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text: §254 l . National Health Service Corps Scholarship Program (a) Establishment The Secretary shall establish the National Health Service Corps Scholarship Program to assure, with respect to the provision of primary health services pursuant to section 254d(a)(2) of this title— (1) an adequate supply of physicians, dentists, behavioral and mental health professionals, certified nurse midwives, certified nurse practitioners, and physician assistants; and (2) if needed by the Corps, an adequate supply of other health professionals. (b) Eligibility; application; written contract To be eligible to participate in the Scholarship Program, an individual must— (1) be accepted for enrollment, or be enrolled, as a full-time student (A) in an accredited (as determined by the Secretary) educational institution in a State and (B) in a course of study or program, offered by such institution and approved by the Secretary, leading to a degree in medicine, osteopathic medicine, dentistry, or other health profession, or an appropriate degree from a graduate program of behavioral and mental health; (2) be eligible for, or hold, an appointment as a commissioned officer in the Regular or Reserve Corps 1 of the Service or be eligible for selection for civilian service in the Corps; (3) submit an application to participate in the Scholarship Program; and (4) sign and submit to the Secretary, at the time of submittal of such application, a written contract (described in subsection (f)) to accept payment of a scholarship and to serve (in accordance with this subpart) for the applicable period of obligated service in a health professional shortage area. (c) Review and evaluation of information and forms by prospective applicant (1) In disseminating application forms and contract forms to individuals desiring to participate in the Scholarship Program, the Secretary shall include with such forms— (A) a fair summary of the rights and liabilities of an individual whose application is approved (and whose contract is accepted) by the Secretary, including in the summary a clear explanation of the damages to which the United States is entitled under section 254o of this title in the case of the individual's breach of the contract; and (B) information respecting meeting a service obligation through private practice under an agreement under section 254n of this title and such other information as may be necessary for the individual to understand the individual's prospective participation in the Scholarship Program and service in the Corps, including a statement of all factors considered in approving applications for participation in the Program and in making assignments for participants in the Program. (2) The application form, contract form, and all other information furnished by the Secretary under this subpart shall be written in a manner calculated to be understood by the average individual applying to participate in the Scholarship Program. The Secretary shall make such application forms, contract forms, and other information available to individuals desiring to participate in the Scholarship Program on a date sufficiently early to insure that such individuals have adequate time to carefully review and evaluate such forms and information. (3)(A) The Secretary shall distribute to health professions schools materials providing information on the Scholarship Program and shall encourage the schools to disseminate the materials to the students of the schools. (B)(i) In the case of any health professional whose period of obligated service under the Scholarship Program is nearing completion, the Secretary shall encourage the individual to remain in a health professional shortage area and to continue providing primary health services. (ii) During the period in which a health professional is planning and making the transition to private practice from obligated service under the Scholarship Program, the Secretary may provide assistance to the professional regarding such transition if the professional is remaining in a health professional shortage area and is continuing to provide primary health services. (C) In the case of entities to which participants in the Scholarship Program are assigned under section 254f of this title, the Secretary shall encourage the entities to provide options with respect to assisting the participants in remaining in the health professional shortage areas involved, and in continuing to provide primary health services, after the period of obligated service under the Scholarship Program is completed. The options with respect to which the Secretary provides such encouragement may include options regarding the sharing of a single employment position in the health professions by 2 or more health professionals, and options regarding the recruitment of couples where both of the individuals are health professionals. (d) Factors considered in providing contracts; priorities (1) Subject to section 254f–1 of this title, in providing contracts under the Scholarship Program— (A) the Secretary shall consider the extent of the demonstrated interest of the applicants for the contracts in providing primary health services; (B) the Secretary, in considering applications from individuals accepted for enrollment or enrolled in dental school, shall consider applications from all individuals accepted for enrollment or enrolled in any accredited dental school in a State; and (C) may 2 consider such other factors regarding the applicants as the Secretary determines to be relevant to selecting qualified individuals to participate in such Program. (2) In providing contracts under the Scholarship Program, the Secretary shall give priority— (A) first, to any application for such a contract submitted by an individual who has previously received a scholarship under this section or under section 294z 3 of this title; (B) second, to any application for such a contract submitted by an individual who has characteristics that increase the probability that the individual will continue to serve in a health professional shortage area after the period of obligated service pursuant to subsection (f) is completed; and (C) third, subject to subparagraph (B), to any application for such a contract submitted by an individual who is from a disadvantaged background. (e) Commencement of participation in Scholarship Program; notice (1) An individual becomes a participant in the Scholarship Program only upon the Secretary's approval of the individual's application submitted under subsection (b)(3) and the Secretary's acceptance of the contract submitted by the individual under subsection (b)(4). (2) The Secretary shall provide written notice to an individual promptly upon the Secretary's approving, under paragraph (1), of the individual's participation in the Scholarship Program. (f) Written contract; contents The written contract (referred to in this subpart) between the Secretary and an individual shall contain— (1) an agreement that— (A) subject to paragraph (2), the Secretary agrees (i) to provide the individual with a scholarship (described in subsection (g)) in each such school year or years for a period of years (not to exceed four school years) determined by the individual, during which period the individual is pursuing a course of study described in subsection (b)(1)(B), and (ii) to accept (subject to the availability of appropriated funds for carrying out sections 254d through 254h and section 254j of this title) the individual into the Corps (or for equivalent service as otherwise provided in this subpart); and (B) subject to paragraph (2), the individual agrees— (i) to accept provision of such a scholarship to the individual; (ii) to maintain enrollment in a course of study described in subsection (b)(1)(B) until the individual completes the course of study; (iii) while enrolled in such course of study, to maintain an acceptable level of academic standing (as determined under regulations of the Secretary by the educational institution offering such course of study); (iv) if pursuing a degree from a school of medicine or osteopathic medicine, to complete a residency in a specialty that the Secretary determines is consistent with the needs of the Corps; and (v) to serve for a time period (hereinafter in the subpart referred to as the "period of obligated service") equal to— (I) one year for each school year for which the individual was provided a scholarship under the Scholarship Program, or (II) two years, whichever is greater, as a provider of primary health services in a health professional shortage area (designated under section 254e of this title) to which he is assigned by the Secretary as a member of the Corps, or as otherwise provided in this subpart; (2) a provision that any financial obligation of the United States arising out of a contract entered into under this subpart and any obligation of the individual which is conditioned thereon, is contingent upon funds being appropriated for scholarships under this subpart and to carry out the purposes of sections 254d through 254h and sections 254j and 254k of this title; (3) a statement of the damages to which the United States is entitled, under section 254o of this title, for the individual's breach of the contract; and (4) such other statements of the rights and liabilities of the Secretary and of the individual, not inconsistent with the provisions of this subpart. (g) Scholarship provisions; contract with educational institution; increase in monthly stipend (1) A scholarship provided to a student for a school year under a written contract under the Scholarship Program shall consist of— (A) payment to, or (in accordance with paragraph (2)) on behalf of, the student of the amount (except as provided in section 292k 3 of this title) of— (i) the tuition of the student in such school year; and (ii) all other reasonable educational expenses, including fees, books, and laboratory expenses, incurred by the student in such school year; and (B) payment to the student of a stipend of $400 per month (adjusted in accordance with paragraph (3)) for each of the 12 consecutive months beginning with the first month of such school year. (2) The Secretary may contract with an educational institution, in which a participant in the Scholarship Program is enrolled, for the payment to the educational institution of the amounts of tuition and other reasonable educational expenses described in paragraph (1)(A). Payment to such an educational institution may be made without regard to section 3324(a) and (b) of title 31. (3) The amount of the monthly stipend, specified in paragraph (1)(B) and as previously adjusted (if at all) in accordance with this paragraph, shall be increased by the Secretary for each school year ending in a fiscal year beginning after September 30, 1978, by an amount (rounded to the next highest multiple of $1) equal to the amount of such stipend multiplied by the overall percentage (under section 5303 of title 5) of the adjustment (if such adjustment is an increase) in the rates of pay under the General Schedule made effective in the fiscal year in which such school year ends. (h) Employment ceiling of Department unaffected Notwithstanding any other provision of law, individuals who have entered into written contracts with the Secretary under this section, while undergoing academic training, shall not be counted against any employment ceiling affecting the Department. (July 1, 1944, ch. 373, title III, §338A, formerly title VII, §751, as added Pub. L. 94–484, title IV, §408(b)(1), Oct. 12, 1976, 90 Stat. 2281; amended Pub. L. 95–215, §5, Dec. 19, 1977, 91 Stat. 1506; Pub. L. 95–623, §12(c), Nov. 9, 1978, 92 Stat. 3457; Pub. L. 95–626, title I, §113(b), Nov. 10, 1978, 92 Stat. 3563; Pub. L. 96–32, §7(i), July 10, 1979, 93 Stat. 84; renumbered §338A and amended Pub. L. 97–35, title XXVII, §2709(a), (b), Aug. 13, 1981, 95 Stat. 908; Pub. L. 99–129, title II, §210(b), Oct. 22, 1985, 99 Stat. 537; Pub. L. 100–607, title VI, §629(a)(2), Nov. 4, 1988, 102 Stat. 3146; Pub. L. 101–509, title V, §529 [title I, §101(b)(4)(K)], Nov. 5, 1990, 104 Stat. 1427, 1440; Pub. L. 101–597, title II, §201, title IV, §401(b)[(a)], Nov. 16, 1990, 104 Stat. 3021, 3035; Pub. L. 107–251, title III, §309, Oct. 26, 2002, 116 Stat. 1649; Pub. L. 108–163, §2(j), Dec. 6, 2003, 117 Stat. 2022.) Editorial Notes References in Text Section 294z of this title, referred to in subsec. (d)(2)(A), was omitted in the general revision of subchapter V of this chapter by Pub. L. 102–408, title I, §102, Oct. 13, 1992, 106 Stat. 1994. Section 292k of this title, referred to in subsec. (g)(1)(A), was in the original a reference to section 711 of act July 1, 1944. Section 711 of that Act was renumbered as section 710 by Pub. L. 97–35, title XXVII, §2720(b), Aug. 13, 1981, 95 Stat. 915, and subsequently omitted in the general revision of subchapter V of this chapter by Pub. L. 102–408, title I, §102, Oct. 13, 1992, 106 Stat. 1994. Pub. L. 102–408 enacted a new section 710 of act July 1, 1944, relating to insurance accounts, a new section 711, relating to powers and responsibilities of the Secretary, and a new section 712, relating to participation by Federal credit unions, which are classified to sections 292i, 292j, and 292k, respectively, of this title. The General Schedule, referred to in subsec. (g)(3), is set out under section 5332 of Title 5, Government Organization and Employees. Codification In subsec. (g)(2), "section 3324(a) and (b) of title 31" substituted for "section 3648 of the Revised Statutes (31 U.S.C. 529)" on authority of Pub. L. 97–258, §4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which enacted Title 31, Money and Finance. Section was formerly classified to section 294t of this title prior to its renumbering by Pub. L. 97–35. Amendments 2003 —Subsec. (d)(1)(B). Pub. L. 108–163 realigned margin. 2002 —Subsec. (a)(1). Pub. L. 107–251, §309(1), inserted "behavioral and mental health professionals," after "dentists,". Subsec. (b)(1)(B). Pub. L. 107–251, §309(2), inserted ", or an appropriate degree from a graduate program of behavioral and mental health" after "other health profession". Subsec. (c)(1). Pub. L. 107–251, §309(3), made technical amendment to references in original act which appear in subpar. (A) as reference to section 254o of this title and in subpar. (B) as reference to section 254n of this title. Subsec. (d)(1)(B), (C). Pub. L. 107–251, §309(4), added subpar. (B) and redesignated former subpar. (B) as (C). Subsec. (f)(1)(B)(iv), (v). Pub. L. 107–251, §309(5)(A), added cl. (iv) and redesignated former cl. (iv) as (v). Subsec. (f)(3). Pub. L. 107–251, §309(5)(B), made technical amendment to reference in original act which appears in text as reference to section 254o of this title. Subsec. (i). Pub. L. 107–251, §309(6), struck out subsec. (i), which required an annual report to Congress on the Scholarship Program. 1990 —Subsec. (a). Pub. L. 101–597, §201(a)(1), substituted "Corps Scholarship Program to assure, with respect to the provision of primary health services pursuant to section 254d(a)(2) of this title—" and pars. (1) and (2) for "Corps Scholarship Program (hereinafter in this subpart referred to as the 'Scholarship Program') to assure an adequate supply of trained physicians, dentists, and nurses for the National Health Service Corps (hereinafter in this subpart referred to as the 'Corps') and, if needed by the Corps, podiatrists, optometrists, pharmacists, clinical psychologists, graduates of schools of veterinary medicine, graduates of schools of public health, graduates of programs in health administration, graduates of programs for the training of physician assistants, expanded function dental auxiliaries, and nurse practitioners (as defined in section 296m of this title), and other health professionals." Subsec. (b)(4). Pub. L. 101–597, §401(b)[(a)], substituted reference to health professional shortage area for reference to health manpower shortage area. Subsec. (c). Pub. L. 101–597, §401(b)[(a)], substituted reference to health professional shortage area for reference to health manpower shortage area in par. (3)(B), (C). Pub. L. 101–597, §201(b), inserted par. (1) designation, redesignated former pars. (1) and (2) as subpars. (A) and (B), inserted before period at end of subpar. (B) ", including a statement of all factors considered in approving applications for participation in the Program and in making assignments for participants in the Program", inserted par. (2) designation, and added par. (3). Subsec. (d). Pub. L. 101–597, §401(b)[(a)], substituted reference to health professional shortage area for reference to health manpower shortage area in par. (2)(B). Pub. L. 101–597, §201(c), amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: "In determining which applications under the Scholarship Program to approve (and which contracts to accept), the Secretary shall give priority— "(1) first, to applications made (and contracts submitted) by individuals who have previously received scholarships under the Scholarship Program or under section 294z of this title; and "(2) second, to applications made (and contracts submitted)— "(A) for the school year beginning in calendar year 1978, by individuals who are entering their first, second, or third year of study in a course of study or program described in subsection (b)(1)(B) of this section in such school year; "(B) for the school year beginning in calendar year 1979, by individuals who are entering their first or second year of study in a course of study or program described in subsection (b)(1)(B) of this section in such school year; and "(C) for each school year thereafter, by individuals who are entering their first year of study in a course of study or program described in subsection (b)(1)(B) of this section in such school year." Subsec. (f)(1)(B)(iv). Pub. L. 101–597, §401(b)[(a)], substituted reference to health professional shortage area for reference to health manpower shortage area in closing provisions. Pub. L. 101–597, §201(a)(2), substituted "as a provider of primary health services" after "whichever is greater,". Subsec. (g)(3). Pub. L. 101–509 substituted "(under section 5303 of title 5)" for "(as set forth in the report transmitted to the Congress under section 5305 of title 5)". Subsec. (i). Pub. L. 101–597, §201(d)(1), amended introductory provisions generally. Prior to amendment, introductory provisions read as follows: "The Secretary shall report to Congress on March 1 of each year—". Subsec. (i)(4), (5). Pub. L. 101–597, §201(d)(2), added pars. (4) and (5) and struck out former par. (4) which read as follows: "the amount of tuition paid in the aggregate and at each educational institution for the school year beginning in such year and for prior school years." Subsec. (i)(6). Pub. L. 101–597, §401(b)[(a)], substituted reference to health professional shortage area for reference to health manpower shortage area. Pub. L. 101–597, §201(d)(2)(C), added par. (6). 1988 —Subsec. (b)(1). Pub. L. 100–607 substituted "osteopathic medicine" for "osteopathy". 1985 —Subsec. (g)(1). Pub. L. 99–129 struck out "or under section 294z of this title (relating to scholarships for first-year students of exceptional financial need)," after "Scholarship Program". 1981 —Subsec. (a). Pub. L. 97–35, §2709(b)(1), inserted reference to clinical psychologists. Subsec. (c). Pub. L. 97–35, §2709(b)(2), (3), substituted "254o" for "294w" in par. (1), and inserted provisions relating to information concerning meeting the service obligation in par. (2). Subsec. (f). Pub. L. 97–35, §2709(b)(4)–(6), in par. (1) substituted reference to sections 254d to 254h and 254j of this title, for reference to subpart II of part D of subchapter II of this chapter, in par. (2) substituted reference to sections 254d to 254h, 254j and 254k of this title, for reference to subpart II of part D of subchapter II of this chapter, and in par. (3) substituted "254o" for "294w". Subsec. (j). Pub. L. 97–35, §2709(b)(7), struck out subsec. (j) which related to consultation and participation of schools. 1979 —Subsec. (g)(3). Pub. L. 96–32 substituted "section 5305 of title 5" for "section 5303 of title 5". 1978 —Subsec. (f). Pub. L. 95–626 substituted "subpart II of part D" for "subpart II of part C" in pars. (1)(A) and (2). Subsec. (i). Pub. L. 95–623 substituted March 1 for December 1 as the date for Secretary's annual report to Congress. 1977 —Subsec. (d)(2). Pub. L. 95–215 substituted provisions relating to the school years beginning in calendar years 1978 and 1979 for provisions relating to the school year ending in the fiscal year beginning Oct. 1, 1977. Statutory Notes and Related Subsidiaries Change of Name Reference to Reserve Corps of the Public Health Service deemed to be a reference to the Ready Reserve Corps, see section 204(c)(3) of this title. Effective Date of 2003 Amendment Amendment by Pub. L. 108–163 deemed to have taken effect immediately after the enactment of Pub. L. 107–251, see section 3 of Pub. L. 108–163, set out as a note under section 233 of this title. Effective Date of 1990 Amendment Amendment by Pub. L. 101–509 effective on such date as the President shall determine, but not earlier than 90 days, and not later than 180 days, after Nov. 5, 1990, see section 529 [title III, §305] of Pub. L. 101–509, set out as a note under section 5301 of Title 5, Government Organization and Employees. Effective Date of 1985 Amendment Pub. L. 99–129, title II, §228, Oct. 22, 1985, 99 Stat. 548, provided that: "(a) Except as provided in subsection (b), this Act and the amendments and repeals made by this Act [enacting sections 294q–1 to 294q–3 of this title, amending this section and sections 292a, 292b, 292h, 292j, 293c, 294a, 294b, 294d, 294e, 294g, 294j, 294m to 294p, 294z, 295f to 295f–2, 295g, 295g–1, 295g–3, 295g–4, 295g–6 to 295g–8, 295g–8b, 295h, 295h–1a to 295h–1c, 296k, 296l, 296m, 297a, 298b–5, and 300aa–14 of this title, repealing sections 292c, 295 to 295e–5, 295g–2, 295g–5, 295g–8a, and 295g–9 of this title, enacting provisions set out as notes under sections 201, 292h, 293c, 294d, 294n, and 300aa–14 of this title and section 3811 of Title 50, War and National Defense, and amending provisions set out as a note under section 298b–5 of this title] shall take effect on the date of enactment of this Act [Oct. 22, 1985]. "(b)(1) The amendments made by section 101(a) of this Act [amending section 294a of this title] shall take effect as of October 1, 1985. "(2) The amendments made by section 208(e) of this Act [amending section 294e of this title] shall take effect nine months after the date of enactment of this Act [Oct. 22, 1985]. "(3) The amendment made by section 208(h) of this Act [amending section 294a of this title] shall take effect as of October 1, 1983. "(4) The provisions of section 746 of the Public Health Service Act (as added by the amendment made by section 209(h)(2) of this Act) [former 42 U.S.C. 294q–2] shall take effect as of June 30, 1984. "(5) The amendments made by section 209(j) of this Act [amending sections 294m and 297a of this title] shall take effect as of June 30, 1984. "(6) The amendments made by section 213(a) of this Act [amending section 295g–1 of this title] shall take effect as of October 1, 1985." Effective Date of 1977 Amendment Pub. L. 95–215, §5, Dec. 19, 1977, 91 Stat. 1506, provided that the amendment made by that section is effective Oct. 1, 1977. Effective Date Pub. L. 94–484, title IV, §408(b)(1), Oct. 12, 1976, 90 Stat. 2281, provided that the enactment of sections 254l to 254r of this title and repeal of section 234 of this title by Pub. L. 94–484 is effective Oct. 1, 1977. Effective Date; Savings Provision; Credit for Period of Internship or Residency Before September 30, 1977, Towards Service Obligation Pub. L. 94–484, title IV, §408(b)(2), Oct. 12, 1976, 90 Stat. 2288, as amended, eff. Oct. 12, 1976, by Pub. L. 95–83, title III, §307(p), Aug. 1, 1977, 91 Stat. 394, provided that: "(A) Except as provided in subparagraphs (B) and (C), the amendment made by paragraph (1) of this subsection [enacting this section and sections 254l–1 to 254r of this title and repealing section 234 of this title] shall apply with respect to scholarships awarded under the National Health Service Corps Scholarship Program from appropriations for such Program for fiscal years beginning after September 30, 1977. "(B) The provisions of section 225(f)(1) of the Public Health Service Act (as in effect on September 30, 1977) [former 42 U.S.C. 234(f)(1)] prescribing the financial obligation of a participant in the Public Health and National Health Service Corps Scholarship Program who fails to complete an active duty service obligation incurred under that Program shall apply to any individual who received a scholarship under such Program from appropriations for such Program for any fiscal year ending before October 1, 1977. "(C) If an individual received a scholarship under the Public Health and National Health Service Corps Scholarship Program for any school year beginning before the date of the enactment of this Act [Oct. 12, 1976], periods of internship or residency served by such individual in a facility of the National Health Service Corps or other facility of the Public Health Service shall be creditable in satisfying such individual's service obligation incurred under that Program for such scholarship or for any scholarship received under the National Health Service Corps Scholarship Program for any subsequent school year. If an individual received a scholarship under the Public Health and National Health Service Corps Program for the first time from appropriations for such Program for the fiscal year ending September 30, 1977, periods of internship or residency served by such individual in such a facility shall be creditable in satisfying such individual's service obligation incurred under that Program for such scholarship." Scholarship and Loan Repayment Programs Pub. L. 107–251, title III, §302(c), Oct. 26, 2002, 116 Stat. 1644, provided that: "The Secretary of Health and Human Services, in consultation with organizations representing individuals in the dental field and organizations representing publicly funded health care providers, shall develop and implement a plan for increasing the participation of dentists and dental hygienists in the National Health Service Corps Scholarship Program under section 338A of the Public Health Service Act (42 U.S.C. 254l) and the Loan Repayment Program under section 338B of such Act (42 U.S.C. 254l–1)." 1 See Change of Name note below. 2 So in original. 3 See References in Text note below.