634(c) 
would include a formula to calculate the amount the United States is 
entitled to recover if a participant breaches his or her acceptance 
agreement by failing to complete the obligated service. We would state 
that to calculate the unearned portion of VIOMPSP funds VA would 
``subtract the number of months of obligated service rendered from the 
total months of obligated service owed, divide the remaining months by 
the total obligated service, then multiply by the total amount of 
VIOMPSP funds paid to or on behalf of the participant.'' We would also 
provide a formula as a visual aid for ease of readability. The proposed 
formula would be ``A = P((t-s)/t),'' in which ``A'' is the amount the 
United States is entitled to recover; ``P'' is the amounts paid under 
the VIOMPSP to or on behalf of the participant; ``t'' is the total 
number of months in the participant's period of obligated service; and 
``s'' is the number of months of obligated service rendered. Proposed 
paragraph Sec.  17.634(c) would not parallel Sec.  17.610(c) because 
the statute that governs the repayment of the VIOMPSP, 38 U.S.C. 7505, 
is not the same as the statute that governs the repayment of the HPSP, 
38 U.S.C. 7617.

17.635 Bankruptcy

    The regulations that govern bankruptcy for the VIOMPSP are the same 
as those found in Sec.  17.611, which apply to the HPSP. In an effort 
to simplify the HPSP and VIOMPSP regulations, we propose to provide a 
cross-reference to Sec.  17.611 for the rules that govern bankruptcy, 
in proposed Sec.  17.635.

17.636 Cancellation, Waiver, or Suspension of Obligation

    The regulations that govern cancellation, waiver, or suspension of 
obligation for the VIOMPSP are the same as those found in Sec.  17.612, 
which apply to the HPSP. In an effort to simplify the HPSP and VIOMPSP 
regulations, we propose to provide a cross-reference to Sec.  17.612 
for the rules that govern cancellation, waiver, or suspension of 
obligation, in proposed Sec.  17.636.

Effect of Rulemaking

    The Code of Federal Regulations, as proposed to be revised by this 
proposed rulemaking, would represent the exclusive legal authority on 
this subject. No contrary rules or procedures would be authorized. All 
VA guidance would be read to conform with this proposed rule if 
possible or, if not possible, such guidance would be superseded by this 
rulemaking.

Paperwork Reduction Act

    This proposed rule includes collections of information under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) that require 
approval by the Office of Management and Budget (OMB). Accordingly, 
under 44 U.S.C. 3507(d), VA has submitted a copy of this rulemaking to 
OMB for review. OMB assigns a control number for each collection of 
information it approves. VA may not conduct or

[[Page 75928]]

sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid OMB control number. 
The VA Health Professional Scholarship Program contained a collection 
control number 2900-0352, which expired on April 30, 1997. We propose 
to establish a new collection control number for the revised VA Health 
Professional Scholarship Program and for the new Visual Impairment and 
Orientation and Mobility Professional Scholarship Program. Proposed 
Sec. Sec.  17.604 and 17.629 contain a collection of information. If 
OMB does not approve the collections of information as requested, VA 
will immediately remove the provisions containing a collection of 
information or take such other action as directed by OMB.
    Comments on the collections of information contained in this 
proposed rule should be submitted to the Office of Management and 
Budget, Attention: Desk Officer for the Department of Veterans Affairs, 
Office of Information and Regulatory Affairs, Washington, DC 20503, 
with copies sent: By mail or hand delivery to the Director, Office of 
Regulation Policy and Management (02REG), Department of Veterans 
Affairs, 810 Vermont Ave., NW., Room 1068, Washington, DC 20420; by fax 
to (202) 273-9026; or through www.Regulations.gov. Comments should 
indicate that they are submitted in response to ``2900-AO34-VA Health 
Professional Scholarship and Visual Impairment and Orientation and 
Mobility Professional Scholarship Programs.''
    OMB is required to make a decision concerning the collections of 
information contained in this proposed rule between 30 and 60 days 
after publication of this document in the Federal Register. Therefore, 
a comment to OMB is best assured of having its full effect if OMB 
receives it within 30 days of publication. This does not affect the 
deadline for the public to comment on the proposed rule.
    VA considers comments by the public on proposed collections of 
information in--
     Evaluating whether the proposed collections of information 
are necessary for the proper performance of the functions of VA, 
including whether the information will have practical utility;
     Evaluating the accuracy of VA's estimate of the burden of 
the proposed collections of information, including the validity of the 
methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collections of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    Proposed Sec. Sec.  17.604 and 17.629 contain collections of 
information under the Paperwork Reduction Act of 1995 for which we are 
requesting approval by OMB. Under proposed Sec. Sec.  17.612 and 
17.636, a participant of the VA Health Professional Scholarship Program 
or Visual Impairment and Orientation and Mobility Professional 
Scholarship Program may seek a waiver or suspension of obligated 
service or payment under either program by submitting a written request 
to VA. The requirement for such a written request, however, does not 
constitute a collection of information under the Paperwork Reduction 
Act of 1995 requiring OMB approval because the anticipated number of 
respondents within a 12-month period is less than ten. See 5 CFR 
1320.3(c).
    Title: Application for VA Health Professional Scholarship and 
Visual Impairment and Orientation and Mobility Professional Scholarship 
Programs.
    Summary of collection of information: The information required 
determines the eligibility or suitability of an applicant desiring to 
receive an award under the provisions of 38 U.S.C. 7601 through 7619, 
and 38 U.S.C. 7501 through 7505. The VA Health Professional Scholarship 
Program awards scholarships to students receiving education or training 
in a direct or indirect healthcare services discipline to assist in 
providing an adequate supply of such personnel for VA and for the 
United States. The Visual Impairment and Orientation and Mobility 
Professional Scholarship Program awards scholarships to students 
pursuing a program of study leading to a degree in visual impairment or 
orientation and mobility in order to increase the supply of qualified 
blind rehabilitation specialists for VA and the Nation.
    Description of the need for information and proposed use of 
information: The information is needed to apply for the VA Health 
Professional Scholarship Program or Visual Impairment and Orientation 
and Mobility Professional Scholarship Program.
    Description of likely respondents: Potential participants of the VA 
Health Professional Scholarship Program or Visual Impairment and 
Orientation and Mobility Professional Scholarship Program.
    Estimated number of HPSP respondents per year: 5,000.
    Estimated number of VIOMPSP respondents per year: 1,500.
    Estimated frequency of HPSP responses per year: once.
    Estimated frequency of VIOMPSP responses per year: once.
    Estimated average burden per response for HPSP: 5 hours per year.
    Estimated average burden per response for VIOMPSP: 5 hours per 
year.
    Estimated total HPSP annual reporting and recordkeeping burden: 
25,000 hours per year.
    Estimated total VIOMPSP annual reporting and recordkeeping burden: 
7,500 hours per year.

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act, 5 
U.S.C. 601- 612. This proposed rule would not directly affect any small 
entities. Only applicants for scholarships could be directly affected. 
Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is exempt from 
the initial and final regulatory flexibility analysis requirements of 
sections 603 and 604.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action,'' which requires review by OMB, as 
``any regulatory action that is likely to result in a rule that may: 
(1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities; (2) Create a serious

[[Page 75929]]

inconsistency or otherwise interfere with an action taken or planned by 
another agency; (3) Materially alter the budgetary impact of 
entitlements, grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) Raise novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined and it has 
been determined not to be a significant regulatory action under 
Executive Order 12866.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any given year. This proposed rule would have no such 
effect on State, local, and tribal governments, or on the private 
sector.

Catalog of Federal Domestic Assistance

    There are no Catalog of Federal Domestic Assistance numbers and 
titles for this rule.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. John R. 
Gingrich, Chief of Staff, Department of Veterans Affairs, approved this 
document on December 18, 2012, for publication.

List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Claims, Day care, Dental health, Drug abuse, Foreign relations, 
Government contracts, Grant programs-health, Grant programs-veterans, 
Health care, Health facilities, Health professions, Health records, 
Homeless, Medical and dental schools, Medical devices, Medical 
research, Mental health programs, Nursing homes, Philippines, Reporting 
and recordkeeping requirements, Scholarships and fellowships, Travel 
and transportation expenses, Veterans.

    Dated: December 18, 2012.
Robert C. McFetridge,
Director, Office of Regulation Policy and Management, Office of the 
General Counsel, Department of Veterans Affairs.
    For the reasons set forth in the preamble, we propose to amend 38 
CFR part 17 as follows:

PART 17--MEDICAL

    1. The authority citation for part 17 continues to read as follows:

    Authority:  38 U.S.C. 501, and as noted in specific sections.

    2. Revise the authority citation preceding Sec.  17.600 to read as 
follows:

    Authority:  38 U.S.C. 7601-7619, 7633, 7634, and 7636.
    3. Revise Sec.  17.600 to read as follows:


Sec.  17.600  Purpose.

    The purpose of Sec. Sec.  17.600 through 17.612 is to establish the 
requirements for the award of scholarships under the VA Health 
Professional Scholarship Program (HPSP) to students pursuing a course 
of study leading to a degree in certain healthcare occupations, listed 
in 38 U.S.C. 7401(1) and (3), to assist in providing an adequate supply 
of such personnel for VA. The HPSP allows VA to provide scholarship 
awards to facilitate recruitment and retention of employees in several 
hard-to-fill healthcare occupations.

(Authority: 38 U.S.C. 7601(b))


    4. Revise Sec.  17.601 to read as follows:


Sec.  17.601  Definitions.

    The following definitions apply to Sec. Sec.  17.600 through 
17.636:
    Acceptable level of academic standing means the level at which a 
participant may continue to attend school under the standards and 
practices of the school at which a participant is enrolled in a course 
of study for which an HPSP or VIOMPSP scholarship was awarded.
    Acceptance agreement means a signed legal document between VA and a 
participant of the HPSP or VIOMPSP that specifies the obligations of VA 
and the participant upon acceptance to the HPSP or VIOMPSP. An 
acceptance agreement must incorporate by reference, and cannot be 
inconsistent with, Sec. Sec.  17.600 through 17.612 (for HPSP 
agreements) or Sec. Sec.  17.626 through 17.636 (for VIOMPSP 
agreements), and must include:
    (1) A mobility agreement.
    (2) Agreement to accept payment of the scholarship.
    (3) Agreement to perform obligated service.
    (4) Agreement to maintain enrollment and attendance in the course 
of study for which the scholarship was awarded, and to maintain an 
acceptable level of academic standing.
    Affiliation agreement means a legal document that enables the 
clinical education of trainees at a VA or non-VA medical facility. An 
affiliation agreement is required for all education or training that 
involves direct patient contact, or contact with patient information, 
by trainees from a non-VA institution.
    Credential. Credential means the licensure, registration, 
certification, required education, relevant training and experience, 
and current competence necessary to meet VA's qualification standards 
for employment in certain healthcare occupations.
    Citizen of the United States means any person born, or lawfully 
naturalized, in the United States, subject to its jurisdiction and 
protection, and owing allegiance thereto.
    Degree represents the successful completion of the course of study 
for which a scholarship was awarded.
    (1) HPSP. For the purposes of the HPSP, VA recognizes the following 
degrees: a doctor of medicine; doctor of osteopathy; doctor of 
dentistry; doctor of optometry; doctor of podiatry; or an associate, 
baccalaureate, master's, or doctorate degree in another healthcare 
discipline needed by VA.
    (2) VIOMPSP. For the purposes of the VIOMPSP, VA recognizes a 
bachelor's, master's, education specialist or doctorate that meets the 
core curriculum and supervised practice requirements in visual 
impairment and blindness.
    Full-time student means an individual who meets the requirements 
for full time attendance as defined by the school in which they are 
enrolled.
    HPSP means the VA Health Professional Scholarship Program 
authorized by 38 U.S.C. 7601 through 7619.
    Mobility agreement means a signed legal document between VA and a 
participant of the HPSP or VIOMPSP, in which the participant agrees to 
accept assignment at a VA facility selected by VA where he or she will 
fulfill the obligated service requirement. A mobility agreement must be 
included in the participant's acceptance agreement. Relocation to 
another geographic location may be required.
    Obligated service means the period of time during which the HPSP or 
VIOMPSP participant must be employed by VA in a full-time clinical 
occupation for which the degree prepared the participant as a 
requirement of the acceptance agreement.
    Part-time student (1) HPSP. For the purposes of the HPSP, part-time 
student

[[Page 75930]]

means an individual who is a VA employee, and who has been accepted for 
enrollment or enrolled for study leading to a degree on a less than 
full-time basis but no less than half-time basis.
    (2) VIOMPSP. For the purposes of the VIOMPSP, part-time student 
means an individual who has been accepted for enrollment or enrolled 
for study leading to a degree on a less than full-time basis but no 
less than half-time basis.
    Participant or scholarship program participant means an individual 
whose application to the HPSP or VIOMPSP has been approved, whose 
acceptance agreement has been consummated by VA, and who has yet to 
complete the period of obligated service or otherwise satisfy the 
obligation or financial liabilities of such agreement.
    Required fees means those fees which are charged by the school to 
all students pursuing a similar curriculum in the same school.
    Scholarship Program means the VA Health Professional Scholarship 
Program (HPSP) authorized by 38 U.S.C. 7601 through 7619.
    School means an academic institution that is accredited by a body 
or bodies recognized for accreditation by the U.S. Department of 
Education or by the Council for Higher Education Accreditation (CHEA), 
and that meets the following requirements:
    (1) For the purposes of the HPSP, offers a course of study leading 
to a degree in a healthcare service discipline needed by VA.
    (2) For the purposes of the VIOMPSP, offers a course of study 
leading to a degree in visual impairment or orientation and mobility.
    School year means for purposes of the HPSP and its stipend payment, 
and the VIOMPSP, all or part of the 12-month period that starts on the 
date the participant begins school as a full-time student.
    Secretary means the Secretary of Veterans Affairs or designee.
    State means one of the several States, Territories and possessions 
of the United States, the District of Columbia and the Commonwealth of 
Puerto Rico.
    Under Secretary for Health means the Under Secretary for Health of 
the Department of Veterans Affairs or designee.
    VA means the Department of Veterans Affairs.
    VA employee means an individual permanently employed by VA. A VA 
employee does not include an individual who is employed temporarily or 
on a contractual basis.
    VA healthcare facility means a VA medical center, independent 
outpatient clinic, domiciliary, nursing home (community living center), 
residential treatment program and any of a variety of community based 
clinics (including community based outpatient clinics, rural health 
resource centers, primary care telehealth clinics, and Vet Centers), 
consolidated mail outpatient pharmacies, and research centers.
    VIOMPSP means the Visual Impairment and Orientation and Mobility 
Professional Scholarship Program authorized by 38 U.S.C. 7501 through 
7505.

(Authority: 38 U.S.C. 301, 7501(a)(1), 7504, 7602(a), 7604(1)(B), 
7633)

    5. Amend Sec.  17.602 by:
    a. Revising paragraph (a)(1).
    b. Adding paragraph (a)(6).
    The revision and addition read as follows:


Sec.  17.602  Eligibility for the HPSP.

    (a) * * *
    (1) Be unconditionally accepted for enrollment or be enrolled as a 
full-time student in an accredited school located in a State;
* * * * *
    (6) Clinical tours. An applicant for a scholarship under the HPSP 
must agree to perform clinical tours while enrolled in the course of 
education or training for which the scholarship is provided. VA will 
determine the assignments and locations of the clinical tour.

(Authority: 38 U.S.C. 7618(b))

* * * * *
    6. Revise Sec.  17.603 to read as follows:


Sec.  17.603  Availability of HPSP scholarships.

    (a) General. A HPSP scholarship will be awarded only when necessary 
to assist VA in alleviating shortages or anticipated shortages of 
personnel in the health professions stated in paragraph (b) of this 
section. VA will determine the existence of shortage of personnel in 
accordance with specific criteria for each healthcare profession. VA 
has the authority to establish the number of scholarships to be awarded 
in a fiscal year, and the number that will be awarded to full-time and 
part-time students.
    (b) Qualifying fields of education. VA will grant HPSP scholarships 
in a course of study in those disciplines or programs where recruitment 
is necessary for the improvement of healthcare of veterans. Those 
disciplines or programs are listed in 38 U.S.C. 7401(1) and (3).

(Authority: 38 U.S.C. 7401(1), (3), 7612(b)(2), 7612(b)(4), and 
7603(b)(1))

    7. Revise Sec.  17.604 to read as follows:


Sec.  17.604  Application for the HPSP.

    An applicant for the HPSP must submit an accurate and complete 
application including a signed written acceptance agreement.

(Authority: 38 U.S.C. 7612(c)(1)(B))


    (The Office of Management and Budget has approved the 
information collection requirements in this section under control 
number XXXX-XXXX)

    8. Amend Sec.  17.605 by:
    a. Revising paragraph (a) introductory text.
    b. Redesignating paragraphs (d) and (e) as paragraphs (e) and (f), 
respectively.
    c. Add new paragraph (d).
    d. The revisions read as follows:


Sec.  17.605  Selection of HPSP participants.

    (a) General. In deciding which HPSP application to approve, VA will 
first consider applications submitted by applicants entering their 
final year of education or training and applicants who previously 
received HPSP scholarships and who meet the conditions of paragraph (f) 
of this section. Except for paragraph (f) of this section, applicants 
will be evaluated and selected using the criteria specified in 
paragraph (b) of this section. If there are a larger number of equally 
qualified applicants than there are awards to be made, then VA will 
first select veterans, and then use a random method as the basis for 
further selection. In selecting participants to receive awards as part-
time students, VA may, at VA's discretion--
* * * * *
    (d) Notification of approval. VA will notify the individual in 
writing that his or her application has been accepted and approved. An 
individual becomes a participant in the program upon receipt of such 
approval by VA.
* * * * *
    9. Amend Sec.  17.607 by:
    a. Revising paragraph (b)(1).
    b. Revising the authority citation at the end of paragraph (b).
    c. Revising paragraphs (c) and (d).
    The revisions would read as follows:


Sec.  17.607  Obligated service.

* * * * *
    (b) Beginning of service. (1)(i) Date of employment. Except as 
provided in paragraph (b)(2) of this section, a participant's obligated 
service will begin on the date VA appoints the participant as a full-
time VA employee in a clinical occupation for which the degree prepared 
the participant. VA will appoint the participant to such position as 
soon as possible, but no later than 90 days after the date that the 
participant

[[Page 75931]]

receives his or her degree, or the date the participant becomes 
licensed in a State or becomes certified, whichever is later. VA will 
actively assist and monitor participants to ensure State licenses or 
certificates are obtained in a minimal amount of time following 
graduation. If a participant fails to obtain his or her degree, or 
fails to become licensed in a State or become certified no later than 
180 days after receiving the degree, the participant is considered to 
be in breach of the acceptance agreement.
    (ii) Notification. VA will notify the participant of the work 
assignment and its location no later than 60 days before the date on 
which the participant must begin work.
    (iii) VA mentor. VA will ensure that the participant is assigned a 
mentor who is employed at the same facility where the participant 
performs his or her obligated service at the commencement of such 
service.
* * * * *

(Authority: 38 U.S.C. 7616(b), 7616(c), 7618(a))


    (c) Duration of service. (1) Full-time student. A participant who 
attended school as a full-time student will agree to serve as a full-
time clinical employee in the Veterans Health Administration for 1 
calendar year for each school year or part thereof for which a 
scholarship was awarded, but for no less than 2 years.
    (2) Part-time student. Obligated service to VA for a participant 
who attended school as a part-time student must be satisfied by full-
time clinical employment. The period of obligated service will be 
reduced from that which a full-time student must serve under paragraph 
(c)(1) of this section in accordance with the proportion that the 
number of credit hours carried by the part-time student in any school 
year bears to the number of credit hours required to be carried by a 
full-time student who is pursuing the same degree; however, the period 
of obligated service will not be for less than 1 year.

(Authority: 38 U.S.C. 7612(c)(1)(B), 7612(c)(3)(A), 7618(c))

    (d) Location for service. VA reserves the right to make final 
decisions on the location for service obligation. A participant who 
receives a scholarship as a full-time student must be willing to 
relocate to another geographic location to carry out his or her service 
obligation according to the participant's mobility agreement. A 
participant who received a scholarship as a part-time student may be 
allowed to serve the period of obligated service at the healthcare 
facility where the individual was assigned when the scholarship was 
authorized, if there is a vacant position which will satisfy the 
individual's mobility agreement at that facility.

(Authority: 38 U.S.C. 7616(a))

* * * * *
    10. Revise Sec.  17.611 to read as follows:


Sec.  17.611  Bankruptcy.

    Any payment obligation incurred may not be discharged in bankruptcy 
under title 11 U.S.C. until 5 years after the date on which the payment 
obligation is due. This section applies to participants in the HPSP and 
the VIOMPSP.

(Authority: 38 U.S.C. 7505(d), 7634(c))

    11. Amend Sec.  17.612 by:
    a. Redesignating paragraph (a) as new paragraph (a)(2).
    b. Adding new paragraphs (a) and (a)(1).
    c. Revising paragraph (b)(1).
    d. Removing the authority citation at the end of paragraph (c)
    e Adding new paragraphs (e) and (f).
    f. Revising the authority citation at the end of the section..
    The revisions and additions read as follows:


Sec.  17.612  Cancellation, waiver, or suspension of obligation.

    (a) General. (1) This section applies to participants in the HPSP 
or the VIOMPSP.
    (2) Any obligation of a participant for service or payment will be 
cancelled upon the death of the participant.
    (b) Waivers or suspensions. (1) A participant may seek a waiver or 
suspension of the obligated service or payment obligation incurred 
under this program by submitting a written request to VA setting forth 
the basis, circumstances, and causes which support the requested 
action. Requests for waivers or suspensions must be submitted to VA no 
later than 1 year after the date VA notifies the participant that he or 
she is in breach of his or her acceptance agreement. A participant 
seeking a waiver or suspension must comply with requests for additional 
information from VA no later than 30 days after the date of any such 
request.
    (i) Waivers. A waiver is a permanent release by VA of the 
obligation either to repay any scholarship funds that have already been 
paid to or on behalf of the participant, or to fulfill any other 
acceptance agreement requirement. If a waiver is granted, then the 
waived amount of scholarship funds may be considered taxable income.
    (ii) Suspensions. VA may approve an initial request for a 
suspension for a period of up to 1 year. A suspension may be extended 
for one additional year, after which time the participant will be in 
breach of his or her acceptance agreement. If a suspension is approved:
    (A) VA will temporarily discontinue providing any scholarship funds 
to or on behalf of the participant while the participant's scholarship 
is in a suspended status; or
    (B) VA will temporarily delay the enforcement of acceptance 
agreement requirements.
* * * * *
    (e) Eligibility to reapply for award. Any previous participant of 
any federally sponsored scholarship program who breached his or her 
acceptance agreement or similar agreement in such scholarship program 
is not eligible to apply for a HPSP or VIOMPSP. This includes 
participants who previously applied for, and received, a waiver under 
this section.
    (f) Finality of decisions. Decisions to approve or disapprove 
waiver requests are final and binding determinations. Such 
determinations are not subject to reconsideration or appeal.

(Authority: 38 U.S.C. 7505(c), 7634(a), 7634(b))

    12. Amend part 17 by adding an undesignated center heading and 
Sec. Sec.  17.625 through 17.636 to read as follows:

Visual Impairment and Orientation and Mobility Professional Scholarship 
Program

Sec.
17.625 Purpose.
17.626 Definitions.
17.627 Eligibility for the VIOMPSP.
17.628 Availability of VIOMPSP scholarships.
17.629 Application for the VIOMPSP.
17.630 Selection of VIOMPSP participants.
17.631 Award procedures.
17.632 Obligated service.
17.633 Deferment of obligated service.
17.634 Failure to comply with terms and conditions of participation.
17.635 Bankruptcy.
17.636 Cancellation, waiver, or suspension of obligation.

Visual Impairment and Orientation and Mobility Professional Scholarship 
Program


Sec.  17.625  Purpose.

    The purpose of Sec. Sec.  17.625 through 17.636 is to establish the 
requirements for the award of scholarships under the Visual Impairment 
and Orientation and Mobility Professional Scholarship Program (VIOMPSP) 
to students pursuing a program of study leading to a degree in visual 
impairment or orientation and mobility. The scholarship is designed to 
increase the supply of qualified Blind Rehabilitation

[[Page 75932]]

Specialists and Blind Rehabilitation Outpatient Specialists available 
to VA. The scholarship will be publicized throughout educational 
institutions in the United States, with an emphasis on disseminating 
information to such institutions with high numbers of Hispanic students 
and to historically black colleges and universities.

    (Authority: 38 U.S.C. 7501)


Sec.  17.626  Definitions.

    For the definitions that apply to Sec. Sec.  17.625 through 17.636, 
see Sec.  17.601.

(Authority: 38 U.S.C. 501)


Sec.  17.627  Eligibility for the VIOMPSP.

    (a) General. To be eligible for the VIOMPSP, an applicant must meet 
the following requirements:
    (1) Be unconditionally accepted for enrollment or currently 
enrolled in a program of study leading to a degree in orientation and 
mobility, low vision therapy, or vision rehabilitation therapy, or a 
dual degree (a program in which an individual becomes certified in two 
of the three professional certifications offered by the Academy for 
Certification of Visual Rehabilitation and Education Professionals) at 
an accredited educational institution that is in a State;
    (2) Be a citizen of the United States; and
    (3) Submit an application to participate in the VIOMPSP, as 
described in Sec.  17.629.
    (b) Obligated service to another entity. Any applicant who, at the 
time of application, owes a service obligation to any other entity to 
perform service after completion of the course of study is ineligible 
to receive a VIOMPSP scholarship.

(Authority: 38 U.S.C. 7501(a), 7502(a), 7504(3))

Sec.  17.628  Availability of VIOMPSP scholarships.

    VA will make awards under the VIOMPSP only when VA determines it is 
necessary to assist in alleviating shortages or anticipated shortages 
of personnel in visual impairment or orientation and mobility programs. 
VA's determination of the number of VIOMPSP scholarships to be awarded 
in a fiscal year, and the number that will be awarded to full-time and/
or part-time students, is subject to the availability of 
appropriations.

    (Authority: 38 U.S.C. 7501(a), 7503(c)(2))


Sec.  17.629  Application for the VIOMPSP.

    (a) Application-general. Each individual desiring a VIOMPSP 
scholarship must submit an accurate and complete application, including 
a signed written acceptance agreement.
    (b) VA's duties. VA will notify applicants prior to acceptance in 
the VIOMPSP of the following information:
    (1) A fair summary of the rights and liabilities of an individual 
whose application is approved by VA and whose acceptance agreement is 
consummated by VA; and
    (2) Full description of the terms and conditions that apply to 
participation in the VIOMPSP and service in VA.

    (Authority: 38 U.S.C. 501(a), 7502(a)(2))
(Approved by the Office of Management and Budget under control 
number XXXX-XXXX)


Sec.  17.630  Selection of VIOMPSP participants.

    (a) General. In deciding which VIOMPSP applications to approve, VA 
will first consider applications submitted by applicants entering their 
final year of education or training. Applicants will be evaluated and 
selected using the criteria specified in paragraph (b) of this section. 
If there are a larger number of equally qualified applicants than there 
are awards to be made, then VA will first select veterans, and then use 
a random method as the basis for further selection.
    (b) Selection criteria. In evaluating and selecting participants, 
VA will take into consideration those factors determined necessary to 
assure effective participation in the VIOMPSP. These factors will 
include, but are not limited to, the following:
    (1) Academic performance;
    (2) Work/volunteer experience, including prior rehabilitation or 
healthcare employment and VA employment;
    (3) Faculty and employer recommendations; or
    (4) Career goals.
    (c) Notification of approval. VA will notify the individual in 
writing that his or her application has been accepted and approved. An 
individual becomes a participant in the program upon receipt of such 
approval by VA.
    (d) Duration of VIOMPSP award. VA will award a VIOMPSP scholarship 
for a period of time equal to the number of years required to complete 
a program of study leading to a degree in orientation and mobility, low 
vision therapy, or vision rehabilitation therapy, or a dual degree. The 
number of years covered by an individual scholarship award will be 
based on the number of school years that the participant has yet to 
complete his or her degree at the time the VIOMPSP scholarship is 
awarded. Subject to the availability of funds, VA will award the 
VIOMPSP as follows:
    (1) Full-time scholarship. A full-time scholarship is awarded for a 
minimum of 1 school year to a maximum of 4 school years;
    (2) Part-time scholarships. A part-time scholarship is awarded for 
a minimum of 1 school year to a maximum of 6 school years.

(Authority: 38 U.S.C. 7504(3))


Sec.  17.631  Award procedures.

    (a) Amount of scholarship. (1) A VIOMPSP scholarship award will not 
exceed the total tuition and required fees for the program of study in 
which the applicant is enrolled. All such payments to scholarship 
participants are exempt from Federal taxation.
    (2) The total amount of assistance provided under the VIOMPSP for 
an academic year to an individual who is a full-time student may not 
exceed $15,000.00.
    (3) The total amount of assistance provided under the VIOMPSP for 
an academic year to a participant who is a part-time student shall bear 
the same ratio to the amount that would be paid under paragraph (a)(2) 
of this section if the participant were a full-time student as the 
coursework carried by the participant to full-time coursework.
    (4) The total amount of assistance provided to an individual may 
not exceed $45,000.00.
    (5) In the case of an individual enrolled in a program of study 
leading to a dual degree described in Sec.  17.627(a)(1), such tuition 
and fees will not exceed the amounts necessary for the minimum number 
of credit hours to achieve such dual degree.
    (6) Financial assistance may be provided to an individual under the 
VIOMPSP to supplement other educational assistance to the extent that 
the total amount of educational assistance received by the individual 
during an academic year does not exceed the total tuition and fees for 
such academic year.
    (7) VA will make arrangements with the school in which the 
participant is enrolled to issue direct payment for the amount of 
tuition or fees on behalf of the participant.
    (b) Repeated course work. Additional costs relating to the repeated 
course work will not be paid under this program. VA will resume any 
scholarship payments suspended under this section upon notification by 
the school that the participant has returned from the leave-of-absence 
or has satisfactorily completed the repeated course work and is 
pursuing the course of study for which the VIOMPSP was awarded.

(Authority: 38 U.S.C. 7503, 7504(3))



[[Page 75933]]




Sec.  17.632  Obligated service.

    (a) General provision. Except as provided in paragraph (d) of this 
section, each participant is obligated to provide service as a full-
time clinical VA employee in the rehabilitation practice of the 
participant's discipline in an assignment or location determined by VA.
    (b) Beginning of service. A participant's obligated service will 
begin on the date on which the participant obtains any required 
applicable credentials and when appointed as a full-time clinical VA 
employee in a position for which the degree prepared the participant. 
VA will appoint the participant to such position as soon as possible, 
but no later than 90 days after the date that the participant receives 
his or her degree, or the date the participant obtains any required 
applicable credentials, whichever is later. If a participant fails to 
obtain his or her degree, or fails to obtain any required applicable 
credentials within 180 days after receiving the degree, the participant 
is considered to be in breach of the acceptance agreement.
    (c) Duration of service. The participant will agree to serve as a 
full-time clinical VA employee for 3 calendar years which must be 
completed no later than 6 years after the participant has completed the 
program for which the scholarship was awarded and received a degree 
referenced in Sec.  17.627(a)(1).
    (d) Location and assignment of obligated service. VA reserves the 
right to make final decisions on the location and assignment of the 
obligated service. A participant who receives a scholarship must agree 
as part of the participant's mobility agreement that he or she is 
willing to accept the location and assignment where VA assigns the 
obligated service. Geographic relocation may be required.
    (e) Creditability of advanced clinical training. No period of 
advanced clinical training will be credited towards satisfying the 
period of obligated service incurred under the VIOMPSP.

(Authority: 38 U.S.C. 7504(2)(D), 7504(3))


Sec.  17.633  Deferment of obligated service.

    Deferment of obligated service under the VIOMPSP is treated in the 
same manner as deferment of obligated service under the HPSP under 
Sec.  17.608.

(Authority: 38 U.S.C. 7504(3))


Sec.  17.634  Failure to comply with terms and conditions of 
participation.

    (a) Participant refuses to accept payment of the VIOMPSP. If a 
participant, other than one described in paragraph (b) of this section, 
refuses to accept payment or instructs the school not to accept payment 
of the VIOMPSP scholarship provided by VA, the participant must, in 
addition to any obligation incurred under the agreement, pay to the 
United States the amount of $1,500 in liquidated damages. Payment of 
this amount must be made no later than 90 days from the date that the 
participant fails to accept payment of the VIOMPSP or instructs the 
school not to accept payment.
    (b) Participant fails to complete course of study or does not 
obtain certification. A participant described in paragraphs (b)(1) 
through (4) of this section must, instead of otherwise fulfilling the 
terms of his or her acceptance agreement, pay to the United States an 
amount equal to all VIOMPSP funds awarded under the acceptance 
agreement. Payment of this amount must be made no later than 1 year 
after the date that the participant meets any of the criteria described 
in paragraphs (b)(1) through (4) of this section, unless VA determines 
that a longer period is necessary to avoid hardship. No interest will 
be charged on any part of this indebtedness. A participant will pay 
such amount if one of the following criteria is met:
    (1) The participant fails to maintain an acceptable level of 
academic standing;
    (2) The participant is dismissed from the school for disciplinary 
reasons;
    (3) The participant, for any reason, voluntarily terminates the 
course of study or program for which the scholarship was awarded 
including a reduction of course load from full-time to part-time before 
completing the course of study or program; or
    (4) The participant fails to become certified in the discipline for 
which the degree prepared the participant, if applicable, no later than 
180 days after the date such person becomes eligible to apply for 
certification.
    (c) Participant fails to perform all or any part of their service 
obligation. (1) Participants who breach their agreements by failing to 
begin or complete their service obligation, for any reason, including 
the loss, revocation, suspension, restriction, or limitation of 
required certification, and other than provided for under paragraph (b) 
of this section, must repay the portion of all VIOMPSP funds paid to or 
on behalf of the participant, adjusted for the service that they 
provided. To calculate the unearned portion of VIOMPSP funds, subtract 
the number of months of obligated service rendered from the total 
months of obligated service owed, divide the remaining months by the 
total obligated service, then multiply by the total amount of VIOMPSP 
funds paid to or on behalf of the participant. The following formula 
may be used in determining the unearned portion:
A = P((t-s)/t) in which

    ``A'' is the amount the United States is entitled to recover;
    ``P'' is the amounts paid under the VIOMPSP, to or on behalf of 
the participant;
    ``t'' is the total number of months in the participant's period 
of obligated service; and
    ``s'' is the number of months of obligated service rendered.

    (2) The amount that the United States is entitled to recover will 
be paid no later than 1 year after the date the applicant failed to 
begin or complete the period of obligated service, as determined by VA.

(Authority: 38 U.S.C. 7505(a), 7505(b))


Sec.  17.635  Bankruptcy.

    Bankruptcy under the VIOMPSP is treated in the same manner as 
bankruptcy for the HPSP under Sec.  17.611.

(Authority: 38 U.S.C. 7505(c), 7505(d))


Sec.  17.636  Cancellation, waiver, or suspension of obligation.

    Cancellation, waiver, or suspension procedures under the VIOMPSP 
are the same as those procedures for the HPSP under Sec.  17.612.

(Authority: 38 U.S.C. 7505(c))

[FR Doc. 2012-30811 Filed 12-21-12; 4:15 pm]
BILLING CODE 8320-01-P