---
kind: "section"
citation: "42 U.S.C. § 297n"
title: "42"
title_heading: "The Public Health and Welfare"
number: "297n"
heading: "Loan repayment and scholarship programs"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/297n"
units:
  - "Chapter 6A — Public Health Service"
  - "Subchapter VI — Nursing Workforce Development"
  - "Part E — Student Loans"
---

# §297n. Loan repayment and scholarship programs

- (a) **In general—** In the case of any individual—
  - (1) who has received a baccalaureate or associate degree in nursing (or an equivalent degree), a diploma in nursing, or a graduate degree in nursing;
  - (2) who obtained (A) one or more loans from a loan fund established under subpart II,[^1] or (B) any other educational loan for nurse training costs; and
  - (3) who enters into an agreement with the [Secretary](/usc/42/201.md?p=c) to serve as nurse for a period of not less than two years at a health care facility with a critical shortage of nurses, or in a[^2] accredited [school](/usc/42/300j–21.md?p=6) of nursing, as defined by [section 296(2) of this title](/usc/42/296.md?p=2), as nurse faculty;

  the [Secretary](/usc/42/201.md?p=c) shall make payments in accordance with [subsection (b)](#b), for and on behalf of that individual, on the principal of and interest on any loan of that individual described in paragraph (2) of this subsection which is outstanding on the date the individual begins the [service](/usc/42/201.md?p=a) specified in the agreement described in paragraph (3) of this subsection.

- (b) **Manner of payments—** The payments described in [subsection (a)](#a) shall be made by the [Secretary](/usc/42/201.md?p=c) as follows:
  - (1) Upon completion by the individual for whom the payments are to be made of the first year of the [service](/usc/42/201.md?p=a) specified in the agreement entered into with the [Secretary](/usc/42/201.md?p=c) under [subsection (a)](#a), the [Secretary](/usc/42/201.md?p=c) shall pay 30 percent of the principal of, and the interest on each loan of such individual described in [subsection (a)(2)](#a-2) which is outstanding on the date the individual began such practice.
  - (2) Upon completion by that individual of the second year of such [service](/usc/42/201.md?p=a), the [Secretary](/usc/42/201.md?p=c) shall pay another 30 percent of the principal of, and the interest on each such loan.
  - (3) Upon completion by that individual of a third year of such [service](/usc/42/201.md?p=a), the [Secretary](/usc/42/201.md?p=c) shall pay another 25 percent of the principal of, and the interest on each such loan.
- (c) **Payment by due date—** Notwithstanding the requirement of completion of practice specified in [subsection (b)](#b), the [Secretary](/usc/42/201.md?p=c) shall, on or before the due date thereof, pay any loan or loan installment which may fall due within the period of [service](/usc/42/201.md?p=a) for which the borrower may receive payments under this subsection, upon the declaration of such borrower, at such times and in such manner as the [Secretary](/usc/42/201.md?p=c) may prescribe (and supported by such other evidence as the [Secretary](/usc/42/201.md?p=c) may reasonably require), that the borrower is then serving as described by [subsection (a)(3)](#a-3), and that the borrower will continue to so serve for the period required (in the absence of this subsection) to entitle the borrower to have made the payments provided by this subsection for such period; except that not more than 85 percent of the principal of any such loan shall be paid pursuant to this subsection.
- (d) **Scholarship program—**
  - (1) **In general—** The [Secretary](/usc/42/201.md?p=c) shall (for fiscal years 2003 and 2004) and may (for fiscal years thereafter) carry out a [program](/usc/42/274l–1.md?p=4) of entering into contracts with eligible individuals under which such individuals agree to serve as nurses for a period of not less than 2 years at a health care facility with a critical shortage of nurses, in consideration of the Federal Government agreeing to provide to the individuals scholarships for attendance at [schools](/usc/42/300j–21.md?p=6) of nursing.
  - (2) **Eligible individuals—** In this subsection, the term “eligible individual” means an individual who is enrolled or accepted for enrollment as a full-time or part-time student in a [school](/usc/42/300j–21.md?p=6) of nursing.
  - (3) **Service requirement—**
    - (A) **In general—** The [Secretary](/usc/42/201.md?p=c) may not enter into a contract with an eligible individual under this subsection unless the individual agrees to serve as a nurse at a health care facility with a critical shortage of nurses for a period of full-time [service](/usc/42/201.md?p=a) of not less than 2 years, or for a period of part-time [service](/usc/42/201.md?p=a) in accordance with [subparagraph (B)](#d-3-B).
    - (B) **Part-time service—** An individual may complete the period of [service](/usc/42/201.md?p=a) described in [subparagraph (A)](#d-3-A) on a part-time basis if the individual has a written agreement that—
      - (i) is entered into by the facility and the individual and is approved by the [Secretary](/usc/42/201.md?p=c); and
      - (ii) provides that the period of obligated [service](/usc/42/201.md?p=a) will be extended so that the aggregate amount of [service](/usc/42/201.md?p=a) performed will equal the amount of [service](/usc/42/201.md?p=a) that would be performed through a period of full-time [service](/usc/42/201.md?p=a) of not less than 2 years.
  - (4) **Applicability of certain provisions—** The provisions of subpart III of part D of subchapter II shall, except as inconsistent with this section, apply to the [program](/usc/42/274l–1.md?p=4) established in [paragraph (1)](#d-1) in the same manner and to the same extent as such provisions apply to the National Health [Service](/usc/42/201.md?p=a) Corps Scholarship [Program](/usc/42/274l–1.md?p=4) established in such subpart.
- (e) **Preferences regarding participants—** In entering into agreements under subsection [(a)](#a) or [(d)](#d), the [Secretary](/usc/42/201.md?p=c) shall give preference to qualified applicants with the greatest financial need.
- (f) **Condition of agreement—** The [Secretary](/usc/42/201.md?p=c) may make payments under [subsection (a)](#a) on behalf of an individual only if the agreement under such subsection provides that section 298b–7(c)[^1] of this title is applicable to the individual.
- (g) **Breach of agreement—**
  - (1) **In general—** In the case of any [program](/usc/42/274l–1.md?p=4) under this section under which an individual makes an agreement to provide health [services](/usc/42/201.md?p=a) for a period of time in accordance with such [program](/usc/42/274l–1.md?p=4) in consideration of receiving an award of Federal funds regarding education as a nurse (including an award for the repayment of loans), the following applies if the agreement provides that this subsection is applicable:
    - (A) In the case of a [program](/usc/42/274l–1.md?p=4) under this section that makes an award of Federal funds for attending an accredited [program](/usc/42/274l–1.md?p=4) of nursing (in this section referred to as a “nursing [program](/usc/42/274l–1.md?p=4)”), the individual is liable to the Federal Government for the amount of such award (including amounts provided for expenses related to such attendance), and for interest on such amount at the maximum legal prevailing rate, if the individual—
      - (i) fails to maintain an acceptable level of academic standing in the nursing [program](/usc/42/274l–1.md?p=4) (as indicated by the [program](/usc/42/274l–1.md?p=4) in accordance with requirements established by the [Secretary](/usc/42/201.md?p=c));
      - (ii) is dismissed from the nursing [program](/usc/42/274l–1.md?p=4) for disciplinary reasons; or
      - (iii) voluntarily terminates the nursing [program](/usc/42/274l–1.md?p=4).
    - (B) The individual is liable to the Federal Government for the amount of such award (including amounts provided for expenses related to such attendance), and for interest on such amount at the maximum legal prevailing rate, if the individual fails to provide health [services](/usc/42/201.md?p=a) in accordance with the [program](/usc/42/274l–1.md?p=4) under this section for the period of time applicable under the [program](/usc/42/274l–1.md?p=4).
  - (2) **Waiver or suspension of liability—** In the case of an individual or health facility making an agreement for purposes of [paragraph (1)](#g-1), the [Secretary](/usc/42/201.md?p=c) shall provide for the waiver or suspension of liability under such subsection if compliance by the individual or the health facility, as the case may be, with the agreements involved is impossible, or would involve extreme hardship to the individual or facility, and if enforcement of the agreements with respect to the individual or facility would be unconscionable.
  - (3) **Date certain for recovery—** Subject to [paragraph (2)](#g-2), any amount that the Federal Government is entitled to recover under [paragraph (1)](#g-1) shall be paid to the United States not later than the expiration of the 3-year period beginning on the date the United States becomes so entitled.
  - (4) **Availability—** Amounts recovered under [paragraph (1)](#g-1) with respect to a [program](/usc/42/274l–1.md?p=4) under this section shall be available for the purposes of such [program](/usc/42/274l–1.md?p=4), and shall remain available for such purposes until expended.
- (h) **Reports—** Not later than 18 months after August 1, 2002, and annually thereafter, the [Secretary](/usc/42/201.md?p=c) shall prepare and submit to the Congress a report describing the [programs](/usc/42/274l–1.md?p=4) carried out under this section, including statements regarding—
  - (1) the number of enrollees, scholarships, loan repayments, and grant recipients;
  - (2) the number of graduates;
  - (3) the amount of scholarship payments and loan repayments made;
  - (4) which educational institution the recipients attended;
  - (5) the number and [placement](/usc/42/300gg–91.md?p=d-12) location of the scholarship and loan repayment recipients at health care facilities with a critical shortage of nurses;
  - (6) the default rate and actions required;
  - (7) the amount of outstanding default funds of both the scholarship and loan repayment [programs](/usc/42/274l–1.md?p=4);
  - (8) to the extent that it can be determined, the reason for the default;
  - (9) the demographics of the individuals participating in the scholarship and loan repayment [programs](/usc/42/274l–1.md?p=4);
  - (10) justification for the [allocation](/usc/42/2021b.md?p=2) of funds between the scholarship and loan repayment [programs](/usc/42/274l–1.md?p=4); and
  - (11) an evaluation of the overall costs and benefits of the [programs](/usc/42/274l–1.md?p=4).
- (i) **Allocations—** Of the amounts appropriated under [section 298d(b) of this title](/usc/42/298d.md?p=b),,[^3] the [Secretary](/usc/42/201.md?p=c) may, as determined appropriate by the [Secretary](/usc/42/201.md?p=c), allocate amounts between the [program](/usc/42/274l–1.md?p=4) under [subsection (a)](#a) and the [program](/usc/42/274l–1.md?p=4) under [subsection (d)](#d).

## Footnotes

[^1]: See References in Text note below.
[^2]: So in original. Probably should be “an”.
[^3]: So in original.

## Source credit

(July 1, 1944, ch. 373, title VIII, § 846, as added Pub. L. 102–408, title II, § 211(a)(3), Oct. 13, 1992, 106 Stat. 2078; amended Pub. L. 105–392, title I, § 133(d), Nov. 13, 1998, 112 Stat. 3576; Pub. L. 107–205, title I, § 103, Aug. 1, 2002, 116 Stat. 813; Pub. L. 111–148, title V, § 5310(a), Mar. 23, 2010, 124 Stat. 631; Pub. L. 116–136, div. A, title III, § 3404(a)(8), Mar. 27, 2020, 134 Stat. 394.)

## Notes

### Editorial Notes

### References in Text

Subpart II, referred to in subsec. (a)(2), probably should be “this part” to reflect the redesignation of subpart II of former part B of this subchapter as part E of this subchapter by Pub. L. 105–392, title I, § 123(2), Nov. 13, 1998, 112 Stat. 3562.

Section 298b–7(c) of this title, referred to in subsec. (f), was repealed by Pub. L. 105–392, title I, § 123(1), Nov. 13, 1998, 112 Stat. 3562.

### Prior Provisions

A prior section 297n, act July 1, 1944, ch. 373, title VIII, § 847, as added Nov. 4, 1988, Pub. L. 100–607, title VII, § 716, 102 Stat. 3163; amended Nov. 18, 1988, Pub. L. 100–690, title II, § 2616(b), 102 Stat. 4240, established a demonstration program for student loans with respect to service in certain health care facilities in underserved areas, prior to repeal by Pub. L. 102–408, title II, § 210, Oct. 13, 1992, 106 Stat. 2078.

A prior section 846 of act July 1, 1944, was classified to section 297k of this title and was repealed by Pub. L. 97–35.

### Amendments

2020—Subsec. (a). Pub. L. 116–136, § 3404(a)(8)(A), struck out at end of concluding provisions “After fiscal year 2007, the Secretary may not, pursuant to any agreement entered into under this subsection, assign a nurse to any private entity unless that entity is nonprofit.”

Subsec. (b)(1). Pub. L. 116–136, § 3404(a)(8)(B), substituted “the individual began such practice” for “he began such practice”.

Subsec. (i). Pub. L. 116–136, § 3404(a)(8)(C), substituted “Allocations” for “Funding” in heading, struck out par. (1) and par. (2) designation and heading, and substituted “Of the amounts appropriated under section 298d(b) of this title,” for “Of the amounts appropriated under paragraph (1)”. Prior to amendment, text of par. (1) read as follows: “For the purpose of payments under agreements entered into under subsection (a) or (d), there are authorized to be appropriated such sums as may be necessary for each of fiscal years 2003 through 2007.”

2010—Subsec. (a)(3). Pub. L. 111–148 inserted “, or in a accredited school of nursing, as defined by section 296(2) of this title, as nurse faculty” before semicolon at end.

2002—Pub. L. 107–205, § 103(b)(1), substituted “Loan repayment and scholarship programs” for “Loan repayment program” in section catchline.

Subsec. (a). Pub. L. 107–205, § 103(a)(2), inserted at end of concluding provisions “After fiscal year 2007, the Secretary may not, pursuant to any agreement entered into under this subsection, assign a nurse to any private entity unless that entity is nonprofit.”

Subsec. (a)(3). Pub. L. 107–205, § 103(a)(1), substituted “at a health care facility with a critical shortage of nurses” for “in an Indian Health Service health center, in a Native Hawaiian health center, in a public hospital, in a migrant health center, in a community health center, in a rural health clinic, or in a public or nonprofit private health facility determined by the Secretary to have a critical shortage of nurses”.

Subsec. (d). Pub. L. 107–205, § 103(b)(4), added subsec. (d). Former subsec. (d) redesignated (f).

Subsec. (e). Pub. L. 107–205, § 103(c), substituted “under subsection (a) or (d), the Secretary shall give preference to qualified applicants with the greatest financial need.” for “under subsection (a), the Secretary shall give preference—

“(1) to qualified applicants with the greatest financial need; and

“(2) to qualified applicants that, with respect to health facilities described in such subsection, agree to serve in such health facilities located in geographic areas with a shortage of and need for nurses, as determined by the Secretary.”

Subsec. (f). Pub. L. 107–205, § 103(b)(2), (3), redesignated subsec. (d) as (f) and transferred it to appear after subsec. (e). Former subsec. (f) redesignated (h).

Subsec. (g). Pub. L. 107–205, § 103(b)(2), (3), redesignated subsec. (h) as (g) and transferred it to appear after subsec. (f). Former subsec. (g) redesignated (i).

Subsec. (h). Pub. L. 107–205, § 103(b)(2), (d), redesignated subsec. (f) as (h) and amended it generally. Prior to amendment, text of subsec. read as follows: “For purposes of this section:

“(1) The term ‘community health center’ has the meaning given such term in section 254c(a) of this title.

“(2) The term ‘migrant health center’ has the meaning given such term in section 254b(a)(1) of this title.

“(3) The term ‘rural health clinic’ has the meaning given such term in section 1395x(aa)(2) of this title.”

Former subsec. (h) redesignated (g).

Subsec. (i). Pub. L. 107–205, § 103(b)(2), (e), redesignated subsec. (g) as (i) and amended it generally. Prior to amendment, text of subsec. read as follows: “For the purpose of payments under agreements entered into under subsection (a) of this section, there are authorized to be appropriated $5,000,000 for fiscal year 1993, and $6,000,000 for fiscal year 1994.”

1998—Subsec. (h). Pub. L. 105–392 added subsec. (h).

### Statutory Notes and Related Subsidiaries

### Reference to Community, Migrant, Public Housing, or Homeless Health Center Considered Reference to Health Center

Reference to community health center, migrant health center, public housing health center, or homeless health center considered reference to health center, see section 4(c) of Pub. L. 104–299, set out as a note under section 254b of this title.