Program Announcement for Contracts for the Disadvantaged Health Professions Faculty Loan Repayment Program for Fiscal Year 1996

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Resources and Services Administration

Program Announcement for Contracts for the Disadvantaged Health

Professions Faculty Loan Repayment Program for Fiscal Year 1996

The Health Resources and Services Administration (HRSA) announces

that applications for contracts for fiscal year (FY) 1996, for the

Disadvantaged Health Professions Faculty Loan Repayment Program (FLRP)

are now being accepted under section 738(a) of the Public Health

Service Act (The Act).

This program announcement is subject to reauthorization of the

legislative authority and to the appropriation of funds. Applicants are

advised that this program announcement is a contingency action being

taken to assure that should authority and funds become available for

this purpose, they can be awarded in a timely fashion consistent with

the needs of the program as well as to provide for even distribution of

funds throughout the fiscal year. At this time, given a continuing

resolution and the absence of FY 1996 appropriations for title VII

programs, the amount of available funding for this program cannot be

estimated.

Purpose

The purpose of the Disadvantaged Health Professions Faculty Loan

Repayment Program (FLRP), authorized by section 738(a), is to attract

disadvantaged health professionals into faculty positions in accredited

health professions schools. The program provides a financial incentive

for degree-trained health professions personnel from disadvantaged

backgrounds who will serve as members of the faculties of those

schools. The FLRP is directed at those individuals available to serve

immediately or within a short time as ``new'' full-time faculty

members. Loan repayment may be provided only for an individual who has

not been a member of the faculty of any school at any time during the

18-month period preceding the date on which the Secretary receives the

request of the individual for a repayment contract (i.e., ``new''

faculty).

Section 738(b) makes available grants and contracts with schools of

medicine, osteopathic medicine, dentistry, veterinary medicine,

optometry, podiatric medicine, pharmacy, public health, health

administration, clinical psychology and other public or private

nonprofit health or educational entities to assist in increasing the

number of underrepresented minority faculty. Section 738(b) will be

implemented as a separate program.

Eligible Individuals

Individuals from disadvantaged backgrounds are eligible to compete

for participation in the FLRP if they:

1. Have degrees in medicine, osteopathic medicine, dentistry,

nursing, pharmacy, podiatric medicine, optometry, veterinary medicine,

public health or clinical psychology; or

2. Are enrolled in an approved graduate training program in one of

the health professions listed above; or

3. Are enrolled as full-time students in the final year of health

professions training, leading to a degree from an eligible school.

Established faculty members are not eligible to apply for funds

under the FLRP. Only individuals that have not taught in the last 18

(eighteen) months prior to application to the program will be

considered.

Statutory Requirements

Prior to submitting an application for a contract for loan

repayment, individuals must sign a contract with an eligible school, as

prescribed by the Secretary, setting forth the terms and conditions of

the FLRP. This contract with the school must require the individual to

serve as a full-time member of the faculty, as determined by the

school, for not less than 2 years, whereby the school agrees to pay,

for each year, a sum (in addition to faculty salary) equal to that paid

by the Secretary towards the repayment of principal due on the

applicant's health professions educational loans. Additionally, the

individual involved may not have been a member of the faculty of any

school at any time during the last 18 months prior to application to

the program.

Eligible Schools

Eligible schools are public or nonprofit private accredited schools

of medicine, nursing, as defined in section 853 of the Act, osteopathic

medicine, dentistry, pharmacy, podiatric medicine, optometry,

veterinary medicine or public health, or schools that offer graduate

programs in clinical psychology and which are located in States as

provided in section 799 of the Act.

Provisions of the Loan Repayment Program

Section 738(a) authorizes repayment, for each year of service, as

much as 20 percent of the outstanding principal and interest on the

individuals educational loans, not to exceed $20,000 for any given

year. The school pays an equal amount, unless the Secretary determines

that the repayment will impose an undue financial hardship on the

school in which case, the Secretary may pay up to the entire 20

percent.

The school is required, for each such year, to make payments of

principal and interest in an amount equal to the amount of payment made

by the Secretary for that year. These payments must be in addition to

the faculty salary the participant otherwise would receive.

Allowable educational loan repayment expenses include the

following:

1. Tuition expenses;

2. All other reasonable educational expenses such as fees, books,

supplies, educational equipment and materials required by the school,

and incurred by the applicant;

3. Reasonable living expenses, as determined by the Secretary; and

4. Partial payments of the increased Federal income tax liability

caused by the FLRP's payments and considered to be ``other income,'' if

the recipient requests such assistance.

Prior to entering into a contract for repayment of loans, the

Secretary requires satisfactory evidence of the existence and

reasonableness of the individual's educational loans, including a copy

of the original written loan agreement establishing the outstanding

educational loan.

Waiver Provision

In the event of undue financial hardship to a school, the school

may obtain from the Secretary a waiver of its share of payments while

the participant

[[Page 3717]]

is serving under the terms of the contract. For purposes of this

program, ``undue financial hardship'', as seen by the Secretary, is

based on a school's particular financial status as influenced by such

circumstances as budget cutbacks. Decisions will be made on a case-by-

case basis, and must be supported by the school's documentation of

comparative yearly financial allocation of funds; or the most current

certified public accounting audit, including the Balance Sheet and

Statement of Income and Expenses for the past several years.

If the Secretary waives the school's payment requirement, the

amount of the Federal loan repayment may be up to the full 20 percent

described above (regardless of the ``equal amount'' provision described

above), but cannot exceed the $20,000 repayment limit. The participant

must pay that portion of loan payment due which is not covered.

The following Definitions, Program Requirements, Review Criteria

and Funding Preference were established in FY 1991 after public comment

dated October 2, 1991, at 56 FR 49896, and the Secretary is extending

them in FY 1996.

Definitions

For purposes of the FLRP in FY 1996, an ``Individual from a

Disadvantaged Background'' is defined as in 42 CFR 57.1804, as one who:

1. Comes from an environment that has inhibited the individual from

obtaining the knowledge, skill, and abilities required to enroll in and

graduate from a health professions school, or from a program providing

education or training in an allied health profession; or

2. Comes from a family with an annual income below a level based on

low income thresholds according to a family size published by the U.S.

Bureau of the Census, adjusted annually for changes in the Consumer

Price Index, and adjusted by the Secretary for use in health

professions and nursing programs. The Secretary will periodically

publish these income levels in the Federal Register. The following

income figures determine what constitutes a low income family for

purposes of the Faculty Loan Repayment Program for FY 1996.

------------------------------------------------------------------------

Income

Size of parents' family \1\ level \2\

------------------------------------------------------------------------

1.......................................................... $10,000

2.......................................................... 12,900

3.......................................................... 15,400

4.......................................................... 19,700

5.......................................................... 23,200

6 or more.................................................. 26,100

------------------------------------------------------------------------

\1\ Includes only dependents listed on Federal income tax forms.

\2\ Adjusted gross income for calendar year 1994 rounded to $100.

The term ``Living expenses'' means the costs of room and board,

transportation and commuting costs, and other costs incurred during an

individual's attendance at a health professions school, as estimated

each year by the school as part of the school's standard student

budget. (National Health Service Corps Loan Repayment Program, 42 CFR

part 62.22)

The term ``Reasonable educational expenses and living expenses''

means the costs of those educational and living expenses which are

equal to or less than the sum of the school's estimated standard

student budgets for educational and living expenses for the degree

program and for the year(s) during which the Program participant is/was

enrolled in the school. (National Health Service Corps Loan Repayment

Program, 42 CFR part 62.22)

The term ``Unserved Obligation Penalty'' means the amount equal to

the number of months of obligated service that were not completed by an

individual, multiplied by $1,000, except that in any case in which the

individual fails to serve 1 year, the unserved obligation penalty shall

be equal to the full period of obligated service multiplied by $1,000.

(Section 338E of the Act) See ``Breach of Contract'' section below.

Program Requirements

The following requirements will be applied to the applicant and to

the school.

The Applicant

The applicant will be required to do the following:

1. Submit a completed application, including the applicant's

contract with an eligible school to serve as a full- time faculty

member for not less than 2 years;

2. Provide evidence that the applicant has completely satisfied any

other obligation for health professional service which is owed under an

agreement with the Federal Government, State Government, or other

entity prior to beginning the period of service under this program;

3. Certify that the United States does not hold a judgment against

the applicant; and

4. Provide documentation to evidence the educational loans and to

verify their status.

The School

The school will be required to do the following:

1. Enter into a contractual agreement with the applicant whereby

the school is required, for each year for which the participant serves

as a faculty member, to make payments of principal and interest in an

amount equal to the amount of such quarterly payments made by the

Secretary. These payments must be in addition to the faculty salary the

participant otherwise would receive.

2. Verify the participant's continuous employment at intervals as

prescribed by the Secretary.

The Secretary will pay participants in equal quarterly payments

during the period of service.

Effective Date of Contract

After an applicant has been approved for participation in the FLRP,

the Director, Division of Disadvantaged Assistance (DDA), will send the

applicant a contract with the Secretary. The effective date is either

the date work begins at the school as a faculty member or the date the

Director, DDA, signs the FLRP contract, whichever is later. Service

should begin no later than September 30, 1996.

Breach of Contract

The following areas under Breach of Contract are addressed in the

appended contract:

1. If the participant fails to serve his or her period of obligated

faculty service (minimum of 2 years) as contracted with the school, he/

she is then in breach of contract, and neither the Secretary nor the

school is obligated to continue loan repayments as stated in the

contract. The participant must then reimburse the Secretary and the

participating school for all sums of principal and interest paid on

his/her behalf as stated in the contract in addition to any income tax

assistance he/she may have received.

2. Regardless of the length of the agreed period of obligated

service (2, 3, or more years), a participant who serves less than the

time period specified in his/her contract is liable for monetary

damages to the United States amounting to the sum of the total of the

amounts the Program paid him/her, plus an ``unserved obligation

penalty'' of $1,000 for each month unserved.

3. Any amount which the United States is entitled to recover

because of a breach of the FLRP contract must be paid within 1 year

from the day the Secretary determines that the participant is in breach

of contract. If payment is not received by the payment date, additional

interest, penalties and

[[Page 3718]]

administrative charges will be assessed in accordance with Federal Law

(45 CFR 30.13).

Review Criteria

The HRSA will review fiscal year 1996 applications taking into

consideration the following criteria:

1. The extent to which the applicant meets the requirements of

section 738(a) of the Act;

2. The completeness, accuracy, and validity of the applicant's

responses to application requirements;

3. The submission of the signed contract with the school;

4. An applicant's earliest available date to begin service as a

faculty member provided funding is available for that year; and

5. An applicant's availability to enter into a service contract for

a longer period than the mandatory 2-year minimum.

Factors to assure equitable distribution (e.g. geographic,

discipline) will be considered in determining the funding of completed

applications.

National Health Objectives for the Year 2000

The Public Health Service (PHS) is committed to achieving the

health promotion and disease prevention objectives of Healthy People

2000, a PHS-led national activity for setting priority areas. The

Disadvantaged Health Professions Faculty Loan Repayment Program is

related to the priority area of Educational and Community-Based

Programs. Potential applicants may obtain a copy of Healthy People 2000

(Full Report; Stock No. 017-001- 00474-0) or Healthy People 2000

(Summary Report; Stock No. 017- 001-00473-1) through the Superintendent

of Documents, Government Printing Office, Washington, D.C. 20402-9325

(Telephone (202) 783-3238).

Education and Service Linkage

As part of its long-range planning, HRSA will be targeting its

efforts to strengthening linkages between U.S. Public Health Service

education programs and programs which provide comprehensive primary

care services to the underserved.

Smoke-Free Workplace

The Public Health Service strongly encourages all grant recipients

to provide a smoke-free workplace and promote the nonuse of all tobacco

products, and Public Law 103-227, the Pro-Children Act of 1994,

prohibits smoking in certain facilities that receive Federal funds in

which education, library, day care, health care, and early childhood

development services are provided to children.

Application Requests

Requests for application materials and questions regarding program

information and business should be directed to: Lafayette Gilchrist,

Division of Disadvantaged Assistance, Bureau of Health Professions,

Health Resources and Services Administration, 5600 Fishers Lane, Room

8A-09, Rockville, Maryland 20857, Telephone: (301) 443-3680, FAX: (301)

443-5242.

Completed applications should be returned to the address listed

above. The application deadline date is June 30, 1996. Applications

shall be considered to be ``on time'' if they are either:

(1) Received on or before the established deadline date, or

(2) Sent on or before the established deadline date and received in

time for orderly processing. (Applicants should request a legibly dated

U.S. Postal Service postmark or obtain a legibly dated receipt from a

commercial carrier or U.S. Postal Service. Private metered postmarks

shall not be acceptable as proof of timely mailing.)

Late applications not accepted for processing will be returned to

the applicant.

The application form and instructions for this program have been

approved by the Office of Management and Budget (OMB) under the

Paperwork Reduction Act. The OMB clearance number is 0915- 0150.

The Disadvantaged Health Professions Faculty Loan Repayment Program

is listed at 93.923 in the Catalog of Federal Domestic Assistance. It

is not subject to the provisions of Executive Order 12372,

Intergovernmental Review of Federal Programs (as implemented through 45

CFR part 100).

This program is not subject to the Public Health System Reporting

Requirements.

Dated: January 25, 1996.

Ciro V. Sumaya,

Administrator.

[FR Doc. 96-1978 Filed 1-31-96; 8:45 am]

BILLING CODE 4160-15-P