An Act to amend the conditions for schools receiving capitation grants under section 770 of such Act, and for other purposes.

Amends the Public Health Service Act to prohibit a school of medicine from recovering a capitation grant in fiscal year 1978 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 five percent over the number of students currently enrolled in specified classes its enrollment of full time, third-year students in school year 1978-1979.

Excludes from the determination of the number of full-time, third-year students enrolled in a school those full time, third-year students who were not second-year students in such school and who: (1) are not citizens of the United States; (2) were previously enrolled in a school of medicine to which the requirements of this Act apply; (3) were previously enrolled in a school of medicine which is in a State and which is not accredited by the appropriate bodies; (4) were first enrolled after October 12, 1976, in a school of medicine not in a State; or (5) were previously enrolled in a school of dentistry or a school of osteopathy.

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 1979 or 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.

Increases the amounts authorized to be appropriated for grants for public health studies from $8,000,000 to $9,000,000 for fiscal year 1979, and from $9,000,000 to $10,000,000 for fiscal year 1980.

Revises the eligibility of the medical school class of 1980 in applying for National Health Service Corps Scholarships.

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.

Authorizes the Secretary to extend for an additional 12 months the period during which the Secretary may conditionally designate entities as health systems agencies or State health planning and development agencies.

Directs the Secretary to conduct a study to determine whether schools of medicine, nursing, or osteopathy deny admission or otherwise discriminate against any applicant to such schools because of the applicant's views on abortions or sterilization.

Authorizes the disbursing agent of Saint Elizabeths Hospital, Washington, D.C., subject to approval by the Secretary of the Treasury to invest hospital funds which are in excess of current needs, in interest-bearing obligations of the United States.