Student Loan Programs Authorized by the
March 16, 2021
Public Health Service Act: An Overview
Elayne J. Heisler
Public Health Service Act: An Overview
Updated June 9, 2025
(R46720)
Jump to Main Text of Report
Summary
The Public Health Service Act authorizes several student loan programs that support The Public Health Service Act authorizes several student loan programs that support
Specialist in Health
health workforce development. The Department of Health and Human Services (HHS), health workforce development. The Department of Health and Human Services (HHS),
Services
through the Health Resources and Services Administration (HRSA), administers five through the Health Resources and Services Administration (HRSA), administers five
active student loan programs: active student loan programs:
Alexandra Hegji
Analyst in Social Policy
Health Professions Student Loans: available to individuals available to individuals
who are studying who are studying
dentistry, optometry, pharmacy, podiatric, or veterinary medicine. dentistry, optometry, pharmacy, podiatric, or veterinary medicine.
Loans for Disadvantaged Students: available to individuals available to individuals
from from
disadvantaged backgrounds who are pursuing degrees in dentistry, optometry, disadvantaged backgrounds who are pursuing degrees in dentistry, optometry,
pharmacy, pharmacy,
al opathicallopathic, osteopathic, or veterinary medicine., osteopathic, or veterinary medicine.
Primary Care Loans: available to individuals available to individuals
who are studying who are studying
al opathicallopathic or osteopathic or osteopathic
medicine. medicine.
Nursing Student Loans: available to individuals available to individuals
who are studying for an associatewho are studying for an associate
’'s, bachelors, bachelor
’'s, s,
or graduate degree in nursing.or graduate degree in nursing.
Nurse Faculty Loan Program: available to graduate-level nurses who are interested in available to graduate-level nurses who are interested in
becoming nurse faculty. These loans are becoming nurse faculty. These loans are
partial y cancel edpartially cancelled in exchange for serving as nurse in exchange for serving as nurse
faculty.faculty.
The first four of these programs are operated as revolving loan funds, while the Nurse Faculty Loan Program, The first four of these programs are operated as revolving loan funds, while the Nurse Faculty Loan Program,
which includes a loan which includes a loan
cancel ationcancellation benefit, does not. As of benefit, does not. As of
July 31, 2019academic year 2022-2023, approximately , approximately
81,80055,275 of these loans, of these loans,
together totaling approximately $together totaling approximately $
900 mil ion723 million, were outstanding., were outstanding.
Under these programs, institutions make loans directly to students using a combination of federal and institutional Under these programs, institutions make loans directly to students using a combination of federal and institutional
funds. Student eligibilityfunds. Student eligibility
criteria and loan terms and conditions are criteria and loan terms and conditions are
general ygenerally prescribed in statute and regulations. prescribed in statute and regulations.
Although HRSAAlthough HRSA
oversees the oversees the
overal overall operation of the programs, institutions are responsible for the day-to-day operation of the programs, institutions are responsible for the day-to-day
administration of the programs, including loan servicing and collection activities, which are guided by statutory administration of the programs, including loan servicing and collection activities, which are guided by statutory
and regulatory requirements.and regulatory requirements.
A sixth program—the Health Education Assistance Loan (HEAL) Program—previously made loans available to A sixth program—the Health Education Assistance Loan (HEAL) Program—previously made loans available to
eligible eligible graduate students in schools of medicine, osteopathy, dentistry, veterinary medicine, optometry, podiatry, graduate students in schools of medicine, osteopathy, dentistry, veterinary medicine, optometry, podiatry,
public health, pharmacy, and chiropractic medicine, or in programs in health administration and clinical public health, pharmacy, and chiropractic medicine, or in programs in health administration and clinical
psychology. Congress terminated the authority to make new HEAL Program loans after September 30, 1998,psychology. Congress terminated the authority to make new HEAL Program loans after September 30, 1998,
but but
many program loans remain outstanding, and the federal government remains responsible for administering the many program loans remain outstanding, and the federal government remains responsible for administering the
program. HHS program. HHS
original y originally administered the program, but the Consolidated Appropriations Act, 2014 (P.L. 113-76), administered the program, but the Consolidated Appropriations Act, 2014 (P.L. 113-76),
transferred administration of the program to the Department of Education. As of transferred administration of the program to the Department of Education. As of
November 15, 2017February 29, 2024, HEAL , HEAL
program loans totaling approximately $program loans totaling approximately $
187 mil ion421 million, borrowed by , borrowed by
11,3906,500 individuals, were outstanding.
The Public Health individuals, were outstanding.
Congressional Research Service
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Contents
Loan Program Overview .................................................................................................. 1
Active PHSA Loan Programs ............................................................................................ 2
School Eligibility for Program Participation................................................................... 3
Student Eligibility for Receiving Loans......................................................................... 5
HPSL, LDS, PCL, and NSL Loan Terms and Conditions ................................................. 7
Interest Rate ........................................................................................................ 8
Grace Period........................................................................................................ 8
Repayment .......................................................................................................... 8
Default ............................................................................................................. 10
Loan Cancel ation .............................................................................................. 11
Program Data.......................................................................................................... 11
NFLP Loan Cancel ation Data .............................................................................. 17
Health Education Assistance Loan (HEAL) Program .......................................................... 17
Student Eligibility.................................................................................................... 18
Loan Terms and Conditions....................................................................................... 18
Interest Rates ..................................................................................................... 18
Repayment ........................................................................................................ 19
Default ............................................................................................................. 20
Loan Discharge .................................................................................................. 21
Tables
Table 1. Active PHSA Loan Program Data ........................................................................ 13
Appendixes
Appendix. Glossary of Terms .......................................................................................... 22
Contacts
Author Information ....................................................................................................... 22
Congressional Research Service
Student Loan Programs Authorized by the Public Health Service Act: An Overview
he Public Health Service Act (PHSA, 42 U.S.C. §§201 et. seq.) authorizes five student Service Act (PHSA, 42 U.S.C. §§201 et. seq.) authorizes five student
loan programs administered by the Department of Health and Human Services (HHS) loan programs administered by the Department of Health and Human Services (HHS)
T through the Health Resources and Services Administration (HRSA): (1) Health through the Health Resources and Services Administration (HRSA): (1) Health
Professions Student Loans, (2) Loans for Disadvantaged Students, (3) Primary Care Loans, (4) Professions Student Loans, (2) Loans for Disadvantaged Students, (3) Primary Care Loans, (4)
Nursing Student Loans, and the (5) Nurse Faculty Loan Program.Nursing Student Loans, and the (5) Nurse Faculty Loan Program.
1 These programs aim to, among These programs aim to, among
other purposes, assist students who are from low-income backgrounds with the costs of attending other purposes, assist students who are from low-income backgrounds with the costs of attending
health professional schools, to diversify the health workforce, and to increase the number of health professional schools, to diversify the health workforce, and to increase the number of
primary care physicians. primary care physicians.
As of July 31, 2019, approximately 81,800 HRSA loans, totaling $900
mil ion, were outstanding.1
For academic year 2022-2023, approximately 55,275 of these loans, together totaling approximately $723 million, were outstanding.2
Today, most federal student loans are made through the Today, most federal student loans are made through the
Wil iamWilliam D. Ford Direct Loan program, D. Ford Direct Loan program,
which is authorized under Title IV of the Higher Education Act of 1965 (HEA; P.L. 89-329, as which is authorized under Title IV of the Higher Education Act of 1965 (HEA; P.L. 89-329, as
amended) and administered by the Department of Education (ED).amended) and administered by the Department of Education (ED).
2 As of September 30, 2020, 3 As of March 31, 2025, approximately $1.approximately $1.
3 tril ion5 trillion in Direct Loan program loans, borrowed by or on behalf of in Direct Loan program loans, borrowed by or on behalf of
36 mil ion 38.2 million individuals, were outstanding.individuals, were outstanding.
34 Though HRSA Though HRSA
’'s programs are relatively s programs are relatively
smal small in the larger in the larger
context of federal student loans, they offer targeted assistance to health professional trainees and context of federal student loans, they offer targeted assistance to health professional trainees and
may provide incentives that differ from other loan programs (e.g., the ability to delay loan may provide incentives that differ from other loan programs (e.g., the ability to delay loan
repayment during required clinical training, such as internship and residency). repayment during required clinical training, such as internship and residency).
This report describes PHSA student loan programs, including borrower eligibility
This report describes PHSA student loan programs, including borrower eligibility
requirements, requirements,
loan terms and conditions, and administrative rules. It also briefly describes the Health Education loan terms and conditions, and administrative rules. It also briefly describes the Health Education
Assistance Loan (HEAL)Assistance Loan (HEAL)
program, a related student loan program authorized under the PHSA program, a related student loan program authorized under the PHSA
that was previously administered by HRSA and is now administered by ED. The report concludes that was previously administered by HRSA and is now administered by ED. The report concludes
with a tablewith a table
comparing these programs by borrower type, repayment terms, the number of comparing these programs by borrower type, repayment terms, the number of
participating schools, and the number and financial amount of outstanding loans.participating schools, and the number and financial amount of outstanding loans.
Loan Program Overview
PHSA
PHSA Titles VII and VIII authorize six student loan programs to help health profession students Titles VII and VIII authorize six student loan programs to help health profession students
finance the cost of their education. Five of these programs—hereinafter referred to as finance the cost of their education. Five of these programs—hereinafter referred to as
active
PHSA student loan programs—currently make loans available to borrowers and are administered —currently make loans available to borrowers and are administered
by HHSby HHS
’'s HRSA. These programs provide loans to target-specific health professions and s HRSA. These programs provide loans to target-specific health professions and
general ygenerally require that participants come from low-income or disadvantaged backgrounds. require that participants come from low-income or disadvantaged backgrounds.
45 The The
active PHSA student loan programs are as follows:active PHSA student loan programs are as follows:
Health Professions Student Loans (HPSL): available to individuals who are available to individuals who are
studying dentistry, optometry, pharmacy, podiatric, or veterinary medicine.
1 CRS Communication with U.S. Department of Health and Human Service, Health Resources and Serv ices Administration staff, June 4, 2020, and July 14, 2020.
2 For additional information on the Direct Loan program, see CRS Report R45931, Federal Student Loans Made
Through the William D. Ford Federal Direct Loan Program : Term s and Conditions for Borrowers. In addition, two other federal student loan programs are authorized under T itle IV of the HEA: the Federal Family Education Loan program and the Perkins Loan program. Loans are no longer being made un der these programs, but borrowers remain responsible for making payments on outstanding loans made under the programs. T he Direct Loan program makes up the majority of ED’s student loan portfolio—approximately 83% in terms of dollars outstanding and recipients. 3 Department of Education, Federal Student Aid, Federal Student Aid Data Center, “Federal Student Aid Portfolio Summary,” FY2020, Q4, https://studentaid.gov/sites/default/files/fsawg/datacenter/library/PortfolioSummary.xls. 4 For more information about school-based loan programs administered by the Department of Health and Human Service (HHS), see HHS, Health Resources and Services Administr ation (HRSA), “ School-Based Loans and Scholarships,” https://bhw.hrsa.gov/loans-scholarships/school-based-loans. For information about HRSA’s Nurse Faculty Loan Program, see HRSA, “Nurse Faculty Loan Program (NFLP) Administrative Guidelines” https://www.hrsa.gov/sites/default/files/hrsa/grants/faqs/NFLP-admin-guidelines-2017.pdf.
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Student Loan Programs Authorized by the Public Health Service Act: An Overview
studying dentistry, optometry, pharmacy, podiatric, or veterinary medicine.
Loans for Disadvantaged Students (LDS): available to individuals available to individuals
from from
disadvantaged backgrounds (as defined by the program) who are pursuing disadvantaged backgrounds (as defined by the program) who are pursuing
degrees in dentistry, optometry, pharmacy, degrees in dentistry, optometry, pharmacy,
al opathicallopathic, osteopathic, or veterinary , osteopathic, or veterinary
medicine.medicine.
Primary Care Loans (PCL): available to individuals available to individuals
who are studying who are studying
al opathicallopathic or osteopathic medicine. or osteopathic medicine.
Nursing Student Loans (NSL): available to individuals who are studying for an available to individuals who are studying for an
associate’associate's, bachelors, bachelor
’'s, or graduate degree in nursing.s, or graduate degree in nursing.
Nurse FacultyFaculty Loan Program (NFLP) (NFLP): available available
to individualsto individuals
who are post who are post
baccalaureate nursing students and who are interested in becoming nurse faculty. baccalaureate nursing students and who are interested in becoming nurse faculty.
These loans are These loans are
partial y cancel edpartially cancelled in exchange for serving as nurse faculty. in exchange for serving as nurse faculty.
As of July 31, 2019For academic year 2022-2023, approximately , approximately
81,80055,275 of these loans, of these loans,
totaling $900 mil ion, were
outstanding.5
together totaling approximately $723 million, were outstanding.6
The sixth program—the Health Education Assistance Loan (HEAL) Program—made loans The sixth program—the Health Education Assistance Loan (HEAL) Program—made loans
available available to eligibleto eligible
graduate students in schools of medicine, osteopathy, dentistry, veterinary graduate students in schools of medicine, osteopathy, dentistry, veterinary
medicine, optometry, podiatry, public health, pharmacy, and chiropractic, or in programs in health medicine, optometry, podiatry, public health, pharmacy, and chiropractic, or in programs in health
administration and clinical psychology. Although Congress terminated the authority to make new administration and clinical psychology. Although Congress terminated the authority to make new
HEAL HEAL Program loans after September 30, 1998,Program loans after September 30, 1998,
67 many HEAL program loans remain outstanding, many HEAL program loans remain outstanding,
and the federal government remains responsible for administering the program. HHS and the federal government remains responsible for administering the program. HHS
original y originally administered the HEALadministered the HEAL
program, but the Consolidated Appropriations Act, 2014 (P.L. 113-76), program, but the Consolidated Appropriations Act, 2014 (P.L. 113-76),
transferred administration of the program to ED. As of transferred administration of the program to ED. As of
November 15, 2017February 29, 2024, HEAL program loans , HEAL program loans
totaling approximately $totaling approximately $
187 mil ion, owed by 11,390421 million, owed by 6,500 individuals, were outstanding. individuals, were outstanding.
78
Active PHSA Loan Programs
As described above, As described above,
there are five active PHSAfive active PHSA
Loan programs (i.e., those that currently make Loan programs (i.e., those that currently make
loans availableloans available
to students)to students)
exist: the HPSL, LDS, PCL, and NSL programs, and the NFLP. School and : the HPSL, LDS, PCL, and NSL programs, and the NFLP. School and
student eligibilitystudent eligibility
requirements for requirements for
al all five programs share many attributes, so those requirements five programs share many attributes, so those requirements
are discussed together below. Loan terms and conditions for four of the programs—HPSL, LDS, are discussed together below. Loan terms and conditions for four of the programs—HPSL, LDS,
PCL, and NSL—are also similar. In addition, PCL, and NSL—are also similar. In addition,
al all four programs are operated as revolving loan four programs are operated as revolving loan
funds. Thereforefunds. Therefore
, those programs those programs
’' structures and loan terms and conditions are discussed structures and loan terms and conditions are discussed
collectively below. NFLP terms and conditions are discussed separately, because the intent of the collectively below. NFLP terms and conditions are discussed separately, because the intent of the
program is to provide loan program is to provide loan
cancel ationcancellation benefits to borrowers following a borrower benefits to borrowers following a borrower
’'s completion s completion
of service requirements; thusof service requirements; thus
, its loan terms and conditions vary somewhat from the other four its loan terms and conditions vary somewhat from the other four
programs. (The terms and conditions for this program appear in the programs. (The terms and conditions for this program appear in the
“"Nurse Faculty Loan Program Nurse Faculty Loan Program
(NFLP) Loan Terms and Conditions(NFLP) Loan Terms and Conditions
”" text box below.) text box below.)
For each of the active PHSA loan programs, the PHSA authorizes the
For each of the active PHSA loan programs, the PHSA authorizes the
al ocationallocation of federal funds of federal funds
(known as a federal capital contribution, or FCC) to eligible institutions to help them capitalize (known as a federal capital contribution, or FCC) to eligible institutions to help them capitalize
funds to make loans to students pursuing health profession education. For initial participation in funds to make loans to students pursuing health profession education. For initial participation in
the programs, institutions were required to contribute a matching institutional capital contribution the programs, institutions were required to contribute a matching institutional capital contribution
(ICC) equal to at least one-ninth of the FCC. With the exception of the NFLP, which holds (ICC) equal to at least one-ninth of the FCC. With the exception of the NFLP, which holds
5 CRS Communication with U.S. Department of Health and Human Service, Health Resources and Services Administration staff, June 4, 2020, and July 14, 2020.
6 42 U.S.C. §292a(a). 7 U.S. Department of Education, “Health Education Assistance Loan (HEAL) Program,” 82 Federal Register 53377, November 15, 2017.
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Student Loan Programs Authorized by the Public Health Service Act: An Overview
periodic competitions for grant funds, institutions participating in each of the active PHSAperiodic competitions for grant funds, institutions participating in each of the active PHSA
loan loan
programs provide new loans to students that are capitalized with funds repaid by students who programs provide new loans to students that are capitalized with funds repaid by students who
previously had borrowed loans made using FCC funds received in prior years and matching ICC previously had borrowed loans made using FCC funds received in prior years and matching ICC
funds. funds.
Specifical ySpecifically, in the HPSL, PCL, and NSL programs, FCCs were last awarded in FY1983 , in the HPSL, PCL, and NSL programs, FCCs were last awarded in FY1983
and some funds were and some funds were
real ocatedreallocated in 1986 from schools that returned their FCCs to HHS. For the in 1986 from schools that returned their FCCs to HHS. For the
LDS program, Congress repealed the authorization of appropriations for program funds effective LDS program, Congress repealed the authorization of appropriations for program funds effective
October 1, 2002, but schools with existing loan funds continue to make new loans to students October 1, 2002, but schools with existing loan funds continue to make new loans to students
with amounts repaid from prior loans.with amounts repaid from prior loans.
8
Initial y, 9
Initially, the FCCs had been the FCCs had been
al ocatedallocated using established regulatory criteria using established regulatory criteria
general ygenerally based on (1) based on (1)
the amount requested by the institutions, (2) HRSAthe amount requested by the institutions, (2) HRSA
’'s determination of the reasonableness of this s determination of the reasonableness of this
request, and (3) available funding. Today, institutions recapitalize their loan funds by depositing request, and (3) available funding. Today, institutions recapitalize their loan funds by depositing
the principal and interest repaid by borrowers, which enables institutions to make new loans to the principal and interest repaid by borrowers, which enables institutions to make new loans to
new borrowers.new borrowers.
Institutions make loans directly to students. Student eligibility criteria and loan terms and Institutions make loans directly to students. Student eligibility criteria and loan terms and
conditions are conditions are
general ygenerally prescribed in statute and regulations. Although HRSA oversees the prescribed in statute and regulations. Although HRSA oversees the
overal overall operation of the programs, institutions (i.e., schools) are responsible for the day-to-day operation of the programs, institutions (i.e., schools) are responsible for the day-to-day
administration of the programs, including loan servicing and collection activities, which are administration of the programs, including loan servicing and collection activities, which are
guided by statutory and regulatory requirements. In addition, institutions must engage in other guided by statutory and regulatory requirements. In addition, institutions must engage in other
required administrative activities, such as conducting entrance and exit interviews with required administrative activities, such as conducting entrance and exit interviews with
borrowers.9 borrowers.10
Truth in Lending Act Requirements
Among other requirements,Among other requirements,
the Truth in Lending Act (TILA) requiresthe Truth in Lending Act (TILA) requires
that certain lenders of private education that certain lenders of private education
loans discloseloans disclose
to borrowersto borrowers
a variety of information related to such loans at various points in the lending a variety of information related to such loans at various points in the lending
relationship (e.g.,relationship (e.g.,
contemporaneously with the consummation of a loan). In general, for contemporaneously with the consummation of a loan). In general, for
pu rposespurposes of TILA, a of TILA, a
private
education education loan is a loan not made under Higher Education Act of 1965 (HEA), Title IV; thus, TILA disclosure is a loan not made under Higher Education Act of 1965 (HEA), Title IV; thus, TILA disclosure
requirements requirements apply to schools that makeapply to schools that make
loans under the various active PHSA loan programsloans under the various active PHSA loan programs
and to HEAL and to HEAL
program lendersprogram lenders
(discussed below). Among other items,(discussed below). Among other items,
a lender must disclosea lender must disclose
the the
“"amount financedamount financed
”" (i.e., (i.e.,
the amount borrowed);the amount borrowed);
the “
the "finance charge,finance charge,
” “" "annual percentage rate,annual percentage rate,
”" and and
“"total of paymentstotal of payments
”" and a brief description of each term; and a brief description of each term;
the number, amounts, and timing of payments scheduled to repay the obligation;the number, amounts, and timing of payments scheduled to repay the obligation;
information about penalty charges that may be imposedinformation about penalty charges that may be imposed
for late payment; andfor late payment; and
a statement that the borrowera statement that the borrower
should refer to the promissoryshould refer to the promissory
note for information about nonpayment, note for information about nonpayment,
default, the right to acceleratedefault, the right to accelerate
the maturity of the obligation, and prepayment.the maturity of the obligation, and prepayment.
Sources: 15 U.S.C. 15 U.S.C.
§§1601-1651 and 12 C.F.R. §1026.18.§§1601-1651 and 12 C.F.R. §1026.18.
School Eligibility for Program Participation
In general, the school eligibilityIn general, the school eligibility
criteria for each of the PHSA student loan programs are similar; criteria for each of the PHSA student loan programs are similar;
however, criteria that advance program-specific goals differ from program to program. Although however, criteria that advance program-specific goals differ from program to program. Although
no new funding is being awarded to establish PHSA loan programs, participating schools must no new funding is being awarded to establish PHSA loan programs, participating schools must
stil still meet program criteria.
For all active the PHSA loan programs,11meet program criteria.
8 P.L. 105-392, §132. 9 During these interviews, schools must provide borrowers with information about their rights and responsibilities with respect to the loans, such as information on repayment plans, loan deferments, and the consequences of default. See, for example, 42 C.F.R. §57.210(b)(1).
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link to page 13 Student Loan Programs Authorized by the Public Health Service Act: An Overview
For al active the PHSA loan programs,10 eligible schools are public or private nonprofit eligible schools are public or private nonprofit
institutions located in a state.institutions located in a state.
1112 Foreign institutions are not eligible Foreign institutions are not eligible
for PHSA student loan for PHSA student loan
programs. Eligible schools must offer the relevant degree for the loan program in which they seek programs. Eligible schools must offer the relevant degree for the loan program in which they seek
to participate (e.g., it must be an to participate (e.g., it must be an
al opathicallopathic or osteopathic medical school to participate in the or osteopathic medical school to participate in the
PCL program). Schools must be accredited by the relevant accrediting organizations for the PCL program). Schools must be accredited by the relevant accrediting organizations for the
discipline for which they are offering a degree in (e.g., discipline for which they are offering a degree in (e.g.,
al opathicallopathic medical schools must be medical schools must be
accredited by the Liaison Committee on Medical Education).accredited by the Liaison Committee on Medical Education).
1213
In addition, schools must enter into a written agreement with the HHS Secretary in which the
In addition, schools must enter into a written agreement with the HHS Secretary in which the
institution agrees to a variety of program conditions, including that the institution institution agrees to a variety of program conditions, including that the institution
wil will establish establish
and maintain a student loan fund, and maintain a student loan fund,
that the fund the fund
wil will be used only to make student loans to eligible be used only to make student loans to eligible
borrowers or for the administrative costs associated with collections, borrowers or for the administrative costs associated with collections,
that the institution the institution
wil will inform borrowers of the loan terms and conditions, andinform borrowers of the loan terms and conditions, and
that the institution the institution
wil will submit an annual submit an annual
operating report that describes the fundoperating report that describes the fund
’'s uses.s uses.
Each active PHSA loan program requires that a participating schoolEach active PHSA loan program requires that a participating school
’'s default rate for the program s default rate for the program
may not exceed 5%. The formula to calculate the default rate is shown in the text bow below.not exceed 5%. The formula to calculate the default rate is shown in the text bow below.
13
14 (For additional information, see (For additional information, see
“Default” section.) the "Default" section.)
School Default Rate
Defaulted principal amount outstandingDefaulted principal amount outstanding
divided by
Matured loansMatured loans
Notes: Defaulted principal amount outstanding means the total amount ever borrowed from a school’s loan fund that has entered repayment (but excluding any principal amount that has been repaid or cancel ed) and that has been in a default (i.e., a borrower has failed to make a payment when due or otherwise failed to comply with the terms for the loans promissory note) for at least 120 days. Matured loans means the total principal amount of loans ever made by a school,
excluding the total principal amount of loans made by a school to students are who enrol ed in a ful -time course of study at the school or who are in their grace period.
In general, schools that exceed the 5% threshold must reduce their default rate by 50% by the In general, schools that exceed the 5% threshold must reduce their default rate by 50% by the
close of the following six-month period.close of the following six-month period.
1415 After the six-month period, schools that After the six-month period, schools that
stil still exceed the exceed the
5% threshold must reduce the default rate by 50% for each six-month period that it exceeds 5% 5% threshold must reduce the default rate by 50% for each six-month period that it exceeds 5%
until the rate reaches 5%. until the rate reaches 5%.
General yGenerally, schools that fail to meet these standards may not receive new , schools that fail to meet these standards may not receive new
program funding. However, in recent years this has not served as program funding. However, in recent years this has not served as
much of aa meaningful sanction because, sanction because,
with the exception of the NFLP, PHSA loan programs are not awarding new funding to schools. with the exception of the NFLP, PHSA loan programs are not awarding new funding to schools.
Schools that do not meet the default rate standards are prohibited from making new loans and are 10 Specific statutory sections are PHSA Section 799 (42 U.S.C. §295o -1), which sets criteria for eligible institutions; Section 721 (42 U.S.C. §292q), which lays out provisions for the loan fund agreements and the conditions that schools must agree when administering the fund; and Section 835 (42 U.S.C. §297a), which specifies criteria for the Nursing Student Loan program.
11 T he term state includes District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, and the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia. 42 C.F.R. §§57.202 and 57.302. 12 For additional information on accreditation, see CRS Report R43826, An Overview of Accreditation of Higher
Education in the United States.
13 HHS, HRSA, “Application to Participate in the Health Professions Student Loans (HPSL) Program” https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/hpsl-application.pdf, p. 6.
14 Schools with a default rate above 5%, but below 10%, must reduce the default rate to the 5% threshold within six months.
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Student Loan Programs Authorized by the Public Health Service Act: An Overview
Schools that do not meet the default rate standards are prohibited from making new loans and are required to maintain existing funds, and any funds received, in an interest-bearing account. required to maintain existing funds, and any funds received, in an interest-bearing account.
Schools that do not meet the default rate standards may be subject to termination from the Schools that do not meet the default rate standards may be subject to termination from the
program, which would terminate their ability to make new loans and would require them to return program, which would terminate their ability to make new loans and would require them to return
FCC funds to the federal government.FCC funds to the federal government.
1516
Schools that administer PCL and LDS funds must meet additional criteria beyond general
Schools that administer PCL and LDS funds must meet additional criteria beyond general
program eligibility.program eligibility.
To be eligibleTo be eligible
for PCL program funds, schools must meet one of several for PCL program funds, schools must meet one of several
specified criteria demonstrating that the school has a record of students practicing primary care.specified criteria demonstrating that the school has a record of students practicing primary care.
16 17 Schools that do not comply with these criteria are subject to penalties requiring them to return a Schools that do not comply with these criteria are subject to penalties requiring them to return a
portion of their PCL fund incomes. Schools participating in the LDS program must meet specified portion of their PCL fund incomes. Schools participating in the LDS program must meet specified
criteria demonstrating a record of recruiting and retaining disadvantaged students and minority criteria demonstrating a record of recruiting and retaining disadvantaged students and minority
faculty, providing instruction on minority health issues, having arrangements with clinics that faculty, providing instruction on minority health issues, having arrangements with clinics that
serve individuals from disadvantaged backgrounds, having linkages with specified minority-serve individuals from disadvantaged backgrounds, having linkages with specified minority-
serving institutions, and offering mentoring programs to help individuals from disadvantaged serving institutions, and offering mentoring programs to help individuals from disadvantaged
backgrounds obtain health professions degrees.backgrounds obtain health professions degrees.
1718 Schools that fail to meet these criteria may or Schools that fail to meet these criteria may or
may not face consequences affecting their program participation.may not face consequences affecting their program participation.
Student Eligibility for Receiving Loans
To be eligibleTo be eligible
for any of the active PHSA student loan programs, borrowers must be U.S. citizens, for any of the active PHSA student loan programs, borrowers must be U.S. citizens,
nationals, or lawful permanent residents. In general, students must be accepted to or nationals, or lawful permanent residents. In general, students must be accepted to or
enrol edenrolled full- full-
time in an eligibletime in an eligible
institution (e.g., public or nonprofit institution) and in an eligibleinstitution (e.g., public or nonprofit institution) and in an eligible
health health
profession educational program, as determined by the specific loan program (e.g., a nursing profession educational program, as determined by the specific loan program (e.g., a nursing
student for the NSL program). Only the NSL program loans are availablestudent for the NSL program). Only the NSL program loans are available
to students enrolled on to students enrolled on
a half-time basis.a half-time basis.
19 PHSA student loan program funds are primarily intended to support students PHSA student loan program funds are primarily intended to support students
pursuing professional degrees. Therefore, PHSA funds are pursuing professional degrees. Therefore, PHSA funds are
general y available generally available only to students only to students
who have already obtained a bachelorwho have already obtained a bachelor
’'s degree. However, there are some exceptions to this: (1) s degree. However, there are some exceptions to this: (1)
HPSL and LDS program loans may be used to support borrowers pursuing a bachelorHPSL and LDS program loans may be used to support borrowers pursuing a bachelor
’'s of s of
pharmacy degree and (2) NSL program loans may be used to obtain an associatepharmacy degree and (2) NSL program loans may be used to obtain an associate
’'s or bachelors or bachelor
’s
's degree in nursing.degree in nursing.
Al 20 All PHSA loan programs require students to be in good academic standing to PHSA loan programs require students to be in good academic standing to
remain eligibleremain eligible
for student loan funds.for student loan funds.
With the exception of the NFLP, active PHSA student loan programs require that students With the exception of the NFLP, active PHSA student loan programs require that students
demonstrate having financial need to be eligibledemonstrate having financial need to be eligible
for funds.for funds.
21 Financial need is determined by taking Financial need is determined by taking
into account the financial resources available to a student and the studentinto account the financial resources available to a student and the student
’'s s
cost of attendance——
the costs reasonably necessary for the student to attend the school, including tuition and the costs reasonably necessary for the student to attend the school, including tuition and
reasonable livingreasonable living
costs.costs.
1822 When determining the financial resources available to a student, a When determining the financial resources available to a student, a
school must use, in combination with other available information about the studentschool must use, in combination with other available information about the student
’'s financial s financial
status, the expected family contribution (EFC) calculated according to need analysis formulas
15 42 C.F.R. §57.216a. 16 For example, HHS, HRSA, “Application to Participate in the Primary Care Loan (PCL) Program,” https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/pcl-application.pdf, p. 4-5. 17 For example, HHS, HRSA, “Application Loans for Disadvantaged Students (LDS) Program, Academic Year” https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/lds-application.pdf, pp. 10-11.
18 In general, institutions participating in the programs have discretion in setting their costs of attendance. HRSA has indicated that using the HEA T itle IV requirements for developing costs of attendance “is an appropriate approach.” See, for example, HHS, HRSA, “ST UDENT FINANCIAL AID GUIDELINES, HEALT H PROFESSIONS PROGRAMS, Health Professions Student Loan Program (HPSL) ,” December 2011, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/hpsl-financial-aid-guidelines.pdf, p. 15.
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status, the expected family contribution (EFC) calculated according to need analysis formulas specified under Title IV-F of the HEA.specified under Title IV-F of the HEA.
1923 In general, schools must collect and assess parents In general, schools must collect and assess parents
’ ' financial information even if a student is considered independent for financial aid purposes under financial information even if a student is considered independent for financial aid purposes under
the HEA.the HEA.
2024 Students who do not provide parents Students who do not provide parents
’' financial information are ineligible financial information are ineligible
for PHSA for PHSA
loan programs. Under the PCL program, however, schools are permitted, but not obligated, to loan programs. Under the PCL program, however, schools are permitted, but not obligated, to
require that independent require that independent
students21students provide parental financial information. provide parental financial information.
2225
With the exception of the NFLP, students are required to register for selective service (if
With the exception of the NFLP, students are required to register for selective service (if
applicable) to be eligibleapplicable) to be eligible
for loans under the PHSA loan programs.for loans under the PHSA loan programs.
2326 Although the programs do Although the programs do
not prohibit schools from making loans to students who have defaulted on other federal student not prohibit schools from making loans to students who have defaulted on other federal student
loans (e.g., those made under the HEA), HRSA suggests that schools establish such a policy to loans (e.g., those made under the HEA), HRSA suggests that schools establish such a policy to
more thoroughly vet students in default before awarding PHSA student loan funds.more thoroughly vet students in default before awarding PHSA student loan funds.
2427
In general, individuals
In general, individuals
may borrow loan amounts for up to the cost of attendance for each year of may borrow loan amounts for up to the cost of attendance for each year of
attendance at an eligibleattendance at an eligible
school. There are no aggregate loan limits for loans made through the school. There are no aggregate loan limits for loans made through the
Title VII PHSA programs (PCL, LDS, and HPSL). Loan amounts may be made for up to the cost Title VII PHSA programs (PCL, LDS, and HPSL). Loan amounts may be made for up to the cost
of attendance; however, for the third and fourth years of medical school, under the LDS and PCL of attendance; however, for the third and fourth years of medical school, under the LDS and PCL
programs, loan amounts may exceed the cost of attendance.programs, loan amounts may exceed the cost of attendance.
28 These extra amounts must be used to These extra amounts must be used to
pay down previously borrowed student loans that were used to finance health professional pay down previously borrowed student loans that were used to finance health professional
education under programs other than the PCL, LDS, and HPSL programs.education under programs other than the PCL, LDS, and HPSL programs.
25 This al owance 29 This allowance effectively enables students to refinance a portion of their outstanding student loan debt. Loans effectively enables students to refinance a portion of their outstanding student loan debt. Loans
made under the Title VIII nursing programs are subject to annual and aggregate limits. Students made under the Title VIII nursing programs are subject to annual and aggregate limits. Students
may not borrow more than $3,300 per year in initial periods of study under the NSL program, may not borrow more than $3,300 per year in initial periods of study under the NSL program,
although students may borrow up to $5,200 per year in the last two years of study. Individuals although students may borrow up to $5,200 per year in the last two years of study. Individuals
participating in the NSL program may not borrow an aggregate amount that exceeds $17,000.participating in the NSL program may not borrow an aggregate amount that exceeds $17,000.
26
30 For NFLP, HRSAFor NFLP, HRSA
sets an annual loan limit of $sets an annual loan limit of $
35,50040,000 per student for any academic year but does per student for any academic year but does
not specify an aggregate limit.not specify an aggregate limit.
2731 Statute specifies that NFLP annual loan amounts may be adjusted Statute specifies that NFLP annual loan amounts may be adjusted
to reflect the cost of pursuing an advanced nursing education.28
19 For additional information on the need analysis formula, see CRS Report R44503, Federal Student Aid: Need
Analysis Form ulas and Expected Fam ily Contribution. T he FAFSA Simplification Act (Division FF, T itle VII of the Consolidated Appropriations Act, 2021 [P.L. 116-59]) amended HEA T itle IV-F by creating a student aid index to replace the expected family contribution. T he act made additional changes to the need analysis formulas specified in the HEA. In general, changes made by the FAFSA Simplification Act will not go into effect until July 1 , 2023. 20 Under the HEA, independent students include (but are not limited to) students who are 24 years of age or older by December 31 of the award year and graduate and professional students. HEA §480(d) (20 U.S.C. §1087vv(d)).
21 For the PCL program, an independent student is a student who is at least 24 years of age and can prove that he or she has been independent for a minimum of 3 years.
22 HHS, HRSA, “ST UDENT FINANCIAL AID GUIDELINES, HEALT H PROFESSIONS PROGRAMS, Primary Care Loans,” December 2011, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/PCL-student-financial-aid-guidelines.pdf, p. 35. 23 For information on the Selective Service, see CRS Report R44452, The Selective Service System and Draft
Registration: Issues for Congress.
24 See, for example, HHS, HRSA, “ST UDENT FINANCIAL AID GUIDELINES, HEALT H PROFESSIONS PROGRAMS, Primary Care Loans,” December 2011, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/PCL-student -financial-aid-guidelines.pdf, p. 37. 25 It does not appear that there are other restrictions on the type of previously borrowed student loan debt that may be paid down with LDS and PCL program loans.
26 42 U.S.C. §297b. 27 HHS, HRSA, “Nurse Faculty Loan Program (NFLP): HRSA-20-004,” https://grants.hrsa.gov/2010/Web2External/Interface/Common/EHBDisplayAttachment.aspx?dm_rtc=16&dm_attid=b631c79e-c7a8-4a3b-b28c-4b1587f5126c. 28 42 U.S.C. §297n-1(c)(2).
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Student Loan Programs Authorized by the Public Health Service Act: An Overview
to reflect the cost of pursuing an advanced nursing education.32
HPSL, LDS, PCL, and NSL Loan Terms and Conditions
As discussed below, the loan terms and conditions for the HPSL, LDS, PCL, and NSL are similar. As discussed below, the loan terms and conditions for the HPSL, LDS, PCL, and NSL are similar.
(The NFLP is discussed separately in the text box below because that program(The NFLP is discussed separately in the text box below because that program
’'s loan terms and s loan terms and
conditions vary from the other four programs, given the NFLPconditions vary from the other four programs, given the NFLP
’'s intent to provide loan s intent to provide loan
cancel ationcancellation benefits to borrowers in exchange for serving as nurse faculty at an accredited benefits to borrowers in exchange for serving as nurse faculty at an accredited
nursing school.) Unless otherwise specified, the information in this section applies to each active nursing school.) Unless otherwise specified, the information in this section applies to each active
PHSA loan program except the NFLP.PHSA loan program except the NFLP.
Nurse Faculty Loan Program (NFLP) Loan Terms and Conditions
HRSA’s
HRSA's NFLP provides competitiveNFLP provides competitive
discretionary discretionary grant awards to nursing schools to operate a loan fund. Unlike grant awards to nursing schools to operate a loan fund. Unlike
the other PHSA school-based loan programs,the other PHSA school-based loan programs,
which have a revolvingwhich have a revolving
fund where new loans are made from repaid fund where new loans are made from repaid
loans, the NFLP worksloans, the NFLP works
by cancel ing by cancelling up to 85% of outstanding loans in exchange for borrowers up to 85% of outstanding loans in exchange for borrowers
’ ' four-year service four-year service
as nurse faculty membersas nurse faculty members
at accredited nursing schools.at accredited nursing schools.
Because repaid loan amounts may be insufficient to make Because repaid loan amounts may be insufficient to make
new loan awards from an institutionnew loan awards from an institution
’'s loan fund, additional funding is required fors loan fund, additional funding is required for
the institutional loan fund to the institutional loan fund to
remain remain operational. The NFLP was created because experts had identified nurse faculty shortages as a key factor operational. The NFLP was created because experts had identified nurse faculty shortages as a key factor
limiting limiting the rate at which new nursesthe rate at which new nurses
could be recruited to avert a predicted nursing shortage. could be recruited to avert a predicted nursing shortage.
HRSA reports that 211 schools maintain loan fund accounts.
The awarding of grants has not been consistent over the years; grants have been awarded in someThe awarding of grants has not been consistent over the years; grants have been awarded in some
years but not in years but not in
others. Most recently, in FY2020, one-year awards were made to approximately 81 schools, some of which were to continue existing programs. To receive funds (either new or continuing), schools must provide HRSA with information on how they intend to use the funds, including their plans to use al funds within 18 months. NFLP loans are available to advanced nursing students (i.e., doctoral level, master’s level, or combined bachelor’s and master’s program students) who agree to serve as nursing faculty. In exchange for a recipient’s service as a nurse faculty member, the awarding school cancels up to 85% of the principal and interest others. In FY2025, applicant schools, among other criteria, were required to provide HRSA with information on how they intend to use the funds. Funds were to be awarded among all eligible schools based on a formula that takes into account factors such as educational program costs, total number of students requested for support, and the school's default rate percentage. PHSA Section 846A requires schools to make Institutional Capital Contributions to their fund, which are to be equal to not less than one-ninth of the Federal Capital Contribution.
NFLP loans are available to advanced nursing students (i.e., doctoral level, master's level, or combined bachelor's and master's program students) who agree to serve as nursing faculty. In exchange for a recipient's service as a nurse faculty member, the awarding school cancels up to 85% of the principal and interest of an NFLP loan over a of an NFLP loan over a
four-year period,four-year period,
with 20% with 20%
cancel edcancelled during each of the first, second, and third years of service. during each of the first, second, and third years of service.
After the After the
borrower completes borrower completes a fourth year of service,a fourth year of service,
the school cancels 25% of the principal of and interest on the NFLP the school cancels 25% of the principal of and interest on the NFLP
loan. Any portion of the loan not loan. Any portion of the loan not
cancel edcancelled (i.e., (i.e.,
the remaining 15%) must be repaid beginning after the four-year the remaining 15%) must be repaid beginning after the four-year
service service period has ended. In general, NFLP loans have an annual interest rate of 3%, which begins accruing three period has ended. In general, NFLP loans have an annual interest rate of 3%, which begins accruing three
months after a borrowermonths after a borrower
ceases pursuing a courseceases pursuing a course
of study at a school of nursing. Aof study at a school of nursing. A
9-month grace period begins 9-month grace period begins
immediately immediately after a borrowerafter a borrower
ceases to pursue a course of study at a nursing school. During this grace period, a ceases to pursue a course of study at a nursing school. During this grace period, a
borrower borrower is not required to make loan payments, but interestis not required to make loan payments, but interest
accrues during the final six months). In addition, a accrues during the final six months). In addition, a
borrower is al owedborrower is allowed an additional three-month grace period (beyond the initial nine-month grace period) to an additional three-month grace period (beyond the initial nine-month grace period) to
obtain employment obtain employment
fol owing following graduation. For borrowersgraduation. For borrowers
who fail to complete their program of study, do not who fail to complete their program of study, do not
obtain employment as nurse faculty within 12 months of graduation, or do not serveobtain employment as nurse faculty within 12 months of graduation, or do not serve
the ful the full four-year period, the four-year period, the
interest rate on NFLP loans changes frominterest rate on NFLP loans changes from
3% to the prevailing market3% to the prevailing market
rate, which is adjusted rate, which is adjusted
annual yannually. The . The
prevailing marketprevailing market
rate is determinedrate is determined
by the Treasury Department after considering private consumerby the Treasury Department after considering private consumer
rates of rates of
interest and is published quarterly in the interest and is published quarterly in the
Federal Register. For example,. For example,
for January-March 2021 for April to June 2025, the prevailing , the prevailing
interest rate interest rate
is 9 5/8%. was 11.625%.
NFLP loans are repayable in equal or graduated NFLP loans are repayable in equal or graduated
instal ments, installments, in accordance with the agreement made between the in accordance with the agreement made between the
borrower borrower and the school.and the school.
The repayment period for an NFLPThe repayment period for an NFLP
loan is 10 years.loan is 10 years.
This termThis term
applies to borrowers applies to borrowers
who have completed their servicewho have completed their service
commitment commitment and are repaying their remainingand are repaying their remaining
loan balance. Borrowersloan balance. Borrowers
may may
prepay prepay
al all or part of the loan. Loans may be deferredor part of the loan. Loans may be deferred
for up to three years while a borrowerfor up to three years while a borrower
is performing active is performing active
duty serviceduty service
as a memberas a member
of the uniformed serviceof the uniformed service
or or serving as a Peace Corps volunteer. Loans may be deferred serving as a Peace Corps volunteer. Loans may be deferred
for up to 10 years whilefor up to 10 years while
a borrowera borrower
is pursuing a graduate nursing degree on at least a half-time basis or is is pursuing a graduate nursing degree on at least a half-time basis or is
otherwise otherwise pursuing advanced professional training in nursing (e.g., a post-doctoral pursuing advanced professional training in nursing (e.g., a post-doctoral
fel owship). fellowship). In addition, an In addition, an
institution may place a borrowerinstitution may place a borrower
’s 's loan in forbearance when loan in forbearance when
“"extraordinary circumstancesextraordinary circumstances
affect loan repayment.affect loan repayment.
” " Neither statute, regulations, nor guidance specify consequences of default for individual borrowers,Neither statute, regulations, nor guidance specify consequences of default for individual borrowers,
nor when nor when
default is considered to have occurred for such purposes.default is considered to have occurred for such purposes.
As with the other PHSA loan programs,As with the other PHSA loan programs,
an NFLP loan may be an NFLP loan may be
cancel edcancelled if the borrower if the borrower
dies or becomesdies or becomes
total y totally and permanently disabled. and permanently disabled.
Final y, eligible borrowers Finally, eligible borrowers may consolidate their NFLP loans into a Direct Loan program may consolidate their NFLP loans into a Direct Loan program
Consolidation Loan.Consolidation Loan.
Sources::
HHS, HRSA,HHS, HRSA,
“ "Notice of Funding Opportunity: Nurse Faculty Loan ProgramNurse Faculty Loan Program
(NFLP): HRSA-20-004,” https://www.hrsa.gov/grants/find-funding/hrsa-20-004; HHS, HRSA, “ (NFLP): Opportunity number: HRSA-25-070," available for download at https://grants.gov/search-results-detail/355774. HHS, HRSA, "Nurse Faculty Loan Program (NFLP) AdministrativeNurse Faculty Loan Program (NFLP) Administrative
Guidelines,Guidelines,
” September 6, 2017, https://www" amended 2022, https://bhw.hrsa.gov/sites/default/files/.hrsa.gov/sites/default/files/
hrsa/grants/faqs/NFLP-admin-guidelines-2017.pdf; and HHS, “bureau-health-workforce/funding/nflp-admin-guidelines.pdf; HHS, HRSA, and HHS, "Interest Interest
Rates on Overdue and Delinquent Debts,Rates on Overdue and Delinquent Debts,
” " https://www.hhs.gov/about/agencies/asfr/finance/financial-policy-library/https://www.hhs.gov/about/agencies/asfr/finance/financial-policy-library/
interest-rates/interest-rates/
index.html, accessed May 30, 2025.
Interest Rate
PHSA loans generally index.html, accessed March 2, 2021.
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Interest Rate
PHSA loans general y incur an interest rate of 5% if they were borrowed after November 4, incur an interest rate of 5% if they were borrowed after November 4,
1988.1988.
2933 Under the PCL program, borrowers must practice primary care for a minimum of 10 years Under the PCL program, borrowers must practice primary care for a minimum of 10 years
or until the loan is repaid, whichever comes first.or until the loan is repaid, whichever comes first.
3034 Failure to meet the primary care service Failure to meet the primary care service
requirement results in an increased interest rate, depending on when the loan was borrowed. For requirement results in an increased interest rate, depending on when the loan was borrowed. For
loans made prior to November 13, 1998, the interest rate increases to 12%.loans made prior to November 13, 1998, the interest rate increases to 12%.
3135 For loans made on For loans made on
or after November 13, 1998, and before March 23, 2010, the interest rate increases to 18%. For or after November 13, 1998, and before March 23, 2010, the interest rate increases to 18%. For
loans made after March 23, 2010, the interest rate increases by 2 percentage points (i.e., to 7%).loans made after March 23, 2010, the interest rate increases by 2 percentage points (i.e., to 7%).
32
36 Interest does not begin to accrue on PHSA loans until the expiration of the grace period.Interest does not begin to accrue on PHSA loans until the expiration of the grace period.
Grace Period
The grace period, during which repayment of principal is not required and interest does not The grace period, during which repayment of principal is not required and interest does not
accrue, is one year for HPSL, LDS, PCL program loans, and nine months for NSL program loans. accrue, is one year for HPSL, LDS, PCL program loans, and nine months for NSL program loans.
The grace period begins immediately after a borrower first ceases to be enrolled on a full-time The grace period begins immediately after a borrower first ceases to be enrolled on a full-time
basis in a health professions program, or ceases to be enrolled on at least a half-time basis for basis in a health professions program, or ceases to be enrolled on at least a half-time basis for
NSL.NSL.
3337 The grace period cannot be postponed to follow any deferments (e.g., a deferment for The grace period cannot be postponed to follow any deferments (e.g., a deferment for
clinical training). As such, the grace period encompasses the first year of residency/advanced clinical training). As such, the grace period encompasses the first year of residency/advanced
clinical training or the first nine months of advanced clinical training for nurses.clinical training or the first nine months of advanced clinical training for nurses.
Repayment
|
COVID-19 PHSA Loan Repayment Flexibilities
In light of the COVID-19 public health emergency, HRSA authorized some additional student loan benefits for HPSL, PCL, LDS, and NSL program loans. From March 13, 2020, through August 31, 2023, HRSA - waived the accrual of interest on these loans and
- authorized an administrative forbearance during which borrowers were not required to make payments on these loans and that did not count against a borrower's maximum repayment period.
Participating schools were not required to repay HRSA or absorb any portion of the interest waived. On September 1, 2023, interest accrual and payments resumed.
Source: HHS, HRSA, "FAQ: School Loan Programs," https://bhw.hrsa.gov/funding/faq-school-loan-program, accessed October 18, 2024.
|
Borrowers are required to make payments on their loans during a repayment period that begins immediately after the grace period or after any permissible deferments. Payments must be made no less often than quarterly and may be made in equal or graduated installments in accordance with a repayment schedule made between the borrower and the school.38 Borrowers who are more than 60 days late with a payment must be placed on a monthly repayment schedule.
Monthly installments must be at least $40 per month, and a school may not agree to a payment schedule that does not require at least a quarterly payment of principal and accrued interest. In general, repayment periods must be not less than 10 years, but not more than 25 years.39 The repayment period for the NSL program is 10 years.40
Repayment
Borrowers are required to make payments on their loans during a repayment period that begins immediately after the grace period or after any permissible deferments. Payments must be made no less often than quarterly and may be made in equal or graduated instal ments in accordance with a repayment schedule34 made between the borrower and the school. Borrowers who are more
than 60 days late with a payment must be placed on a monthly repayment schedule.
Monthly instal ments must be at least $40 per month, and a school may not agree to a payment schedule that does not require at least a quarterly payment of principal and accrued interest. In 29 Different interest rates apply to PHSA loans made prior to November 5, 1988, depending on the date of disbursement.
30 Individuals who received a loan prior to March 23, 2010, must practice primary care until the loan is repaid. T hese changes are described in CRS Report R41278, Public Health, Workforce, Quality, and Rela ted Provisions in ACA:
Sum m ary and Tim eline. 31 Schools were also required to recalculate the balance due on the loan from the date of disbursement at an interest rate of 12% and compounded annually, for which borrowers would be responsible for repaying. HHS, HRSA, “Student Financial Aid Guidelines, Health Professions Programs, Primary Care Loan Program,” December 2011, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/PCL-student -financial-aid-guidelines.pdf.
32 42 U.S.C. §297s(a)(3). T he Servicemembers Civil Relief Act caps the maximum interest charged on any debt incurred by a member of the armed forces and the commissioned corps of the National Oceanic Atmospheric Administration and the Public Health Service prior to entering active duty service at no higher than 6% per year for the duration of their active duty service, if their ability to pay is materially affected by active -duty status. T he cap is not automatic and must be requested by the servicemember. For additional information, see CRS Report R45283, The
Servicem em bers Civil Relief Act (SCRA): Section -by-Section Sum mary.
33 HHS, HRSA, “Student Financial Aid Guidelines, Health Professions Programs,” “Nursing Student Loan Program,” June 2017, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/nsl-financial-aid-guidelines.pdf, p. 24.
34 A repayment schedule is the schedule by which borrowers are required to make loan payments. It includes a due date for each payment, t he amount credited to principal and interest from each payment, and any minimum payment amounts that may be required.
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general, repayment periods must be not less than 10 years, but not more than 25 years.35 The repayment period for the NSL program is 10 years.36 With the exception of the NSL program, With the exception of the NSL program,
schools are instructed to determine the appropriate repayment period based on a borrowerschools are instructed to determine the appropriate repayment period based on a borrower
’'s loan s loan
amounts and projected income. However, schools must attempt to maximize the amount of funds amounts and projected income. However, schools must attempt to maximize the amount of funds
available available for revolving student loan funds while attempting to provide borrowers with flexibility for revolving student loan funds while attempting to provide borrowers with flexibility
to repay their loans.to repay their loans.
3741
A borrower may, at his or her option and without penalty, prepay
A borrower may, at his or her option and without penalty, prepay
al all or any part of the principal or any part of the principal
and accrued interest at any time. The and accrued interest at any time. The
prepayment must first be applied to accrued interest and must first be applied to accrued interest and
penalties, if any, and then to the principal balance.penalties, if any, and then to the principal balance.
Borrowers who are having difficulty making payments may receive a loan deferment or Borrowers who are having difficulty making payments may receive a loan deferment or
forbearance. A forbearance. A
deferment is a temporary period during which a borroweris a temporary period during which a borrower
’'s obligation to make s obligation to make
regular payments of principal and interest is suspended. During deferment periods, interest does regular payments of principal and interest is suspended. During deferment periods, interest does
not accrue. For each loan type, deferment may be granted in the following circumstances:not accrue. For each loan type, deferment may be granted in the following circumstances:
up to three years for active duty in the uniformed services;up to three years for active duty in the uniformed services;
38 42
up to three years for service as a Peace Corps volunteer;up to three years for service as a Peace Corps volunteer;
39 43
while pursuing advanced professional training (e.g., residency or while pursuing advanced professional training (e.g., residency or
fel owship);40 fellowship);44
up to two years for a leave of absence from a school to pursue related educational up to two years for a leave of absence from a school to pursue related educational
activity;41 and
activity;45 and
up to two years for training up to two years for training
fel owshipsfellowships, training programs, and related , training programs, and related
educational activities for graduates of a health professional school.educational activities for graduates of a health professional school.
For the NSL program, loans may be deferred for up to 10 years during the time in which a For the NSL program, loans may be deferred for up to 10 years during the time in which a
borrower is enrolled on at least a half-time basis in a collegiate nursing program leading to a borrower is enrolled on at least a half-time basis in a collegiate nursing program leading to a
baccalaureate degree in nursing or a graduate degree in nursing or training to become a nurse baccalaureate degree in nursing or a graduate degree in nursing or training to become a nurse
anesthetist.anesthetist.
46 NSL program loans may be used to pursue associate NSL program loans may be used to pursue associate
’'s, bachelors, bachelor
’'s, and masters, and master
’'s level s level
nursing training. As such, this deferment permits individuals who received support for a prior nursing training. As such, this deferment permits individuals who received support for a prior
degree to receive additionaldegree to receive additional
support to advance in the nursing career ladder, provided that such support to advance in the nursing career ladder, provided that such
deferments do not exceed 10 years.
35 Deferment periods are excluded from the 25-year limit. 36 HHS, HRSA, “Student Financial Aid Guidelines, Health Professions Programs,” “Nursing Student Loan Program,” June 2017, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/nsl-financial-aid-guidelines.pdf, p. 31. 37 See HHS, HRSA, “Student Financial Aid Guidelines, Health Professions Programs, Primary Care Loan Program (PCL),” December 2011, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/PCL-student-financial-aid-guidelines.pdf, p. 72.
38 Uniformed services includes active duty service in the Army, Navy, Air Force, Marine Corps, Coast Guard, National Oceanic Atmospheric Administration, and the Public Health Service. See, for example, 42 C.F.R. § 57.210(a)(2).
39 Service in Volunteers in Service to America (VIST A) volunteer does not qualify for deferment. 40 Clinical training at a foreign institution may qualify a borrower for deferment, although foreign institutions themselves are not eligible to participate in these programs. Foreign clinical training would qualify an individual for a deferment if such training counts for purposes of licensure or board certification where applicable. Schools are permitted to determine if such training is eligible for forbearance.
41 T his educational activity must be through a joint -degree program that is related to the original degree for which the borrower is receiving support. While the educational program may exceed two years, PHSA loans may only be deferred for two years for a related degree.
Congressional Research Service
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Student Loan Programs Authorized by the Public Health Service Act: An Overview
deferments do not exceed 10 years.
PHSA student loans may be placed in PHSA student loans may be placed in
forbearance, during which a borrower, during which a borrower
’'s obligation to make s obligation to make
payments on a loanpayments on a loan
’'s principal is temporarily suspended but interest continues to accrue.s principal is temporarily suspended but interest continues to accrue.
4247 During During
forbearance, a borrower must make a minimum payment on the interest that continues to accrue. forbearance, a borrower must make a minimum payment on the interest that continues to accrue.
An institution may grant a borrower forbearance when extraordinary circumstances exist.An institution may grant a borrower forbearance when extraordinary circumstances exist.
43 48 Examples of extraordinary circumstances include unemployment, poor health, or other short-term Examples of extraordinary circumstances include unemployment, poor health, or other short-term
personal problems that temporarily curtail a borrowerpersonal problems that temporarily curtail a borrower
’'s ability to make scheduled payments. s ability to make scheduled payments.
HRSA guidance urges schools to minimize the use of forbearance to lessen the potential burden HRSA guidance urges schools to minimize the use of forbearance to lessen the potential burden
for borrowers because of a reduced payment schedule.for borrowers because of a reduced payment schedule.
4449 Borrowers must request forbearance, and Borrowers must request forbearance, and
institutions have discretion in whether to grant it. HRSA requires that institutions institutions have discretion in whether to grant it. HRSA requires that institutions
annual yannually obtain obtain
documentation that supports a borrowerdocumentation that supports a borrower
’'s request for forbearance.s request for forbearance.
In addition, HRSA permits institutions to In addition, HRSA permits institutions to
renegotiate a borrowera borrower
’'s repayment schedule when the s repayment schedule when the
borrower is able to make regular payments but is unable to pay the amount needed to keep the borrower is able to make regular payments but is unable to pay the amount needed to keep the
account current. The institution and borrower must agree on a new repayment schedule; however, account current. The institution and borrower must agree on a new repayment schedule; however,
the new schedule does not supersede the requirement to repay the loan within the established the new schedule does not supersede the requirement to repay the loan within the established
program time periods (e.g., 25 years for PCL and 10 years for NSL).program time periods (e.g., 25 years for PCL and 10 years for NSL).
45
Final y, 50
Finally, with the exception of PCLs,with the exception of PCLs,
4651 eligible eligible
borrowers may consolidate their PHSA program borrowers may consolidate their PHSA program
loans into a Direct Loan program Consolidation Loan.loans into a Direct Loan program Consolidation Loan.
47 Consolidation al ows52 Consolidation allows borrowers to borrowers to
refinance their loan by borrowing a new loan and using the proceeds to pay off their existing refinance their loan by borrowing a new loan and using the proceeds to pay off their existing
student loan obligations. After consolidation, terms and conditions of Direct Consolidation Loans student loan obligations. After consolidation, terms and conditions of Direct Consolidation Loans
apply; PHSA program loan terms and conditions no longer apply.apply; PHSA program loan terms and conditions no longer apply.
Default
A borrower is considered to be in default on his or her PHSA loan if he or she fails to make a A borrower is considered to be in default on his or her PHSA loan if he or she fails to make a
payment when payment when
due48due53 or otherwise fails to comply with the terms of the loan or otherwise fails to comply with the terms of the loan
’'s promissory note.s promissory note.
49 54 Institutions must assess borrowers a late fee for payments that are more than 60 days late. For Institutions must assess borrowers a late fee for payments that are more than 60 days late. For 42 See, for example, HHS, HRSA, “Student Financial Aid Guidelines, Health Professions Programs, Primary Care L oan Program (PCL),” December 2011, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/PCL-student-financial-aid-guidelines.pdf, p. 76. 43 See, for example, 42 C.F.R. §57.210. 44 See, for example, HHS, HRSA, “Student Financial Aid Guidelines, Health Professions Programs, Primary Care Loans,” December 2011, https://bhw.hrsa.gov/sites/default/files/bhw/pcl.pdf https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/PCL-student-financial-aid-guidelines.pdf, p. 76.
45 HRSA permits HPSL and LDS loans to be repaid over 25 years, but guidance regarding negotiation refers to a 10 -year repayment schedule for both programs. As such, it is unclear how the longer length operates with regard to loan
terms that have been renegotiated. See HHS, HRSA, “Student Financial Aid Guidelines Health Professions Program: Health Professions Student Loan Program, (HPSL)” December 2011, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/hpsl-financial-aid-guidelines.pdf, p. 38 and, HHS, HRSA, “ Student Financial Aid Guidelines, Health Professions Programs, Loans for Disadvantaged Students Program (LDS),” December, 2011, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/lds-financial-aid-guidelines.pdf, pp. 44.
46 PCLs are ineligible for consolidation into a Direct Consolidation Loan because of the requirements that PCL borrowers work for 10 years in primary care.
47 20 U.S.C. §1078-3(a)(4). Borrowers must meet additional criteria to consolidate their PHSA loans into a Direct Consolidation Loan, including having at least one loan borrowed through the Direct Loan program or the Federal Family Education Loan program.
48 T his is unlike the rules applicable to loans made under the HEA T itle IV Direct Loan program, where a borrower is generally considered in default on a loan when he or she fails to make required payments or otherwise fails to comply with the terms of loans promissory note for 270 days. 34 C.F.R. §685.102(b).
49 42 C.F.R. §§57.202 and 57.302. A promissory note is a contract between a lender and a borrower that contains the terms and conditions of the loan.
Congressional Research Service
10
link to page 16 Student Loan Programs Authorized by the Public Health Service Act: An Overview
loans disbursed or promissory notes signed on or after October 22, 1985, the late fee may not loans disbursed or promissory notes signed on or after October 22, 1985, the late fee may not
exceed 6% of the exceed 6% of the
instal mentinstallment payment. Schools must notify appropriate consumer reporting payment. Schools must notify appropriate consumer reporting
agencies regarding borrowers whose accounts are at least 120 days overdue.agencies regarding borrowers whose accounts are at least 120 days overdue.
50
55
Schools have several options in handling borrower default, including accelerating the loan Schools have several options in handling borrower default, including accelerating the loan
payment, wherein the entire unpaid balance of the loan becomes due in full, and referring payment, wherein the entire unpaid balance of the loan becomes due in full, and referring
defaulted loans to a collection agency and instituting legal proceedings against a borrower.defaulted loans to a collection agency and instituting legal proceedings against a borrower.
5156 In In
addition, schools may refer loans to the Secretary for collection assistance, which could include addition, schools may refer loans to the Secretary for collection assistance, which could include
the offset of federal employee salaries, if applicable, and subsequent referral to the Attorney the offset of federal employee salaries, if applicable, and subsequent referral to the Attorney
General for appropriate civil action.General for appropriate civil action.
52
57
With the exception of PCLs, a borrower may consolidate his or her defaulted PHSA loan into a With the exception of PCLs, a borrower may consolidate his or her defaulted PHSA loan into a
Direct Consolidation Loan under EDDirect Consolidation Loan under ED
’'s Direct Loan program by using the proceeds of a new s Direct Loan program by using the proceeds of a new
Direct Consolidation to pay off the defaulted loan. This would effectively cure the default on the Direct Consolidation to pay off the defaulted loan. This would effectively cure the default on the
PHSA loan, as the loan would be considered paid in full. To be eligiblePHSA loan, as the loan would be considered paid in full. To be eligible
to do so, a borrower must to do so, a borrower must
make satisfactory repayment arrangements with the loan make satisfactory repayment arrangements with the loan
holder53holder58 or agree to repay the Direct or agree to repay the Direct
Consolidation Loan under one the income-driven repayment plans available under the Direct Consolidation Loan under one the income-driven repayment plans available under the Direct
Loan program.Loan program.
5459
Loan Cancellation
PHSA loans may be PHSA loans may be
cancel edcancelled (sometimes referred to as (sometimes referred to as
loan discharge) if the borrower dies or ) if the borrower dies or
becomes permanently and becomes permanently and
total y disabled.55totally disabled.60 Schools are permitted to charge borrowers an Schools are permitted to charge borrowers an
insurance premium to cover the loss of institutional funds resulting from such insurance premium to cover the loss of institutional funds resulting from such
cancel ation.56cancellation.61 In In
addition, PHSA loans may be discharged in bankruptcy under limited circumstances.addition, PHSA loans may be discharged in bankruptcy under limited circumstances.
57 62
Program Data
Schools that participate in the active loan programs are required to provide HRSASchools that participate in the active loan programs are required to provide HRSA
with annual with annual
data on their programs. The most current data available are data on their programs. The most current data available are
as of July 1, 2019for academic year 2022-2023. Table 1 provides provides
data on the five active loan programs. Data are sorted by program; however, it is possible for a
50 42 C.F.R. §§57.210(b)(1)(x) and 57.310(b)(1)(x). 51 Institutions are required to use all of these practices to some extent; however, they often have discretion in determining when and how to use these practices. 42 C.F.R. §§57.210(b) & 57.310(b). See also HHS, HRSA, “ Student Financial Aid Guidelines, Fiscal Management , Accounting Procedures,” https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/fiscal-management -accounting.pdf, pp. 19-26.
52 42 U.S.C. §§292r(l) and 297b(j). 53 Regulations do not define “satisfactory repayment arrangements.” 54 34 C.F.R. § 685.220(i)(3)(ii) and U.S. Department of Education, “Direct Consolidation Loan Application an d Promissory Note: William D. Ford Federal Direct Loan Program,” OMB No. 1845 -0053. For additional information on the income-driven repayment plans, see CRS Report R45931, Federal Student Loans Made Through the William D.
Ford Federal Direct Loan Program : Term s and Conditions for Borrowers. 55 A borrower is considered permanently and totally disabled if he or she is “unable to engage in any substantial gainful activity because of a medically determinable impairment, which the Secretary expects to continue for a long time or to result in death.” HHS, HRSA; see, for example, 42 C.F.R. §57.211(a). 56 T he insurance premium may not exceed 0.6% of the loan amount disbursed. See, for example, HHS, HRSA, “ST UDENT FINANCIAL AID GUIDELINES, HEALT H PROFESSIONS PROGRAMS, Primary Care Loan Program (PCL),” December 2011, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/PCL-student -financial-aid-guidelines.pdf, p. 61. 57 Section 523(a)(8) of the Bankruptcy Code (11 U.S.C. § 523(a)(5)), provides that student loans are presumptively not dischargeable in bankruptcy absent an undue hardship. For additional information, see CRS Report R45113, Bankruptcy and Student Loans, Bankruptcy and Student Loans.
Congressional Research Service
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Student Loan Programs Authorized by the Public Health Service Act: An Overview
data on the five active loan programs. Data are sorted by program; however, it is possible for a borrower to receive loans for more than one PHSA program. Availableborrower to receive loans for more than one PHSA program. Available
data do not track data do not track
individual individual borrowers for confidentiality reasons. As such, it is not possible to determine unique borrowers for confidentiality reasons. As such, it is not possible to determine unique
borrower counts in each of the programs.borrower counts in each of the programs.
Congressional Research Service
12
link to page 18
Table 1. Active PHSA Loan Program Data
(Data as of July 2019)
Statutory Citation
Number of
Total Outstanding
Average
and Program
(Data for Academic Year 2022-2023)
Statutory Citation and Program Website
|
Borrower Type
|
RepaymentTerms
Number of Schools Participating
|
Number of Outstanding Loans
|
Total Outstanding Loan Balance($ in thousands)
Average Outstanding Loan Balance
|
|
Health Professions Student Loans
|
42 U.S.C. §§292q-r (https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/hpsl-financial-aid-guidelines.pdf)
Low-income student enrolled in accredited schools of dentistry, optometry, pharmacy, podiatric, or veterinary medicine
|
Repayment schedule of not less than 10 years, but not more than 25 years
5% interest rate
Deferment for
Repayment
Schools
Number of
Loan Balance
Outstanding Loan
Website
Borrower Type
Terms
Participating
Outstanding Loans
($ in thousands)
Balance
Health Professions Student Loans
42 U.S.C. §§292q-r
Low-income student
Repayment schedule of
112
30,050
$387,888
$12,908
(https://bhw.hrsa.gov/ enrol ed in accredited
not less than 10 years, but
sites/default/files/
schools of dentistry,
not more than 25 years
bureau-health-
optometry,
5% interest rate
workforce/funding/
pharmacy, podiatric,
hpsl-financial-aid-
or veterinary
Deferment for
guidelines.pdf)
medicine
postgraduate training postgraduate training
needed for licensureneeded for licensure
(e.g., (e.g.,
residency)residency)
Renegotiation and Renegotiation and
forbearance permittedforbearance permitted
Eligible for consolidation Eligible for consolidation
into Directinto Direct
Loan programLoan program
Primary Care Loans
42 U.S.C. §292s
Low-income students
Repayment schedule of
98
2,119
$149,540
$70,571
(https://bhw.hrsa.gov/ enrol ed in accredited
not less than 10 years and
sites/default/files/
schools of
not more than 25 years
bureau-health-
osteopathic or
workforce/funding/
al opathic medicine
Deferment for
160
|
22,201
|
$352,685
|
$15,886
|
|
Primary Care Loans
|
42 U.S.C. §292s (https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/PCL-student-financial-aid-guidelines.pdf)
Low-income students enrolled in accredited schools of osteopathic or allopathic medicine
|
Repayment schedule of not less than 10 years and not more than 25 years
Deferment for postgraduate training postgraduate training
PCL-student-
needed for licensureneeded for licensure
(e.g., (e.g.,
financial-aid-
residency)residency)
guidelines.pdf)
Must complete a Must complete a
residency in primary care residency in primary care
and practice for 10 years and practice for 10 years
(for borrowers(for borrowers
after after
March 23, 2010) or until March 23, 2010) or until
the loan is the loan is
repaida
repaida
Interest rate of 5%, but Interest rate of 5%, but
increases increases for borrowers for borrowers
CRS-13
link to page 18
Statutory Citation
Number of
Total Outstanding
Average
and Program
Repayment
Schools
Number of
Loan Balance
Outstanding Loan
Website
Borrower Type
Terms
Participating
Outstanding Loans
($ in thousands)
Balance
who fail to meet the primary who fail to meet the primary care service care service
requirement.requirement.
For borrowers For borrowers after March after March
23, 2010, rate increases 23, 2010, rate increases
2% above prior2% above prior
rate
rate
Renegotiation and Renegotiation and
forbearance are forbearance are
permitted
Ineligible permitted
Ineligible for consolidation for consolidation
into Directinto Direct
Loan programLoan program
Loans for Disadvantaged Students
42 U.S.C. §292t
Students from
Repayment schedule of
105
7,058
$151,889
$21,520
(https://bhw.hrsa.gov/ disadvantaged
not less than 10 years and
sites/
70
|
1,037
|
$85,930
|
$82,864
|
|
Loans for Disadvantaged Students
|
42 U.S.C. §292t (https://bhw.hrsa.gov/sites/default/default/
files/bureau-health-files/
backgrounds enrol ed
not more than 25 years
bureau-health-
in accredited schools
workforce/workforce/
funding/lds-financial-aid-guidelines.pdf)
Students from disadvantaged backgrounds enrolled in accredited schools of dentistry, pharmacy, allopathic, osteopathic, or veterinary medicineb
Repayment schedule of not less than 10 years and not more than 25 years
5% interest rate
Deferment for postgraduate training needed for licensure (e.g., residency)
funding/
of dentistry,
5% interest rate
lds-financial-aid-
pharmacy, al opathic,
Deferment for
guidelines.pdf)
osteopathic, or
postgraduate training
veterinary medicineb
needed for licensure (e.g., residency)
Renegotiation and Renegotiation and
forbearance permittedforbearance permitted
Eligible for consolidation Eligible for consolidation
into Directinto Direct
Loan programLoan program
Nursing Student Loans
42 U.S.C. §§297a-i
Low-income
Repayment schedule of 10
243
40,295
$143,301
$3,556
(https://bhw.hrsa.gov/ borrowers enrol ed
years
sites/
141
|
6,067
|
$173,396
|
$28,580
|
|
Nursing Student Loans
|
42 U.S.C. §§297a-i (https://bhw.hrsa.gov/sites/default/default/
files/bureau-health-workforce/funding/nsl-financial-aid-guidelines.pdf)
Low-income borrowers enrolled in nursing schools in preparation for an associate's, bachelor's, or graduate degree in nursing
|
- Repayment schedule of 10 years
- Interest rate of 5%
- Deferment while pursuing for advanced nursing training
- Renegotiation and forbearance permitted
- Eligible for consolidation into Direct Loan program
|
262
|
25,970
|
$110,600
|
$4,259
|
|
Nurse Faculty Loans
|
42 U.S.C. §297n-1 (https://www.hrsa.gov/grants/find-funding/hrsa-20-004)
Students who are graduate-level nurses interested in becoming nurse faculty 0
|
Repayment schedule of 10 years
3% interest rate
files/
in nursing schools in Interest rate of 5%
bureau-health-
preparation for an
workforce/funding/
associate’s,
Deferment while pursuing
nsl-financial-aid-
bachelor’s, or
for advanced nursing
guidelines.pdf)
training
CRS-14
link to page 18
Statutory Citation
Number of
Total Outstanding
Average
and Program
Repayment
Schools
Number of
Loan Balance
Outstanding Loan
Website
Borrower Type
Terms
Participating
Outstanding Loans
($ in thousands)
Balance
graduate degree in
Renegotiation and
nursing
forbearance permitted
Eligible for consolidation into Direct Loan program
Nurse Faculty Loans
42 U.S.C. §297n-1
Students who are
Repayment schedule of 10
80
2,277c
$75,000
$32,938
(https://www.hrsa.gov graduate-level nurses
years
/grants/find-funding/
interested in
hrsa-20-004)
becoming nurse
3% interest rate
faculty
Up to 85% of a borrower’s Up to 85% of a borrower's loan balance loan balance
may be may be
cancel edcancelled over over
four years for borrowers four years for borrowers
who are nurse faculty. who are nurse faculty.
Individuals are responsible Individuals are responsible
for paying the balance, for paying the balance,
plus interest,plus interest,
of their loan of their loan
at the end of four yearsat the end of four years
Deferment
Deferment while pursuingwhile pursuing
Advanced professional Advanced professional
training in nursingtraining in nursing
Forbearance permitted
Forbearance permitted
Eligible for consolidation Eligible for consolidation
into Directinto Direct
Loan programLoan program
211
|
2,746
|
$71,247
|
$182,745
|
Source: CRS AnalysisCRS Analysis
of Titles VII and VIII of the Public Health Serviceof Titles VII and VIII of the Public Health Service
Act and 42 C.F.R.Act and 42 C.F.R.
Part 57, Subparts C and D.Part 57, Subparts C and D.
Data obtained fromData obtained from
the Health Resources and the Health Resources and
Services Administration (HRSA) on June 4, 2020, July 14, 2020, and October 23, 2020. a. Primary Services Administration (HRSA) from September 30, 2024, and May 30, 2025.
a. Primary health care is defined as family medicine, is defined as family medicine,
general general internal medicine,internal medicine,
general general pediatrics, preventive medicine,pediatrics, preventive medicine,
or osteopathic general or osteopathic general
pra ctice. b. practice.
b. Students from disadvantaged backgrounds refers refers to individuals who are from backgrounds that have inhibited the individuals fromto individuals who are from backgrounds that have inhibited the individuals from
obtaining the knowledge,obtaining the knowledge,
skil s, and
abilities skills, and abilities required to graduate from a school, or who are from a low-incomerequired to graduate from a school, or who are from a low-income
family as defined by the program.
NFLP Loan Cancellation Data
In addition, data are available on the amount of cancellationfamily as defined by the program.
c. The Nurse Faculty Loan Program (NFLP) issued 2,277 loans, but made loans to 2,303 borrowers. The number of borrowers is higher than the number of loans
because some of these borrowers received loans prior to 2018 but did not receive loans for the 2018 -2019 academic year. Such borrowers may have not received
CRS-15
loans for various reasons, for example, because they were in the dissertation phase of their training or had taken a leave of absence. HRSA requires that institutions track each borrower who received an NFLP loan until the borrower has graduated or has otherwise left the program (i.e., attrition).
CRS-16
Student Loan Programs Authorized by the Public Health Service Act: An Overview
NFLP Loan Cancellation Data
In addition, data are available on the amount of cancel ation benefits received under the NFLP. As benefits received under the NFLP. As
previously described, up to 85% of a borrowerpreviously described, up to 85% of a borrower
’'s outstanding NFLP balance may be s outstanding NFLP balance may be
cancel edcancelled in in
exchange for serving for four years as a nurse faculty member at accredited nursing schools. For exchange for serving for four years as a nurse faculty member at accredited nursing schools. For
academic year academic year
2018-20192022-2023, the most recent year for which data are available, the average amount , the most recent year for which data are available, the average amount
of cancel ationof cancellation benefits received was $ benefits received was $
25,57115,457 dollars, representing a total of approximately $ dollars, representing a total of approximately $
42
mil ion in cancel ation12.8 million in cancellation benefits for 1, benefits for 1,
652747 borrowers. borrowers.
5863
Health Education Assistance Loan (HEAL) Program
PHSA Title VII Part A-I authorizes the HEALPHSA Title VII Part A-I authorizes the HEAL
program, which made loans available to qualifying program, which made loans available to qualifying
health professions students from FY1978 through FY1998. Congress terminated the authority to health professions students from FY1978 through FY1998. Congress terminated the authority to
make new HEALmake new HEAL
Program program loans after September 30, 1998, loans after September 30, 1998,
5964 however, many program loans however, many program loans
remain outstanding, and the federal government is responsible for administering the program. remain outstanding, and the federal government is responsible for administering the program.
HHS original y HHS originally administered the program, but the Consolidated Appropriations Act, 2014 (P.L. administered the program, but the Consolidated Appropriations Act, 2014 (P.L.
113-76), transferred administration of the program to the Department of Education (ED). As of 113-76), transferred administration of the program to the Department of Education (ED). As of
November 15, 2017February 29, 2024, HEAL program loans totaling approximately $, HEAL program loans totaling approximately $
187 mil ion421 million, borrowed by , borrowed by
11,3906,500 individuals, were outstanding. individuals, were outstanding.
60
65
The HEALThe HEAL
program is considerably different than the other student loan programs authorized program is considerably different than the other student loan programs authorized
under PHSA.under PHSA.
6166 Unlike Unlike
the PHSA loan programs discussed above, under the HEAL program, the PHSA loan programs discussed above, under the HEAL program,
private sector and state-based lenders originated loans to qualifying health professions students; private sector and state-based lenders originated loans to qualifying health professions students;
these loans were funded with nonfederal capital. The federal government guarantees lenders these loans were funded with nonfederal capital. The federal government guarantees lenders
against loss due to borrower default, death, permanent disability, and bankruptcy. Private and against loss due to borrower default, death, permanent disability, and bankruptcy. Private and
state-based lenders retain ownership of the loans and perform loan servicing functions, such as state-based lenders retain ownership of the loans and perform loan servicing functions, such as
bil ing billing borrowers, collecting loan payments, and initiating collection work on defaulted loans. If a borrowers, collecting loan payments, and initiating collection work on defaulted loans. If a
loan defaults, a HEALloan defaults, a HEAL
program lender may file an insurance claim with ED. Upon payment of the program lender may file an insurance claim with ED. Upon payment of the
claim by ED, the lender transfers the loan to ED, and ownership and responsibility for loan claim by ED, the lender transfers the loan to ED, and ownership and responsibility for loan
administration changes from lenders to ED (via its contracted loan servicers and administration changes from lenders to ED (via its contracted loan servicers and
privacy
collection collection
agencies).62
HEAL agency).67
HEAL program loan terms and conditions program loan terms and conditions
general ygenerally are prescribed in statute and are prescribed in statute and
general ytypically remain remain
the same upon transfer to ED. 63
58 An academic year is July 1-June 30. 59 42 U.S.C. §292a(a). T he ability to refinance or consolidate existing HEAL program loans within the HEAL program expired September 30, 2004. HEAL program loan borrowers currently may consolidate their loans into a Direct Consolidation Loan. 20 U.S.C. §§1078-3(d)(1)(C)(ii) and 1087e(a)(1).
60 U.S. Department of Education, “Health Education Assistance Loan (HEAL) Program,” 82 Federal Register 53377, November 15, 2017.
61 42 U.S.C. §292 et seq. 62 42 U.S.C. §292f(b) 63 Loan terms and conditions may vary slightly in specific instances once transferred to ED. For example, HEAL program loans owned by ED are eligible for the temporary suspension of interest and monthly payments provided to borrowers of ED-held loans in response to the coronavirus disease 2019 (COVID-19) pandemic, but borrowers of HEAL program loans not held by ED are ineligible for such benefits. U.S. Department of Education Office of Federal Student Aid, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents,” https://studentaid.gov/announcements-events/coronavirus, accessed October 26, 2020.
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Student Eligibility
HEAL the same upon transfer to ED. 68
Student Eligibility
HEAL program loans were available to eligibleprogram loans were available to eligible
graduate graduate
students64students enrolled in schools of enrolled in schools of
medicine, osteopathy, dentistry, veterinary medicine, optometry, podiatry, public health, medicine, osteopathy, dentistry, veterinary medicine, optometry, podiatry, public health,
pharmacy,pharmacy,
65 and chiropractic, or in programs in health administration and clinical psychology. and chiropractic, or in programs in health administration and clinical psychology.
6669 In In
addition, eligibleaddition, eligible
nonstudents (e.g., doctors serving as residents or interns) were able to borrow nonstudents (e.g., doctors serving as residents or interns) were able to borrow
new HEALnew HEAL
program loans to pay interest charges that accrued on earlier HEAL program loans.program loans to pay interest charges that accrued on earlier HEAL program loans.
67 Final y70 Finally, regardless of whether a borrower was a student or nonstudent, regulations specified that , regardless of whether a borrower was a student or nonstudent, regulations specified that
lenders were to make HEALlenders were to make HEAL
program loans only to applicants whom the lender had determined to program loans only to applicants whom the lender had determined to
be creditworthy.be creditworthy.
68 71
Loan Terms and Conditions
Interest Rates
At the lenderAt the lender
’'s option, HEALs option, HEAL
program loans were made with fixed or variable interest rates, but program loans were made with fixed or variable interest rates, but
the selected option remains effective for the life of the loan. Lenders set borrowersthe selected option remains effective for the life of the loan. Lenders set borrowers
’' loan interest loan interest
rates within certain parameters. For instance, borrower rates may not exceed the applicable rates within certain parameters. For instance, borrower rates may not exceed the applicable
maximum borrower interest rate calculated by the Secretary of Education (the Secretary).maximum borrower interest rate calculated by the Secretary of Education (the Secretary).
6972 For For
loans with fixed interest rates, the applicable maximum interest rate over the life of the loan is loans with fixed interest rates, the applicable maximum interest rate over the life of the loan is
calculated using statutorily specified rate setting formulae, which are used to determine calculated using statutorily specified rate setting formulae, which are used to determine
applicable fixed rates for the calendar quarter in which the loan was made. For loans with applicable fixed rates for the calendar quarter in which the loan was made. For loans with
variable interest rates, the applicable maximum interest rate is determined using the same variable interest rates, the applicable maximum interest rate is determined using the same
statutorily specified rate setting formulae, but changes each calendar quarter.statutorily specified rate setting formulae, but changes each calendar quarter.
7073 The formulae used The formulae used
by the Secretary to calculate the maximum interest rate vary depending on when the loan was by the Secretary to calculate the maximum interest rate vary depending on when the loan was
made, but for made, but for
al all loans made on or after October 22, 1985, the maximum interest rate is pegged to loans made on or after October 22, 1985, the maximum interest rate is pegged to
the 91-day U.S. Treasury the 91-day U.S. Treasury
Bil Bill auctioned for the preceding quarter, plus three percentage points, auctioned for the preceding quarter, plus three percentage points,
and rounded to the next higher one-eighth of one percent.and rounded to the next higher one-eighth of one percent.
7174 For example, for the quarter ending For example, for the quarter ending
December 31, 2020March 31, 2025, the maximum variable interest rate for loans made on or after October 22, 1985, is 7.875%.75, the maximum variable interest rate for loans made on or after October 22,
64 Additional eligibility criteria included, for example, that an individual be a U.S. citizen, national, or lawful permanent resident of the United States and be enrolled as a full-time student.
65 Individuals pursuing bachelor’s degrees in pharmacy were also eligible for HEAL program loans. 66 34 C.F.R. §681.5. 67 34 C.F.R. §681.6. 68 An applicant was considered creditworthy if he or she had “a repayment history that ha[d] been satisfactory on any loans on which payments ha[d] become due.” An applicant was not considered creditworthy if he or she was in default on any loan or delinquent on any federal debt, until the defaulted or delinquent account was made current or until satisfactory arrangements were made between the lender of the delinquent or defaulted loan and the HEAL program applicant. 34 C.F.R. §681.33(c). 69 Although the Servicemembers Civil Relief Act caps the maximum interest charged on any debt incurred by a servicemember prior to entering active duty service at no higher than 6% per year for the duration of their active duty service, the cap does not appear to apply to HEAL program loans. Specifically, 42 U.S.C. §292d(d) states, “ No provision of any law of the United States … or of any State that limits rate or amount of interest payable on loans shall apply” to a HEAL program loan. 70 42 U.S.C. §292d(a) and (b); 34 C.F.R. §681.13 71 See, for example, 34 C.F.R. §681.13(a)(1).
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1985, is 3.125%.72 Interest accrues on the loan from the date it is disbursed until it is paid in full
Interest accrues on the loan from the date it is disbursed until it is paid in full (i.e., no interest subsidy is provided).(i.e., no interest subsidy is provided).
73 76
Repayment
Borrowers are required to repay their HEALBorrowers are required to repay their HEAL
program loans during a repayment period, which program loans during a repayment period, which
typical y typically begins after a nine-month grace period.begins after a nine-month grace period.
7477 In general, lenders determine the length of the In general, lenders determine the length of the
loan repayment period; however, the repayment period may not be less than 10 years and not loan repayment period; however, the repayment period may not be less than 10 years and not
greater than 25 years. A borrower must repay his or her loan in full within 33 years from the date greater than 25 years. A borrower must repay his or her loan in full within 33 years from the date
the loan is made.the loan is made.
75 Typical y78 Typically, payments must be made on a monthly basis and may be made in , payments must be made on a monthly basis and may be made in
equal or graduated equal or graduated
instal mentsinstallments, with graduated , with graduated
instal mentinstallment payments increasing in amount over payments increasing in amount over
the repayment period.the repayment period.
7679 Lenders are required to offer an income-contingent repayment schedule Lenders are required to offer an income-contingent repayment schedule
that, during the first five years of repayment, is based on a borrowerthat, during the first five years of repayment, is based on a borrower
’'s income.s income.
7780 In general, total In general, total
annual payments must equal at least the amount of interest that accrues during the year.annual payments must equal at least the amount of interest that accrues during the year.
7881 A A
borrower may prepay borrower may prepay
al all or part of the loan at any time, without penalty.or part of the loan at any time, without penalty.
79
Eligible 82
Eligible borrowers may consolidate their HEALborrowers may consolidate their HEAL
program loans into a Direct Loan program program loans into a Direct Loan program
Consolidation Loan. If a borrower does so, the borrower repays the resulting Direct Consolidation Consolidation Loan. If a borrower does so, the borrower repays the resulting Direct Consolidation
Loan under the terms and conditions of the Direct Loan program.Loan under the terms and conditions of the Direct Loan program.
HEAL
HEAL program borrowers who are having difficulty making payments may receive a loan program borrowers who are having difficulty making payments may receive a loan
deferment or forbearance. Unlike the other loan programs authorized under the PHSA, interest on deferment or forbearance. Unlike the other loan programs authorized under the PHSA, interest on
HEAL HEAL program loans continues to accrue during periods of deferment. Deferment may be granted program loans continues to accrue during periods of deferment. Deferment may be granted
to a borrower in the following circumstances:to a borrower in the following circumstances:
80
whilewhile the borrower is pursuing a full-time course of study at an institution of higher education as pursuing a full-time course of study at an institution of higher education as
defined in Section 102(a) of the Higher Education Act;
72 Department of Education, Office of Federal Student Aid, “HEAL Interest Rates,” https://ifap.ed.gov/heal-interest-rates.
73 34 C.F.R. §681.13(b). 74 34 C.F.R. §681.11(a)(1). Generally, the grace period commences when a borrower ceases to be enrolled full -time at a HEAL program school. However, if a borrower meets specified conditions (e.g., enters an internship, residenc y, or fellowship training program), the start of the repayment period may be further postponed.
75 34 C.F.R. §681.11(b). For loans made prior to October 22, 1985, deferment periods are not included in any of the repayment period thresholds. For loans made o n or after October 22, 1985, periods of deferment are included in the 33 -year limitation, but are excluded from the 10- and 25-year limitations. For loans made on or after October 13, 1992, periods of forbearance are excluded from the 25 -year limitation. 42 U.S.C. §292d(e) and U.S. Department of Education, Office of Federal Student Aid, “Health Education Assistance Loan (HEAL) Program,” https://ifap.ed.gov/sites/default/files/attachments/2019-07/AboutHEALProgram.pdf [hereinafter FSA, HEAL], p. 2. 76 34 C.F.R. § 681.11(e). In addition, a lender or loan holder and a borrower may enter into a supplemental repayment
agreem ent under which a lender or holder “ agrees to consider that the borrower has met the terms of the regular repayment schedule as long as the borrower makes payments in accordance with the supplemental schedule.” A supplemental repayment schedule may be based on other than an equal or graduate pay ments, for example, the borrower’s income. 34 C.F.R. §681.11(f). 77 FSA, HEAL, p. 1. 78 34 C.F.R. §681.11(d). Borrowers and lenders may agree, in writing, that payments for any year or repayment period equal a lesser amount.
79 34 C.F.R. §681.11(c). 80 42 U.S.C. §292d(a)(2)C).
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Student Loan Programs Authorized by the Public Health Service Act: An Overview
defined in Section 102(a) of the Higher Education Act;
up to four years while participating in an accredited internship or residency up to four years while participating in an accredited internship or residency
program;81
program;83
up to two years while participating in a qualifiedup to two years while participating in a qualified
fel owship fellowship training program or training program or
educational activity at an eligibleeducational activity at an eligible
institution;institution;
82
84
up to three years for full-time active duty in the U.S. Armed Forces; up to three years for full-time active duty in the U.S. Armed Forces;
up to three years while serving in the Peace Corps, the National Health Service up to three years while serving in the Peace Corps, the National Health Service
Corps, or on a full-time basis in Volunteers in Service to America (VISTA);Corps, or on a full-time basis in Volunteers in Service to America (VISTA);
up to three years for a borrower who has completed a qualifying internship or up to three years for a borrower who has completed a qualifying internship or
residency training program and who is practicing primary care;residency training program and who is practicing primary care;
83
85
up to one year for borrowers who are graduates of schools of chiropractic; andup to one year for borrowers who are graduates of schools of chiropractic; and
up to three years while providing health care services to Indians through any up to three years while providing health care services to Indians through any
health program or facility wholly or health program or facility wholly or
partial y partially funded by the Indian Health Service funded by the Indian Health Service
for the benefit of Indians.for the benefit of Indians.
86Under the HEALUnder the HEAL
program, program,
forbearance is a temporary extension of time for making a payment or is a temporary extension of time for making a payment or
a temporary period during which a borrower may make payments in reduced amounts. a temporary period during which a borrower may make payments in reduced amounts.
Forbearance may be granted in six-month increments up to a maximum of two years. Periods of Forbearance may be granted in six-month increments up to a maximum of two years. Periods of
forbearance may be extended beyond the two-year limit with approval from the Secretary. forbearance may be extended beyond the two-year limit with approval from the Secretary.
Forbearance is granted if a lender determines that the borrower is temporarily unable to make Forbearance is granted if a lender determines that the borrower is temporarily unable to make
scheduled payments on his or her loan but continues to make payments on the loan in an amount scheduled payments on his or her loan but continues to make payments on the loan in an amount
commensurate with his or her ability to repay the loan.commensurate with his or her ability to repay the loan.
84
87
If a borrower fails to pay If a borrower fails to pay
al all of a required payment (or fails to provide written notification of of a required payment (or fails to provide written notification of
eligibility eligibility for deferment) to a HEAL program loan holder within 30 days after the paymentfor deferment) to a HEAL program loan holder within 30 days after the payment
’'s due s due
date, the holder is required to charge a late fee equal to 5% of the unpaid portion of the payment date, the holder is required to charge a late fee equal to 5% of the unpaid portion of the payment
due. The loan holder may also charge the borrower for reasonable costs incurred by the holder in due. The loan holder may also charge the borrower for reasonable costs incurred by the holder in
attempting to collect any past-due payments.attempting to collect any past-due payments.
8588 Loan holders must notify appropriate consumer Loan holders must notify appropriate consumer
reporting agencies regarding borrowers whose accounts are at least 60 days overdue.reporting agencies regarding borrowers whose accounts are at least 60 days overdue.
8689
Default
General y
Generally, a borrower is considered to be in default of a HEAL, a borrower is considered to be in default of a HEAL
program loan if he or she fails to program loan if he or she fails to
make payment when due or fails to otherwise comply with terms of the loanmake payment when due or fails to otherwise comply with terms of the loan
’'s promissory note s promissory note
for 120 days, in the case of loans paid in monthly for 120 days, in the case of loans paid in monthly
instal ments.87installments.90 Consequences of borrower Consequences of borrower
default include those typical of other federal student loan programs, such as referral of defaulted
81 For borrowers who received their first HEAL program loan on or after October 22, 1985, this four -year period includes any postponement of the repayment period following the initial grace period. 82 34 C.F.R. §681.12(b)(2) references eligible institutions as defined in HEA §435(b). Section 435(b) was repealed by the Higher Education Amendments of 1992 (P.L. 102-325).
83 Generally residencies in primary care are three years; however, an individual may do a combined residency in two primary care specialties (e.g., internal medicine and pediatrics) that may exceed three years. Generally, residencies in non-primary care specialties are longer than three y ears.
84 34 C.F.R. §681.37. 85 34 C.F.R. §681.15(a) and (b). 86 34 C.F.R. §681.35(c)(2). 87 34 C.F.R. §681.40(c)(1). A borrower is considered in default if loan payments are made less frequently than monthly and the borrower has failed to make such payments for 180 days.
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default include those typical of other federal student loan programs, such as referral of defaulted loans to a collection agency and litigation,loans to a collection agency and litigation,
88 along with consequences unique to the program, along with consequences unique to the program,
including89
including91 reduction of federal reimbursement or payments for health services provided reduction of federal reimbursement or payments for health services provided
under federal law (e.g., health services provided under the Medicare program), under federal law (e.g., health services provided under the Medicare program),
up to the remaining balance of the loans;up to the remaining balance of the loans;
publication of the borrowerpublication of the borrower
’'s name and the fact that he or she has defaulted in the s name and the fact that he or she has defaulted in the
Federal Register;;
9092 and and
notification of the borrowernotification of the borrower
’'s default to relevant federal agencies and to schools, s default to relevant federal agencies and to schools,
school associations, professional and specialty associations, state licensing school associations, professional and specialty associations, state licensing
boards, hospitals with which the borrower may be associated, and other relevant boards, hospitals with which the borrower may be associated, and other relevant
organizations.organizations.
91
93A borrower may consolidate his or her defaulted HEALA borrower may consolidate his or her defaulted HEAL
program loan into a Direct Consolidation program loan into a Direct Consolidation
Loan under EDLoan under ED
’'s Direct Loan program by using the proceeds of a new Direct Consolidation to s Direct Loan program by using the proceeds of a new Direct Consolidation to
pay off the defaulted loan. This would effectively cure the default on the HEALpay off the defaulted loan. This would effectively cure the default on the HEAL
program loan, as program loan, as
it would be considered paid in full. To be eligibleit would be considered paid in full. To be eligible
to do so, he or she must make satisfactory to do so, he or she must make satisfactory
repayment arrangements with the loan repayment arrangements with the loan
holder92holder94 or agree to repay the Direct Consolidation Loan or agree to repay the Direct Consolidation Loan
under one the income-driven repayment plans availableunder one the income-driven repayment plans available
under the Direct Loan program.under the Direct Loan program.
9395
Loan Discharge
HEAL
HEAL program loans may be program loans may be
discharged94discharged (sometimes referred to as loan (sometimes referred to as loan
cancel ationcancellation) if the ) if the
borrower dies or becomes permanently and borrower dies or becomes permanently and
total y disabled.95 HEAL totally disabled.96 HEAL program loans may be program loans may be
discharged in bankruptcy if specified criteria are met, including a determination by the discharged in bankruptcy if specified criteria are met, including a determination by the
Bankruptcy Court that not discharging the loan would be unconscionable.96
88 FSA, HEAL, pp. 2-3. 89 42 U.S.C. §§292f (f), (h) and 292h(c). 90 See, for example, Department of Education, “List of Borrowers Who Have Defaulted on T heir Health Education Assistance Loans,” 85 Federal Register 60140, September 24, 2020. 91 Some state laws require that an individual’s professional licensure be revoked or suspended if they default on outstanding loans, including HEAL program loans. See, for example, Jessica Silver -Greenberg, Stacy Cowley, and Nataile Kitroeff, “When Unpaid St udent Loan Bills Mean You Can No Longer Work,” The New York Times, November 18, 2017.
92 Regulations do not define “satisfactory repayment arrangements.” 93 34 C.F.R. § 685.220(i)(3)(ii) and U.S. Department of Education, “Direct Consolidation Loan Applicatio n and Promissory Note: William D. Ford Federal Direct Loan Program,” OMB No. 1845 -0053. Bankruptcy Court that not discharging the loan would be unconscionable.97
Appendix. Glossary of Terms
|
Acceleration
|
Demand for immediate repayment of the entire outstanding (unpaid) balance of a loan.
|
|
Consolidation
|
The process through which a borrower refinances his or her existing student loan by borrowing a new loan and using the proceeds to pay off existing student loan obligations.
|
|
Default
|
The failure of a borrower to make an installment payment on a loan when due, or to comply with any other terms of the promissory note for the loan.
|
|
Deferment
|
A temporary period during which a borrower's obligation to make regular payments of principal and interest is suspended, if the borrower meets applicable eligibility criteria.
|
|
Forbearance
|
Active PHSA Loan Programs: A period during which a borrower's obligation to make payments on a loan's principal (balance) is temporarily suspended.
HEAL Program: A period during which a borrower may extend the time for making payments or temporarily make smaller payments.
|
|
Grace period
|
A temporary period after a borrower ceases to meet specified enrollment status (full-time or part-time), during which the borrower is not required to make payments on his or her loan and during which interest does not accrue.
|
|
Prepayment
|
A loan payment made before it is due under the terms of the loan.
|
|
Promissory note
|
A contract between a lender and a borrower that contains the terms and conditions of the loan.
|
|
Repayment period
|
The time during which a borrower is obligated to make payments on a loan according to the terms and conditions of the loan.
|
|
Repayment schedule
|
The schedule on which borrowers are required to make loan payments. Repayment schedules include a due date for each payment, the amount credited to principal and interest from each payment, and any minimum payment amounts that may be required.
|
|
Renegotiation
|
A process through which a loan's repayment schedule is adjusted. It is used when a borrower is able to make payments on a regular basis but is unable to pay the amount required to keep his or her account current according to the existing repayment schedule.
|
Sources: These definitions are based on Titles VII and VIII of the Public Health Service Act; 34 C.F.R. Part 681; 42 C.F.R. 57; Subparts C and D, Health Resources and Services Administration (HRSA) Student Financial Aid Guidelines for Health Professions Student Loans, Loans for Disadvantaged Students, Primary Care Loans, and Nursing Student Loans, available at Health and Human Services (HHS), HRSA, "For Schools: Manage Your Loan Program," https://bhw.hrsa.gov/funding/schools-manage-loan-programs; HHS, HRSA Nurse Faculty Loan Program, "Nurse Faculty Loan Program (NFLP) Administrative Guidelines," https://www.hrsa.gov/sites/default/files/hrsa/grants/faqs/NFLP-admin-guidelines-2017.pdf; and HHS, HRSA, "Student Financial Aid Guidelines, Fiscal Management, Accounting Procedures," https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/fiscal-management-accounting.pdf.
Footnotes
| 1.
|
On March 27, 2025, Department of Health and Human Services (HHS) issued a press release and fact sheet announcing that HHS was being restructured. The fact sheet indicated that this restructuring would consolidate the Health Resources and Services Administration (HRSA) and other agencies into a new entity. At the time of this report's publication, the potential effect of this restructuring on HRSA's student loan programs and their administration is unknown. U.S. Department of Health and Human Services, "HHS Announces Transformation to Make America Healthy Again," press release, March 27, 2025, https://www.hhs.gov/press-room/hhs-restructuring-doge.html.
|
| 2.
|
CRS Communication with U.S. Department of Health and Human Service, Health Resources and Services Administration staff, September 30, 2024, and May 30, 2025.
|
3.
|
For additional information on the Direct Loan program, see CRS Report R45931, Federal Student Loans Made
Through the William D. Ford Federal Direct Loan Program : Term s: Terms and Conditions for Borrowers. In addition, two other federal student loan programs are authorized under Title IV of the HEA: the Federal Family Education Loan program and the Perkins Loan program. Loans are no longer being made under these programs, but borrowers remain responsible for making payments on outstanding loans made under the programs. The Direct Loan program makes up the majority of ED's student loan portfolio—approximately 90% in terms of dollars outstanding and recipients.
| 4.
|
Department of Education, Federal Student Aid, Federal Student Aid Data Center, "Federal Student Aid Portfolio Summary," FY2025, Q2, https://studentaid.gov/sites/default/files/fsawg/datacenter/library/PortfolioSummary.xls.
|
| 5.
|
For more information about school-based loan programs administered by the Department of Health and Human Service (HHS), see HHS, Health Resources and Services Administration (HRSA), "School-Based Loans and Scholarships," https://bhw.hrsa.gov/loans-scholarships/school-based-loans. For information about HRSA's Nurse Faculty Loan Program, see HHS, HRSA, "FAQ: Nurse Faculty Loan Program," https://bhw.hrsa.gov/funding/apply-grant/faq-nurse-faculty-loan-program-hrsa-24-015, last reviewed January 2024.
|
| 6.
|
CRS Communication with U.S. Department of Health and Human Service, Health Resources and Services Administration staff, September 30, 2024, and May 30, 2025.
|
| 7.
|
42 U.S.C. §292a(a).
|
| 8.
|
CRS communication with U.S. Department of Education staff, April 1, 2024.
|
| 9.
|
P.L. 105-392, §132.
|
| 10.
|
During these interviews, schools must provide borrowers with information about their rights and responsibilities with respect to the loans, such as information on repayment plans, loan deferments, and the consequences of default. See, for example, 42 C.F.R. §57.210(b)(1).
|
| 11.
|
Specific statutory sections are PHSA Section 799 (42 U.S.C. §295o-1), which sets criteria for eligible institutions; Section 721 (42 U.S.C. §292q), which lays out provisions for the loan fund agreements and the conditions that schools must agree when administering the fund; and Section 835 (42 U.S.C. §297a), which specifies criteria for the Nursing Student Loan program.
|
| 12.
|
The term state includes District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, Guam, American Samoa, and the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia. 42 C.F.R. §§57.202 and 57.302.
|
| 13.
|
For additional information on accreditation, see CRS Report R43826, An Overview of Accreditation of Higher Education in the United States.
|
| 14.
|
See HHS, HRSA, "Application: Health Professions Student Loans (HPSL) Program, Academic Year 2024," https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/2023-hpsl-application.pdf (hereinafter, HPSL Program Application), p. 8.
|
| 15.
|
Schools with a default rate above 5%, but below 10%, must reduce the default rate to the 5% threshold within six months.
|
| 16.
|
42 C.F.R. §57.216a.
|
| 17.
|
For example, HHS, HRSA, "Application to Participate in the Primary Care Loan (PCL) Program," https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/pcl-application.pdf, p. 4-5.
|
| 18.
|
For example, HHS, HRSA, "Application Loans for Disadvantaged Students (LDS) Program, Academic Year," https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/lds-application.pdf, pp. 10-11.
|
| 19.
|
See HHS, HRSA, "STUDENT FINANCIAL AID GUIDELINES, HEALTH PROFESSIONS PROGRAMS, Nursing Student Loan Program (NSL)," June 2017, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/nsl-financial-aid-guidelines.pdf (hereinafter, NSL Program Guidelines), p. 6.
|
| 20.
|
See HPSL Program Application; NSL Program Guidelines; and HHS, HRSA, "STUDENT FINANCIAL AID GUIDELINES, HEALTH PROFESSIONS PROGRAMS, Loans for Disadvantaged Students (LDS)," December 2011, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/lds-financial-aid-guidelines.pdf (hereinafter LDS Program Guidelines).
|
| 21.
|
See, for example, HHS, HRSA, "STUDENT FINANCIAL AID GUIDELINES, HEALTH PROFESSIONS PROGRAMS, Health Professions Student Loan Program (HPSL)," December 2011, https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/hpsl.pdf - :~:text=Students%20(LDS)%20and%20the%20Primary%20Care%20Loan%20(PCL)%20are%20intended https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/hpsl-financial-aid-guidelines.pdf (hereinafter HPSL Program Guidelines), pp. 14-15.
|
| 22.
|
In general, institutions participating in the programs have discretion in setting their costs of attendance. HRSA has indicated that using the HEA Title IV requirements for developing costs of attendance "is an appropriate approach." See, for example, HPSL Program Guidelines, p. 15.
|
| 23.
|
The FAFSA Simplification Act (Division FF, Title VII of the Consolidated Appropriations Act, 2021 [P.L. 116-59]) amended HEA Title IV-F by creating a student aid index to replace the expected family contribution. The act made additional changes to the need analysis formulas specified in the HEA. It appears HRSA has not updated PHSA loan program guidance to reflect these changes.
|
| 24.
|
Under the HEA, independent students include (but are not limited to) students who are 24 years of age or older by December 31 of the award year and graduate and professional students. HEA §480(d) (20 U.S.C. §1087vv(d)).
|
25.
|
For the PCL program, an independent student is a student who is at least 24 years of age and can prove they have been independent for a minimum of three years. HHS, HRSA, "STUDENT FINANCIAL AID GUIDELINES, HEALTH PROFESSIONS PROGRAMS, Primary Care Loans," December 2011, https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/PCL-student-financial-aid-guidelines.pdf (hereinafter PCL Program Guidelines), p. 35.
| 26.
|
For information on the Selective Service, see CRS Report R44452, The Selective Service System and Draft Registration: Issues for Congress.
|
| 27.
|
See, for example, PCL Program Guidelines, p. 37.
|
| 28.
|
See, for example, PCL Program Guidelines, p. 37.
|
| 29.
|
It does not appear that there are other restrictions on the type of previously borrowed student loan debt that may be paid down with LDS and PCL program loans.
|
| 30.
|
42 U.S.C. §297b. The PHSA sets the maximum annual loan amount for FY2010 and FY2011 at $35,000 per year to be adjusted for inflation in subsequent fiscal years. In the most recent competition in FY2025, HRSA specified that the maximum annual amount was $40,000 per year. See HHS, HRSA, "Notice of Funding Opportunity: Nurse Faculty Loan Program (NFLP): Opportunity number: HRSA-25-070," available for download at https://grants.gov/search-results-detail/355774.
|
| 31.
|
See HHS, HRSA, "Notice of Funding Opportunity: Nurse Faculty Loan Program (NFLP): Opportunity number: HRSA-25-070," available for download at https://grants.gov/search-results-detail/355774.
|
| 32.
|
42 U.S.C. §297n-1(c)(2).
|
| 33.
|
Different interest rates apply to PHSA loans made prior to November 5, 1988, depending on the date of disbursement.
|
| 34.
|
Individuals who received a loan prior to March 23, 2010, must practice primary care until the loan is repaid. These changes are described in CRS Report R41278, Public Health, Workforce, Quality, and Related Provisions in ACA: Summary and Timeline.
|
| 35.
|
Schools are also required to recalculate the balance due on the loan from the date of disbursement at an interest rate of 12% and compounded annually, for which borrowers would be responsible for repaying. PCL Program Guidelines, p. 22.
|
| 36.
|
42 U.S.C. §297s(a)(3). The Servicemembers Civil Relief Act caps the maximum interest charged on any debt incurred by a member of the armed forces and the commissioned corps of the National Oceanic Atmospheric Administration and the Public Health Service prior to entering active duty service at 6% per year for the duration of their active duty service, if their ability to pay is materially affected by active-duty status. The cap is not automatic and must be requested by the servicemember. For additional information, see CRS Report R45283, The Servicemembers Civil Relief Act (SCRA): Section-by-Section Summary.
|
| 37.
|
NSL Program Guidelines, p. 24.
|
38.
|
A repayment schedule is the schedule by which borrowers are required to make loan payments. It includes and Conditions for Borrowers. 94 Borrower of HEAL program loans may be eligible for various other federal loan forgiveness and loan repayment programs authorized outside of PHSA T itle VII Part A-I. For additional information, see CRS Report R43571, Federal
Student Loan Forgiveness and Loan Repaym ent Program s.
95 42 U.S.C. §292m. T he Secretary of Education discharges HEAL program loans due to a borrower’s total and permanent disability in accordance with the same procedures used for Direct Loan program loans. 34 C.F.R. §681.39(b). 96 42 U.S.C. §292f(g). T his standard differs from the more generally applicable standard that student loans are presumptively not dischargeable in bankruptcy absent an undue hardship. For additional information on the dischargeability of student loan debt in bankruptcy, see CRS Report R45113, Bankruptcy and Student Loans.
Congressional Research Service
21
Student Loan Programs Authorized by the Public Health Service Act: An Overview
Appendix. Glossary of Terms
Acceleration
Demand for immediate repayment of the entire outstanding (unpaid) balance of a loan.
Consolidation
The process through which a borrower refinances his or her existing student loan by borrowing a new loan and using the proceeds to pay off existing student loan obligations.
Default
The failure of a borrower to make an instal ment payment on a loan when due, or to comply with any other terms of the promissory note for the loan.
Deferment
A temporary period during which a borrower’s obligation to make regular payments of principal and interest is suspended, if the borrower meets applicable eligibility criteria.
Forbearance
Active PHSA Loan Programs: A period during which a borrower’s obligation to make payments on a loan’s principal (balance) is temporarily suspended. HEAL Program: A period during which a borrower may extend the time for making payments or temporarily make smal er payments.
Grace period
A temporary period after a borrower ceases to meet specified enrol ment status (ful -time or part-time), during which the borrower is not required to make payments on his or her loan and during which interest does not accrue.
Prepayment
A loan payment made before it is due under the terms of the loan.
Promissory note
A contract between a lender and a borrower that contains the terms and conditions of the loan.
Repayment period
The time during which a borrower is obligated to make payments on a loan according to the terms and conditions of the loan.
Repayment
The schedule on which borrowers are required to make loan payments. Repayment
schedule
schedules include a due date for each payment, the amount credited to principal and a due date for each payment, the amount credited to principal and
interest frominterest from
each payment, and any minimumeach payment, and any minimum
payment amounts that may be required.
| 39.
|
Deferment periods are excluded from the 25-year limit.
|
| 40.
|
NSL Program Guidelines, p. 31.
|
| 41.
|
PCL Program Guidelines, p. 72.
|
| 42.
|
Uniformed services includes active duty service in the Army, Navy, Air Force, Marine Corps, Coast Guard, National Oceanic Atmospheric Administration, and the Public Health Service. Regulations do not state whether uniformed services include the Space Force, as the regulations were last updated prior to the Space Force's establishment. See, for example, 42 C.F.R. § 57.210(a)(2).
|
| 43.
|
Service in Volunteers in Service to America (VISTA) volunteer does not qualify for deferment.
|
| 44.
|
Clinical training at a foreign institution may qualify a borrower for deferment, although foreign institutions themselves are not eligible to participate in these programs. Foreign clinical training would qualify an individual for a deferment if such training counts for purposes of licensure or board certification where applicable. Schools are permitted to determine if such training is eligible for forbearance.
|
| 45.
|
This educational activity must be through a joint-degree program that is related to the original degree for which the borrower is receiving support. While the educational program may exceed two years, PHSA loans may only be deferred for two years for a related degree.
|
| 46.
|
NSL Program Guidelines, p. 31.
|
| 47.
|
See, for example, PCL Program Guidelines, p. 76.
|
| 48.
|
See, for example, 42 C.F.R. §57.210.
|
| 49.
|
See, for example, PCL Program Guidelines, p. 76.
|
| 50.
|
HRSA permits HPSL and LDS loans to be repaid over 25 years, but guidance regarding negotiation refers to a 10-year repayment schedule for both programs. As such, it is unclear how the longer length operates with regard to loan terms that have been renegotiated. See HPSL Program Guidelines, p. 38 and LDS Program Guidelines, pp. 44.
|
| 51.
|
PCLs are ineligible for consolidation into a Direct Consolidation Loan because of the requirements that PCL borrowers work for 10 years in primary care. See HHS, HRSA, "Primary Care Loan (PCL) FAQs," https://bhw.hrsa.gov/funding/schools-apply-loan-program/primary-care-loans-faq, last reviewed September 2021; see questions 13-15.
|
| 52.
|
20 U.S.C. §1078-3(a)(4). Borrowers must meet additional criteria to consolidate their PHSA loans into a Direct Consolidation Loan, including having at least one loan borrowed through the Direct Loan program or the Federal Family Education Loan program.
|
| 53.
|
This is unlike the rules applicable to loans made under the HEA Title IV Direct Loan program, where a borrower is generally considered in default on a loan when he or she fails to make required payments or otherwise fails to comply with the terms of loans promissory note for 270 days. 34 C.F.R. §685.102(b).
|
| 54.
|
42 C.F.R. §§57.202 and 57.302. A promissory note is a contract between a lender and a borrower that contains the terms and conditions of the loan.
|
| 55.
|
42 C.F.R. §§57.210(b)(1)(x) and 57.310(b)(1)(x).
|
56.
|
Institutions are required to use all of these practices to some extent; however, they often have discretion in determining when and how to use these practices. 42 C.F.R. §§57.210(b) & 57.310(b). See also HHS, HRSA, "Student Financial Aid Guidelines, Fiscal Management, Accounting Procedures," payment amounts that may be required.
Renegotiation
A process through which a loan’s repayment schedule is adjusted. It is used when a borrower is able to make payments on a regular basis but is unable to pay the amount required to keep his or her account current according to the existing repayment schedule.
Sources: These definitions are based on Titles VII and VIII of the Public Health Service Act; 34 C.F.R. Part 681; 42 C.F.R. 57; Subparts C and D, Health Resources and Services Administration (HRSA) Student Financial Aid Guidelines for Health Professions Student Loans, Loans for Disadvantaged Students, Primary Care Loans, and Nursing Student Loans, available at Health and Human Services (HHS), HRSA, “School-Based Loans and Scholarships,” https://bhw.hrsa.gov/loans-scholarships/school-based-loans; HHS, HRSA Nurse Faculty Loan Program, “Nurse Faculty Loan Program (NFLP) Administrative Guidelines,” https://www.hrsa.gov/sites/default/files/hrsa/grants/faqs/NFLP-admin-guidelines-2017.pdf; and HHS, HRSA, “Student Financial Aid Guidelines, Fiscal Management, Accounting Procedures,” https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/
fiscal-management-accounting.pdf.
Author Information
Elayne J. Heisler
Alexandra Hegji
Specialist in Health Services
Analyst in Social Policy
Congressional Research Service
22
Student Loan Programs Authorized by the Public Health Service Act: An Overview
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you wish to copy or otherwise use copyrighted material.
Congressional Research Service
R46720 · VERSION 1 · NEW
23 fiscal-management-accounting.pdf, pp. 19-26.
| 57.
|
42 U.S.C. §§292r(l) and 297b(j).
|
| 58.
|
Regulations do not define "satisfactory repayment arrangements."
|
| 59.
|
34 C.F.R. § 685.220(d)(1)(I)(A)(3) and U.S. Department of Education, "Direct Consolidation Loan Application and Promissory Note: William D. Ford Federal Direct Loan Program," OMB No. 1845-0053. For additional information on the income-driven repayment plans, see CRS Report R45931, Federal Student Loans Made Through the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers.
|
| 60.
|
A borrower is considered permanently and totally disabled if he or she is "unable to engage in any substantial gainful activity because of a medically determinable impairment, which the Secretary expects to continue for a long time or to result in death." HHS, HRSA; see, for example, 42 C.F.R. §57.211(a).
|
| 61.
|
The insurance premium may not exceed 0.6% of the loan amount disbursed. See, for example, PCL Program Guidelines, p. 61.
|
| 62.
|
Section 523(a)(8) of the Bankruptcy Code (11 U.S.C. § 523(a)(5)), provides that student loans are presumptively not dischargeable in bankruptcy absent an undue hardship. For additional information, see CRS Report R45113, Bankruptcy and Student Loans, Bankruptcy and Student Loans.
|
| 63.
|
CRS Communication with U.S. Department of Health and Human Service, Health Resources and Services Administration staff, September 30, 2024, and May 30, 2025.
|
| 64.
|
42 U.S.C. §292a(a). The ability to refinance or consolidate existing HEAL program loans within the HEAL program expired September 30, 2004. HEAL program loan borrowers currently may consolidate their loans into a Direct Consolidation Loan. 20 U.S.C. §§1078-3(d)(1)(C)(ii) and 1087e(a)(1).
|
| 65.
|
CRS communication with U.S. Department of Education staff, March 21, 2024.
|
| 66.
|
42 U.S.C. §292 et seq.
|
| 67.
|
42 U.S.C. §292f(b)
|
| 68.
|
Loan terms and conditions may vary slightly in specific instances once transferred to ED. For example, HEAL program loans owned by ED were eligible for the temporary suspension of interest and monthly payments provided to borrowers of ED-held loans in response to the coronavirus disease 2019 (COVID-19) pandemic, but borrowers of HEAL program loans not held by ED were ineligible for such benefits. For additional information, see CRS Report R46314, Federal Student Loan Debt Relief in the Context of COVID-19.
|
| 69.
|
Additional eligibility criteria included, for example, that an individual be a U.S. citizen, national, or lawful permanent resident of the United States and be enrolled as a full-time student. Individuals pursuing bachelor's degrees in pharmacy were also eligible for HEAL program loans. 34 C.F.R. §681.5.
|
| 70.
|
34 C.F.R. §681.6.
|
| 71.
|
An applicant was considered creditworthy if he or she had "a repayment history that ha[d] been satisfactory on any loans on which payments ha[d] become due." An applicant was not considered creditworthy if he or she was in default on any loan or delinquent on any federal debt, until the defaulted or delinquent account was made current or until satisfactory arrangements were made between the lender of the delinquent or defaulted loan and the HEAL program applicant. 34 C.F.R. §681.33(c).
|
| 72.
|
Although the Servicemembers Civil Relief Act caps the maximum interest charged on any debt incurred by a servicemember prior to entering active duty service at no higher than 6% per year for the duration of their active duty service, the cap does not appear to apply to HEAL program loans. Specifically, 42 U.S.C. §292d(d) states, "No provision of any law of the United States … or of any State that limits rate or amount of interest payable on loans shall apply" to a HEAL program loan.
|
| 73.
|
42 U.S.C. §292d(a) and (b); 34 C.F.R. §681.13
|
| 74.
|
See, for example, 34 C.F.R. §681.13(a)(1).
|
| 75.
|
Department of Education, Office of Federal Student Aid, "HEAL Interest Rates," https://fsapartners.ed.gov/knowledge-center/topics/health-education-assistance-loan-heal-information/heal-interest-rates, accessed June 2, 2025.
|
| 76.
|
34 C.F.R. §681.13(b).
|
| 77.
|
34 C.F.R. §681.11(a)(1). Generally, the grace period commences when a borrower ceases to be enrolled full-time at a HEAL program school. However, if a borrower meets specified conditions (e.g., enters an internship, residency, or fellowship training program), the start of the repayment period may be further postponed.
|
| 78.
|
34 C.F.R. §681.11(b). For loans made prior to October 22, 1985, deferment periods are not included in any of the repayment period thresholds. For loans made on or after October 22, 1985, periods of deferment are included in the 33-year limitation, but are excluded from the 10- and 25-year limitations. For loans made on or after October 13, 1992, periods of forbearance are excluded from the 25-year limitation. 42 U.S.C. §292d(e) and U.S. Department of Education, Office of Federal Student Aid, "Health Education Assistance Loan (HEAL) Program," https://fsapartners.ed.gov/sites/default/files/attachments/2019-07/AboutHEALProgram.pdf [hereinafter FSA, HEAL], p. 2.
|
| 79.
|
34 C.F.R. § 681.11(e). In addition, a lender or loan holder and a borrower may enter into a supplemental repayment agreement under which a lender or holder "agrees to consider that the borrower has met the terms of the regular repayment schedule as long as the borrower makes payments in accordance with the supplemental schedule." A supplemental repayment schedule may be based on other than an equal or graduate payments, for example, the borrower's income. 34 C.F.R. §681.11(f).
|
| 80.
|
FSA, HEAL, p. 1.
|
| 81.
|
34 C.F.R. §681.11(d). Borrowers and lenders may agree, in writing, that payments for any year or repayment period equal a lesser amount.
|
| 82.
|
34 C.F.R. §681.11(c).
|
| 83.
|
For borrowers who received their first HEAL program loan on or after October 22, 1985, this four-year period includes any postponement of the repayment period following the initial grace period.
|
| 84.
|
34 C.F.R. §681.12(b)(2) references eligible institutions as defined in HEA §435(b). Section 435(b) was repealed by the Higher Education Amendments of 1992 (P.L. 102-325).
|
| 85.
|
Generally residencies in primary care are three years; however, an individual may do a combined residency in two primary care specialties (e.g., internal medicine and pediatrics) that may exceed three years. Generally, residencies in non-primary care specialties are longer than three years.
|
| 86.
|
42 U.S.C. §292d(a)(2)(C).
|
| 87.
|
34 C.F.R. §681.37.
|
| 88.
|
34 C.F.R. §681.15(a) and (b).
|
| 89.
|
34 C.F.R. §681.35(c)(2).
|
| 90.
|
34 C.F.R. §681.40(c)(1). A borrower is considered in default if loan payments are made less frequently than monthly and the borrower has failed to make such payments for 180 days.
|
| 91.
|
42 U.S.C. §§292f (f), (h) and 292h(c). See also FSA, HEAL, pp. 2-3.
|
| 92.
|
See, for example, Department of Education, "List of Borrowers Who Have Defaulted on Their Health Education Assistance Loans," 86 Federal Register 54950, October 5, 2021.
|
| 93.
|
Some state laws require that an individual's professional licensure be revoked or suspended if they default on outstanding loans, including HEAL program loans. See, for example, Jessica Silver-Greenberg, Stacy Cowley, and Natalie Kitroeff, "When Unpaid Student Loan Bills Mean You Can No Longer Work," The New York Times, November 18, 2017.
|
| 94.
|
Regulations do not define "satisfactory repayment arrangements."
|
| 95.
|
34 C.F.R. § 685.220(i)(3)(ii) and U.S. Department of Education, "Direct Consolidation Loan Application and Promissory Note: William D. Ford Federal Direct Loan Program," OMB No. 1845-0053. Federal Student Loans Made Through the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers.
|
| 96.
|
42 U.S.C. §292m. The Secretary of Education discharges HEAL program loans due to a borrower's total and permanent disability in accordance with the same procedures used for Direct Loan program loans. 34 C.F.R. §681.39(b). Borrower of HEAL program loans may be eligible for various other federal loan forgiveness and loan repayment programs authorized outside of PHSA Title VII Part A-I. For additional information, see CRS Report R43571, Federal Student Loan Forgiveness and Loan Repayment Programs.
|
| 97.
|
42 U.S.C. §292f(g). This standard differs from the more generally applicable standard that student loans are presumptively not dischargeable in bankruptcy absent an undue hardship. For additional information on the dischargeability of student loan debt in bankruptcy, see CRS Report R45113, Bankruptcy and Student Loans.
|