of medicine or osteopathy may request deferment of obligated service to complete an approved program of advanced clinical training. The Administrator will generally defer the beginning date of the obligated service to allow the participant to complete the the advanced clinical training program. The period of this deferment will be the time designated for the specialty training in which the physician is enrolled as defined by the Accreditation Council for Graduate Medical Education or the American Osteopathic Association. (38 U.S.C. 4142(i); 4143(b)(3)(A)(i))

(b) Deferment requirements. Any participant whose period of obligated service is deferred shall be required to take all or part of the advanced clinical training in an accredited program in an educational institution having an Affiliation Agreement with a Veterans Administration health care facility. (38 U.S.C. 4143(b)(4)(A))

(c) Additional service obligation. A participant who has requested and received deferment for approved advanced clinical training may, at the time of approval of such deferment and at the discretion of the Administrator and upon the recommendation of the Chief Medical Director, incur an additional period of obligated service

(1) At the rate of one-half of a calendar year for each year of approved clinical training (or a proportionate ratio thereof) if the training is in a medical specialty determined to be necessary to meet health care requirements of the Department of Medicine and Surgery, Veterans Administration;

or

(2) At the rate of three-quarters of a calendar year for each year of approved graduate training (or a proportionate ratio thereof) if the training is in a medical specialty determined not to be necessary to meet the health care requirements of the Department of Medicine and Surgery. Specialties necessary to meet the health care requirements of the Department of Medicine and Surgery will be prescribed periodically by the Administrator when, and if, this provision for an additional period of obligated service is to be used.

(Authority: 38 U.S.C. 4143(b)(4)(B))

(d) Altering deferment. Before altering the length or type of approved advanced clinical training for which the period of obligated service was deferred under paragraph (a) or (b) of this section, the participant must request and obtain the Administrator's written approval of the alteration. (38 U.S.C. 4142(i))

(e) Additional terms of deferment. The Administrator may prescribe additional terms and conditions for deferment under paragraphs (a), (b), (c) and (d) of this section as necessary to carry out the purposes of the Scholarship Program. (38 U.S.C. 4142(i))

(f) Beginning of service after deferment. Any participant whose period of obligated service has been deferred under paragraph (a) or (b) of this section must begin the obligated service effective on the date of appointment under title 38 in full-time clinical practice in an assignment or location in a Veterans Administration health care facility as determined by the Administrator. The assignment will be made by the Administrator within 120 days prior to or no later than 30 days following the completion of the requested graduate training for which the deferment was granted. Travel and relocation regulations will apply. (38 U.S.C. 4143(b)(2))

[47 FR 10810, Mar. 12, 1982; 47 FR 13523, Mar. 31, 1982]

§ 17.609 Pay during period of obligated service.

The initial appointment of physicians for obligated service will be made in a grade commensurate with qualifications as determined in section 4107(b)(1) of title 38, United States Code. A physician serving a period of obligated service is not eligible for incentive special pay during the first three years of such obligated service. He or she may be paid primary special pay at the discretion of the Administrator upon the recommendation of the Chief Medical Director. (Pub. L. 96-330, Sec. 202; 38 U.S.C. 4118(h))

§ 17.610 Failure to comply with terms and conditions of participation.

(a) If a participant, other than one described in paragraph (b) of this section fails to accept payment or instructs the school not to accept payment of the scholarship provided by the Administrator, the participant must, in addition to any service or other obligation incurred under the contract, pay to the United States the amount of $1,500 liquidated damages. Payment of this amount must be made within 90 days of the date on which the participant fails to accept payment of the scholarship award or instructs the school not to accept payment. (38 U.S.C. 4144(a))

(b) If a participant:

(1) Fails to maintain an acceptable level of academic standing;

(2) Is dismissed from the school for disciplinary reasons;

(3) Voluntarily

terminates the course of study or program for which the scholarship was awarded including in the case of a full-time student, a reduction of course load from full-time to part-time before completing the course of study or program;

(4) Fails to become licensed to practice medicine or osteopathy in a state or fails to become licensed as a registered nurse in a State within one year from the date such person becomes eligible to apply for State licensure; or

(5) Is a part-time student and fails to maintain employment in a permanent assignment in a VA health care facility while enrolled in the course of training being pursued; the participant must instead of performing any service obligation, pay to the United States an amount equal to all scholarship funds awarded under the written contract executed in accordance with § 17.602. Payment of this amount must be made within 1 year from the date academic training terminates unless a longer period is necessary to avoid hardship. No interest will be charged on any part of this indebtedness.

(Authority: 38 U.S.C. 4144(b))

(c) Participants who breach their contracts by failing to begin or complete their service obligation (for any reason) other than as provided for under paragraph (b) of this section are

'A' is the amount the United States is entitled to recover;

'' is the sum of the amounts paid to or on behalf of the applicant and the interest on such amounts which would be payable if, at the time the amounts were paid, they were loans bearing interest at the maximum legal prevailing rate, as determined by the Treasurer of the United States;

't' is the total number of months in the applicant's period of obligated service; and 's' is the number of months of the period of obligated service served by the participant."

The amount which the United States is entitled to recover shall be paid within 1 year of the date on which the applicant failed to begin or complete the period of obligated service, as determined by the Administrator.

(Authority: 38 U.S.C. 4144(c))

(Approved by the Office of Management and Budget under control number 29000352)

[47 FR 10810, Mar. 12, 1982; 47 FR 13523, Mar. 31, 1982, as amended at 48 FR 37400, Aug. 18, 1983]

§ 17.611 Bankruptcy.

Any payment obligation incurred may not be discharged in bankruptcy under title 11 of the United States Code until 5 years after the date on which the payment obligation is due. (Authority: 38 U.S.C. 4144(d)(3))

§ 17.612 Cancellation, waiver, or suspension of obligation.

(a) Any obligation of a participant for service or payment will be canceled upon the death of the participant. (38 U.S.C. 4144(d)(1))

(b)(1) A participant may seek a waiver or suspension of the service or payment obligation incurred under this program by written request to the Administrator setting forth the basis, circumstances, and causes which support the requested action. The Admin

istrator may approve an initial request for a suspension for a period of up to 1 year. A renewal of this suspension may also be granted.

(2) The Administrator may waive or suspend any service or payment obligation incurred by a participant whenever compliance by the participant (i) is impossible, due to circumstances beyond the control of the participant or (ii) whenever the Administrator concludes that a waiver or suspension of compliance would be in the best interest of the Veterans Administration. (Authority: 38 U.S.C. 4144(d)(2))

(c) Compliance by a participant with a service or payment obligation will be considered impossible due to circum

stances beyond the control of the participant if the Administrator determines, on the basis of such information and documentation as may be required, that the participant suffers from a physical or mental disability resulting in permanent inability to perform the service or other activities which would be necessary to comply with the obligation. (38 U.S.C. 4144(d)(2))

(d) Waivers or suspensions of service or payment obligations, when not related to paragraph (c) of this section, and when considered in the best interest of the Veterans Administration, will be determined by the Administrator on an individual basis. (38 U.S.C. 4144(d)(2))