Page:United States Statutes at Large Volume 77.djvu/203

 77 STAT. ]

PUBLIC LAW 88-129-SEPT. 24, 1963

171

(as defined in section 724) which is located in a State and is accredited as provided in section 721(b)(1)(B). " (b) Each agreement entered into under this section shall— "(1) provide for establisliment of a student loan fund by the school; "(2) provide for deposit in the fund of (A) the amounts allocated under this part to the school by the Secretary, (B) an additional amount from other sources equal to not less than oneninth of amounts deposited pursuant to clause (A), (C) collections of principal and interest on loans made from the fund, and (D) any other earnings of the fund; "(3) provide that the fund shall be used only for loans to students of the school in accordance with the agreement and for costs of collection of such loans and interest thereon; "(4) provide that loans may be made from such fund only to students pursuing a full-time course of study at the school leading to a degree of doctor of medicine, doctor of dentistry or an equivalent degree, or doctor of osteopathy, and that while the agreement remains in effect no such student who has attended such school before July 1, 1966, shall receive a loan from a loan fund established under section 204 of the National Defense Education 72 Stat. iss.*. Act of 1958; and 20 USC 424. "(5) contain such other provisions as are necessary to protect the financial interests of the United States. "LOAN PROVISIONS

"SEC. 741. (a) Loans from a loan fund established under this part may not exceed $2,000 for any student for any academic year or its equivalent. I n the granting of such loans, a school shall give preference to persons who enter as first-year students after June 30, 1963. "(b) Any such loans shall be made on such terms and conditions as the school may determine, but may be made only to a student in need of the amount thereof to pursue a full-time course of study at the school leading to a degree of doctor of medicine, doctor of dentistry or an equivalent degree, or doctor of osteopathy. " (c) Such loans shall be repayable in equal or graduated periodic installments (with the right of the borrower to accelerate repayment) over the ten-year period which begins three years after the student <jeases to pursue a full-time course of study at a school of medicine, osteopathy, or dentistry, excluding from such ten-year period all periods (up to three years) of (1) active duty performed by the borrower as a member of a uniformed service, or (2) service as a volunteer under the Peace Corps Act. 75 Stat. ei 2. " (d) The liability to repay the unpaid balance of such a loan and ^J^ use 2501 accrued interest thereon shall be canceled upon the death of the note. borrower, or if the Secretary determines that he has become permanently and totally disabled. "(e) Such loans shall bear interest, on the unpaid balance of the loan, computed only for periods during which the loan is repayable, at the rate of 3 per centum per annum, or the going Federal rate at the time the loan is made, whichever rate is the greater. For purposes of this subsection, the term 'going Federal rate' means the rate of interest which the Secretary of the Treasury specifies during June of each year for purposes of loans made during the fiscal year beginning on the next July 1, determined by estimating the average yield to maturity, on the basis of daily closing market quotations or prices during the preceding May on all outstanding marketable obligations of the United States having a maturity date of fifteen or more years from the first day of such month of May, and by rounding off such

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