A bill to amend the Public Health Service Act to require increases in the enrollment of third-year medical students as a condition to medical school's receiving capitation grants under such Act.

Amends the Public Health Service Act to prohibit a school of medicine from receiving a capitation grant in fiscal years 1978 and 1979 unless its application for such grant contains or is supported by assurances satisfactory to the Secretary of the Department of Health, Education, and Welfare that the school will increase by by a specified amount its enrollment of full time, third-year students in school years 1978-1979 and 1979-1980.

Excludes from the determination of the number of full-time, third-year students enrolled in a school those full-time, third-year students who: (1) are not citizens of the United States; (2) were first enrolled after October 12, 1976, in a school of medicine not in a State; or (3) were previously enrolled in a school of medicine to which the requirements of this Act apply.

Sets forth the reasons for which the Secretary may waive the requirement of increased enrollment established by this Act.

Stipulates that a school of medicine which did not comply with such increase requirements shall not be eligible to receive a capitation grant in fiscal year 1980.

Authorizes the Secretary to make grants to public or nonprofit institutions which provide graduate or specialized training in public health.

Allows such funds to be granted to individuals with work experience in health services who are studying preventive medicine or dentistry.

Directs the Secretary to conduct a study and report to specified committees of the House and the Senate on the quality of training provided by foreign medical schools, the need of this country for personnel trained in such schools, and the effectiveness of licensing conditions in this country in assuring that the health care provided by graduates of such schools is of high quality.

Authorizes the Secretary to insure loans for students who have been accepted for enrollment at an eligible institution of health care education.

Authorizes the insurance of loans made to individuals who have previously had a federally-insured student loan and who agree to expend such funds solely for the repayment of interest due on such loans. Stipulates that interest payments on such loans may be deferred. Raises the annual interest rate on the unpaid principal balance of such a loan to 12 percent.