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§ 22-2212-A. Loan guarantor program

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 24 P.S. EducationEffective: October 30, 2001

Purdon's Pennsylvania Statutes and Consolidated Statutes
Title 24 P.S. Education
Chapter 1. Public School Code of 1949 (Refs & Annos)
Article XXII-a. Medical Education Loan Assistance
Subarticle (b). Program
Effective: October 30, 2001
24 P.S. § 22-2212-A
§ 22-2212-A. Loan guarantor program
(a) Establishment of program.--The agency shall administer a loan guarantor program on a Statewide basis. The agency shall utilize funds in the Medical School Loan Account to encourage eligible applicants to attend an accredited medical college or an approved institution of higher learning.
(b) Loan Guarantor Program.--The Loan Guarantor Program shall provide for the following:
(1) Life of loan servicing.
(2) Contracting for insurance with a guarantor, approved by the agency, which offers a low-cost loan with competitive interest rates and loan fees to eligible applicants.
(3) Predetermining the eligibility of applicants who receive a loan from an offeror to attend an accredited medical school or an approved institution of higher learning that is insured by a guarantor.
(4) Evaluating the benefit package of a guarantor for adequacy, accessibility and availability of funds necessary to provide adequate loss prevention.
(c) Low-cost loans.--An eligible applicant shall apply to an offeror for a low-cost loan to attend an accredited medical college or an approved institution of higher learning. A low-cost loan made under this subsection shall be guaranteed by an approved guarantor through a contract with the agency. Low-cost loans made under this subsection shall provide reduced interest rates and loan fees to eligible applicants compared to loans made for the same purpose that are not guaranteed by this article.
(d) Loan requirements.--Loans provided under this section shall cover up to 100% of the actual cost of tuition, room and board at an accredited medical college or an approved institution of higher learning and the actual cost of course-required textbooks and supplies for the recipient.
(e) Default.--If a recipient fails to repay a loan received under this section, the agency shall collect the loan pursuant to one of the following:
(1) Section 4.3 of the act of August 7, 1963 (P.L. 549, No. 290),1 referred to as the Pennsylvania Higher Education Assistance Agency Act.
(2) A process established by the applicable guarantors.
(3) Any other collection procedure or process deemed appropriate by the agency.
(f) Medical Education Loan Loss Account.--An account is hereby established within the agency to receive funds appropriated for purposes of this section. Moneys in the account are hereby appropriated to the agency to provide the loan guarantor program. When funds in the account are expended, no additional loans shall be offered.
(g) Interest rate reduction.--The agency or an offeror may modify loans under this section to further reduce interest rates as follows:
(1) The agency or the offeror may reduce the interest rate of the loan by not less than 1% if the loan recipient, upon completion of a graduate degree in biomedicine or life sciences or upon licensure as a physician, agrees to practice medicine or be employed to conduct research on a full-time basis in Pennsylvania for a period of three consecutive years.
(2) The agency or the offeror may reduce the interest rate of the loan by not less than 2% if the loan recipient, upon licensure as a physician, agrees to practice medicine for not less than three consecutive years in a designated area.
(h) Contract.--In addition to the requirements of subsection (g), in order to be eligible for an interest rate reduction, a loan recipient shall enter into a contract with the agency or an offeror or its assigns at the time the loan is made. The contract shall include the following:
(1) The loan recipient practicing in a designated area shall agree to treat patients eligible for medical assistance and Medicare.
(2) The loan recipient shall permit the agency or the offeror to monitor the recipient's practice or employment to determine compliance with the terms of the contract and this article.
(3) The agency shall certify compliance with the terms of the contract.
(4) Upon the loan recipient's death or total or permanent disability, the agency or the offeror shall nullify the service obligation of the recipient.
(5) If the loan recipient is convicted of or pleads guilty or no contest to a felony or if the licensing board has determined that the recipient has committed an act of gross negligence in the performance of service obligations or has suspended or revoked the license to practice, the agency or the offeror shall terminate the loan recipient's participation in the program and seek repayment of the amount of the loan on the date of the conviction, determination, suspension or revocation.
(6) A loan recipient who fails to comply with a contract shall pay to the agency or the offeror the amount of loan received under the original contract as of the time of default. Providing false information or misrepresentation on an application or verification of service shall constitute default.
(i) Accountability.--In July 2004, the agency shall conduct a performance review of the program and services provided. The performance review shall include the following:
(1) The goals and objectives of the program.
(2) A determination of whether the goals and objectives were achieved by the agency-participating guarantor and offeror.
(3) The specific methodology used to evaluate the results.
(4) Recommendations for improvement.

Credits

1949, March 10, P.L. 30, No. 14, art. XXII-A, § 2212-A, added 2001, Oct. 30, P.L. 828, No. 83, § 3, imd. effective.

Footnotes

24 P.S. § 5104.3.
24 P.S. § 22-2212-A, PA ST 24 P.S. § 22-2212-A
Current through Act 13 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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