US Code

Public Law 119-73 (01/23/2026)

42 U.S.C. § 254p

Special loans for former Corps members to enter private practice

(a)

Persons entitled; conditions

section 254k of this titleThe Secretary may, out of appropriations authorized under , make one loan to a Corps member who has agreed in writing—
(1)
section 254e of this title to engage in the private full-time clinical practice of the profession of the member in a health professional shortage area (designated under ) for a period of not less than 2 years which—
(A)
in the case of a Corps member who is required to complete a period of obligated service under this subpart, begins not later than 1 year after the date on which such individual completes such period of obligated service; and
(B)
in the case of an individual who is not required to complete a period of obligated service under this subpart, begins at such time as the Secretary considers appropriate;
(2)
section 254n(b)(1) of this title to conduct such practice in accordance with ; and
(3)
to such additional conditions as the Secretary may require to carry out this section.
Such a loan shall be used to assist such individual in meeting the costs of beginning the practice of such individual’s profession in accordance with such agreement, including the costs of acquiring equipment and renovating facilities for use in providing health services, and of hiring nurses and other personnel to assist in providing health services. Such loan may not be used for the purchase or construction of any building.
(b)

Amount of loan; maximum interest rate

(1)
The amount of a loan under subsection (a) to an individual shall not exceed $25,000.
(2)
The interest rate for any such loan shall not exceed an annual rate of 5 percent.
(c)

Application for loan; submission and approval; interest rates and repayment terms

The Secretary may not make a loan under this section unless an application therefor has been submitted to, and approved by, the Secretary. The Secretary shall, by regulation, set interest rates and repayment terms for loans under this section.

(d)

Breach of agreement; notice; determination of liability

If the Secretary determines that an individual has breached a written agreement entered into under subsection (a), he shall, as soon as practicable after making such determination, notify the individual of such determination. If within 60 days after the date of giving such notice, such individual is not practicing his profession in accordance with the agreement under such subsection and has not provided assurances satisfactory to the Secretary that he will not knowingly violate such agreement again, the United States shall be entitled to recover from such individual—
(1)
o in the case of an individual who has received a grant under this section (as in effect prior to ), an amount determined under section 254(b) of this title, except that in applying the formula contained in such section “ϕ” shall be the sum of the amount of the grant made under subsection (a) to such individual and the interest on such amount which would be payable if at the time it was paid it was a loan bearing interest at the maximum legal prevailing rate, “t” shall be the number of months that such individual agreed to practice his profession under such agreement, and “s” shall be the number of months that such individual practices his profession in accordance with such agreement; and
(2)
in the case of an individual who has received a loan under this section, the full amount of the principal and interest owed by such individual under this section.

July 1, 1944, ch. 373Pub. L. 94–484, title IV, § 408(b)(1)90 Stat. 2287Pub. L. 97–35, title XXVII, § 2709(a)95 Stat. 908Pub. L. 97–414, § 8(g)(3)96 Stat. 2061Pub. L. 100–177, title II, § 201(2)101 Stat. 992Pub. L. 101–597, title II, § 204104 Stat. 3027(, title III, § 338G, formerly title VII, § 755, as added , , ; renumbered § 338E and amended , (f), , , 911; , , ; renumbered § 338F and amended , title III, § 309, , , 1006; renumbered § 338G and amended , title IV, § 401(b)[(a)], , , 3035.)

Editorial Notes

Codification

section 294x of this titlePub. L. 97–35Section was formerly classified to prior to renumbering by .

Prior Provisions

Pub. L. 101–597section 254q of this titleA prior section 338G of act , was renumbered section 338H by and is classified to .

section 201(1) of Pub. L. 100–177section 254r of this titlePub. L. 100–713, title I, § 104(b)(1)102 Stat. 4787Another prior section 338G of act , was renumbered section 338I by and classified to , prior to repeal by , , .

section 254q of this titlePub. L. 100–177, title II, § 203101 Stat. 999Another prior section 338G of act , was classified to prior to repeal by , , .

Amendments

Pub. L. 101–597, § 401(b)[(a)]1990—Subsec. (a)(1). , substituted reference to health professional shortage area for reference to health manpower shortage area.

Pub. L. 100–177, § 309(1)1987—Subsec. (a). , substituted subsec. (a) consisting of pars. (1) to (3) for former subsec. (a) consisting of pars. (1) and (2).

Pub. L. 100–177, § 309(1)Subsec. (b). , added subsec. (b) and struck out former subsec. (b) which read as follows: “The amount of the grant or loan under subsection (a) of this section to an individual shall be—

“(1) $12,500 if the individual agrees to practice his profession in accordance with the agreement for a period of at least one year, but less than two years; or

“(2) $25,000 if the individual agrees to practice his profession in accordance with the agreement for a period of at least two years.”

Pub. L. 100–177, § 309(2)Subsec. (c). , struck out “grant or” before “loan” in first sentence.

Pub. L. 100–177, § 309(3)oSubsec. (d)(1). , substituted “under this section (as in effect prior to )” for “under this section”, and made technical amendment to reference to section 254(b) of this title to reflect renumbering of corresponding section of original act.

Pub. L. 97–414oo1983—Subsec. (d)(1). substituted “section 254(b)” for “section 254(c)”.

Pub. L. 97–35, § 2709(f)(2)section 254k of this titlesection 294v of this title1981—Subsec. (a). –(4), made numerous changes to reflect renumbering of subpart sections, among them inserting references to and striking out references to , and added applicability to loans.

Pub. L. 97–35, § 2709(f)(5)Subsec. (b). , inserted applicability to loans.

Pub. L. 97–35, § 2709(f)(6)Subsec. (c). , inserted provisions relating to loans and interest rates, etc.

Pub. L. 97–35, § 2709(f)(7)Subsec. (d). , restructured and revised criteria determining amount of liability of individual within 60 days after the date of notice instead of within 120 days after the date of notice.

Statutory Notes and Related Subsidiaries

Effective Date

section 408(b)(1) of Pub. L. 94–484lSection effective , see , set out in part as a note under section 254 of this title.

Effective Date; Savings Provision; Credit for Period of Internship or Residency Before , Towards Service Obligation

section 408(b)(2) of Pub. L. 94–484lSee , set out as a note under section 254 of this title.