(a) If a participant defaults on or otherwise fails to honor a loan-repayment contract with the board, the individual shall be liable for immediate repayment of the total principal loan amount plus interest at the rate of 8 percent accruing from the date of default or other failure to honor the contract. In addition, the participant shall pay an additional penalty as specified:
(1) For default or other failure to honor a contract before graduation with a master's degree in physician assistant studies, a penalty equal to 30 percent of the total principal amount of the loan or loans received by the participant.
(2) For default or other failure to honor a contract after graduation with a master's degree in physician assistant studies but prior to completion of the repayment obligation set forth in Section 16-47-222, a penalty equal to 100 percent of the total principal amount of all loans received by the participant from the program.
(b) The failure of a participant to honor his or her contract with the board or to pay the amount he or she is liable for under this section shall constitute a ground for the revocation of his or her license to work as a physician's assistant in Alabama.
(c) The board may excuse repayment of a loan, in whole or in part, upon the death of a participant, or upon the participant becoming disabled to the extent that he or she is no longer able to work as a physician's assistant, or upon some other extreme hardship not the fault of the participant.