102 STAT. 3164

PUBLIC LAW 100-607—NOV. 4, 1988

the United States in an amount equal to 100 percent of the
principal and interest due on the loan.
"(d) certain requirements with respect to health care
facilities.—The Secretary may not make a loan under subsection
(a) unless, with respect to contracts referred to in such subsection—
"(1) the applicant for the loan has entered into such a con-
tract with a health care facility that is a nonprofit hospital or a
long-term care facility certified under title XVIII or XIX of the
Social Security Act;
"(2) such health care facility is located in a geographic area
that is underserved with respect to the services of nurses, as
designated pursuant to subsection (e);
"(3) the contract provides that the health care facility will
repay 100 percent of the principal and interest of the loan made
to the applicant under subsection (a);
"(4) the contract provides that, in serving as a nurse at the
health care facility, the payments made by the facility on behalf
of the applicant in repayment of the loan will be in addition to
the pay that the applicant would otherwise receive for such
service; and
"(5) the contract provides that, in the event the health care
facility violates the contract, the facility will be liable to the
United States in an amount equal to 100 percent of the prin-
cipal and interest due on such loan.
Regulations.	"(e) DESIGNATION OF UNDERSERVED GEOGRAPHIC AREAS.—For pur-
poses of subsection (d)(2), the Secretary shall through regulation
establish criteria for the designation of such areas. The Secretary
may, as appropriate, designate geographic areas using criteria in
section 330(b)(4).
"(f) maximum amount of loan.—The Secretary may not provide
a loan under subsection (a) in an amount exceeding 100 percent of
the costs described in subsection (cX2).
"(g) interest.—Loans awarded under this section shall bear in-
terest on the unpaid balance of the loan at a rate of 5 percent per
annum. Such interest shall accrue from the date the individual
involved is no longer enrolled in the nursing program.
Regulations.	"(h) WAIVER OR SUSPENSION OF STUDENT OBLIGATIONS.—The Sec-
retary shall by regulation provide for the waiver or suspension of
any obligation of any individual receiving a loan under subsection
(a) whenever compliance by the individual is impossible or would
involve extreme hardship to the individual.
"(i) requirement of application.—The Secretary may not make
a loan under subsection (a) unless—
"(1) an application for the loan is submitted to the Secretary;
"(2) with respect to carrying out the purpose for which the
loan is to be made, the application provides assurances of
compliance satisfactory to the Secretary; and
"(3) the application otherwise is in such form, is made in such
manner, and contains such agreements, assurances, and
information as the Secretary determines to be necessary to
carry out this section.
"(j) set-aside with respect to rural areas.—Of the amounts
appropriated for a fiscal year pursuant to subsection Q), the Sec-
retary shall make available not less than 35 percent for loans under
subsection (a) to individuals who will, pursuant to such loan, serve
as nurses in rural areas designated under subsection (e) as geo-