(a) The principal balance and interest for one year of a forgivable loan awarded to an outstanding rural scholar must be forgiven for each year the scholar practices as a health care professional in the sponsoring community.
(b) The sponsoring community shall report to the department the length of time the scholar practices as a health care professional in the community.

(c) If the department finds that a sponsoring community is not in need of the scholar’s services and that the community is willing to forgive repayment of the principal balance and interest of the scholar’s loan, the department by rule may provide for the principal balance and interest of one year of the scholar’s loan to be forgiven for each year the scholar practices in another rural community in this state.
(d) Any amount of loan principal or interest that is not forgiven under this section shall be repaid to the department with reasonable collection fees in a timely manner as provided by department rule.