‘‘(A) 
DETERMINATION
OF
INTEREST 
RATE.—Subject to subparagraph (B), the appli-
cable rate of interest for a loan under this sec-
tion, during any 12-month period beginning on 
July 1 and ending on June 30 shall be deter-
mined on the preceeding June 1 and be equal 
to— 
‘‘(i) the bond equivalent rate of 91- 
day Treasury bills auctioned at the first 
auction held prior to such June 1; plus 
‘‘(ii) 3.1 percent. 
‘‘(B) MAXIMUM INTEREST RATE.—A rate 
of interest determined under subparagraph (A) 
shall not exceed 8.25 percent. 
‘‘(C) INTEREST
RATE
DISCOUNTS.—The 
Secretary may prescribe by regulation such re-
ductions in the interest rate paid by an eligible 
health care provider for a loan under subsection 
(a) as the Secretary determines appropriate to 
encourage on-time repayment of the loan. Such 
reductions may be offered only if the Secretary 
determines the reductions are cost neutral and 
in the best financial interest of the Federal 
Government.
‘‘(4) ORIGINATION FEES.—The Secretary shall 
charge an eligible health care provider who receives 
a loan under subsection (a) an origination fee of 4 
percent of the principal amount of loan and, if appli-
cable, a fee for loan insurance. 
‘‘(g) REPAYMENT OF LOANS.— 
‘‘(1) REPAYMENT PLANS.— 
‘‘(A) DESIGN AND SELECTION.— 
‘‘(i) IN
GENERAL.—Consistent with 
criteria established by the Secretary, the 
Secretary shall offer an eligible health care 
provider who receives a loan under the 
Loan Program (and the provider may 
choose one of) the plans for repayment of 
such loan, including repayment of principal 
and interest on such loan, described in 
clause (ii). Such criteria shall be different 
for eligible health care providers that are 
physicians or medical groups, or that are 
DSH qualifying facilities described in 
clause 
(iii) 
or 
(iv) 
of 
section 
1150A(j)(3)(B), in order to take into ac-
count the different financial ability of such 
providers to repay loans made. The Sec-
retary shall allow the provider to accel-
erate, without penalty, repayment on the 
loans involved. 
‘‘(ii) REPAYMENT PLANS.—The plans 
described in this clause are the following: 
‘‘(I) 
STANDARD
REPAYMENT 
PLAN.—A standard repayment plan, 
with annual payment amount paid 
over a fixed period of time. 
‘‘(II) INCOME
CONTINGENT
RE-
PAYMENT PLAN.—An income contin-
gent repayment plan, with varying 
monthly payment amounts based on 
the income of the eligible health care 
provider involved, paid over an ex-
tended period of time prescribed by 
the Secretary, not to exceed 25 years. 
‘‘(B) SELECTION
BY
SECRETARY.—If an 
eligible health care provider that receives a loan 
under the Loan Program does not select a re-
payment plan for such loan described in sub-
paragraph (A)(ii), the Secretary shall select the 
repayment plan described in subclause (I) of 
such subsection. 
‘‘(C) CHANGES IN SELECTION.—An eligible 
health care provider that receives a loan under
the Loan Program may change the selection of 
such provider of a repayment plan under sub-
paragraph (A)(ii), or the Secretary’s selection 
of a plan for the provider under subparagraph 
(B), as the case may be, under such terms and 
conditions as may be established by the Sec-
retary. 
‘‘(D) ALTERNATIVE REPAYMENT PLANS.— 
The Secretary may provide, on a case by case 
basis, an alternative repayment plan to an eligi-
ble health care provider that receives a loan 
under the Loan Program who demonstrates to 
the satisfaction of the Secretary that the terms 
and conditions of the repayment plans available 
under subparagraph (A)(ii) are not adequate to 
accommodate an exceptional circumstance of 
the provider. In designing such an alternative 
repayment plan, the Secretary shall ensure that 
such plan does not exceed the cost to the Fed-
eral Government, as determined on the basis of 
the present value of future payments by such 
providers, of loans made using the plans avail-
able under subparagraph (A)(ii). 
‘‘(2) REPAYMENT RELIEF.—
‘‘(A) REQUIRED PROGRAM FOR LOAN FOR-
GIVENESS.—The Secretary shall, in accordance 
with guidelines specified by the Secretary, es-
tablish a program for the forgiveness of a loan 
provided under the Loan Program to an eligible 
health care provider that is— 
‘‘(i) a physician or medical group that 
serves a medically underserved population, 
as defined in section 330(a)(3) of the Pub-
lic Health Service Act; or 
‘‘(ii) a participant in the National 
Health Service Corps Loan Repayment 
Program under section 338B of such Act. 
‘‘(B) AUTHORITY
FOR
ADDITIONAL
RE-
LIEF.—The Secretary may, in accordance with 
guidelines specified by the Secretary, provide 
for the deferment, forbearance, consolidation, 
discharge, or forgiveness of another loan pro-
vided under the Loan Program. 
‘‘(3) LOAN DEFAULT.— 
‘‘(A) TERMS
OF
DEFAULT.—An eligible 
health care provider that receives a loan under 
subsection (a) has defaulted on such loan if— 
‘‘(i) the provider fails to make a pay-
ment amount for the loan by the date re-