Code of Alabama - Title 22: Health, Mental Health, and Environmental Control - Section 22-4B-4 - Maximum loan amount - Repayment by working for department or Federally-funded Community Health Center - Balance due and payable upon demand for failure to remain employed or for withdrawal from school

Section 22-4B-4 - Maximum loan amount - Repayment by working for department or Federally-funded Community Health Center - Balance due and payable upon demand for failure to remain employed or for withdrawal from school.

Any recipient who is granted a loan by the board shall be granted a loan in an amount authorized by the board, not to exceed $20,000.00, plus the employee's salary, if paid by the board while the employee attends school. This maximum loan amount may be adjusted upward by the board not more than once every two years. When the number of qualified applicants for loans exceeds the availability of funds, loans shall be granted by the board based upon an assessment of needs by rural or underserved areas for registered nurses, and based upon an assessment by the board of the merits of each individual application. Any loan made and granted to a recipient shall be made based upon the following conditions of repayment:

(1) The loan recipient shall repay the loan by working for the department or for a federally-funded community health center designated by the board after licensure as a registered professional nurse for a period of two full years for each year of full-time course of study financed by the board. Repayment shall be as follows: under a formula to be determined by the board, a proportionate share of the principal of the loan and of all interest accrued shall be forgiven and shall be deemed paid in full after completion of each full year of such service in the department or community health center in a rural area designated by the board.

(2) If the recipient does not remain employed by the department or a designated community health center for the full commitment period after licensure as a nurse, the remaining unpaid principal of the loan shall become due and payable on demand, with interest accruing at the rate of 12 percent per year from the date the loan obligation was signed by the recipient. In addition, there shall be included in any loan obligation a provision for liquidated damages in an amount equal to $2,000.00 per year for each year remaining to be served under the obligation. Recipients who resign or who are discharged for cause shall be deemed to not remain employed by the department. The board is authorized to rescind any obligation, or to suspend payment thereon, if it is owed by a recipient who becomes unable to perform employment duties due to a reduction in force, or who becomes disabled due to death, illness, injury, or infirmity.

(3) If the recipient fails or withdraws from school at any time before completing nursing training, or if the board cancels the loan for good cause, the principal of the loan shall become due and payable on demand with interest accruing at the rate of twelve per cent per annum from the date the recipient signed the obligation to repay the loan.

(Acts 1991, No. 91-616, p. 1154, §4.)

Last modified: May 3, 2021