(a) To the extent that they are not in conflict with the provisions of AS 14.43.600 - 14.43.700, the provisions of AS 14.43.100 - 14.43.160 are applicable to loans made under AS 14.43.600 - 14.43.700.

(b) If a borrower meets the conditions provided in (a) of this section and is employed as a teacher in a rural elementary or secondary school, the portion of the loan that shall be paid by the state is the following percentages of the total loan received plus interest up to a total of 100 percent of the total loan:

(1) one year employment, 15 percent;

(2) two years employment, an additional 15 percent;

(3) three years employment, an additional 15 percent;

(4) four years employment, an additional 25 percent;

(5) over four years employment, an additional 30 percent.

(c) A loan may not exceed $7,500 in a school year, exclusive of loan guarantee fees.

(d) Proceeds from a teacher education loan may be used only for undergraduate expenses of books, tuition, required fees, loan guarantee fees, room and board, and the transportation expense for two round trips between the loan recipient's home and school.

(e) Teacher education loans made to a student may not exceed a total of $37,500.

(f) Notwithstanding (b) of this section, a borrower who fails to qualify for loan payment by the state because the borrower is required to reside in an urban area of the state in order to receive medical treatment is still entitled to receive loan payments by the state under (b) of this section if the medical condition for which the borrower is receiving treatment did not exist before the borrower received the teacher education loan and the borrower is employed as a teacher in an urban elementary or secondary school.

(g) The commission shall set the interest rate on a teacher education loan made from the teacher education revolving loan fund established under AS 14.43.620.