(a) Scholarships extended under subdivision (1) of Section 34-22-62 shall be repaid following graduation, either in cash as is provided under subsection (b) or under terms of a contract to serve in a needy area in Alabama for a term to be specified by the board as provided in subsection (c). Any moneys received from recipients in repayment of a scholarship loan under subsections (b) and (c) shall upon receipt thereof be retained by the Board of Optometric Scholarship Awards to be used for the funding of future scholarships. The board shall establish a separate fund for these purposes.

(b) Scholarship loans to be repaid under this subsection shall be repaid to the Board of Optometric Scholarship Awards in full at an interest rate determined by the board from the date of graduation from the optometry school, and payments are to be made annually, the first of which is due one year after the recipient enters the practice of optometry or one year after completion of residency training, whichever occurs first. Repayment in full shall be completed within 12 years from initiation of repayment. Any recipient who fails for any reason to continue his or her optometric education shall repay all loan amounts in accordance with terms and conditions established by the Board of Optometric Scholarship Awards. The interest rate on such unpaid loan amounts shall be determined by the Board of Optometric Scholarship Awards and shall be applied from the date of departure from the optometry school.

(c) Scholarship loans to be repaid under this subsection shall be repaid by service in one of the following ways, subject to approval by the Board of Optometric Scholarship Awards, and considering the U.S. Department of Health, Education and Welfare designated optometric manpower shortage areas as one means of determination:

(1) Practice for a four-year period in a community of less than 5,000 population which has been deemed to be critically in need of additional optometric practitioners.

(2) Practice for a five-year period in a community of more than 5,000 population and less than 15,000 population which has been deemed to be critically in need of additional optometric practitioners.

(3) Practice for a five-year period in a community of more than 15,000 but less than 100,000 population and repayment of one-half the loan plus an interest rate set by the Board of Optometric Scholarship Awards to be repaid annually in five annual payments, beginning at the end of the first year of practice.

(4) Practice for four years in a position in Alabama in public health or as an optometrist in any state institution approved by the Board of Optometric Scholarship Awards.

(5) For loans of less than four years of study, service repayment may be prorated on the basis of one-fourth of the above requirements for each loan.