; covered costs (a) Eligibility An individual is eligible to participate in the Specialty Education Loan Repayment Program if the individual— (1) is hired under section 7401 of this title to work in an occupation described in section 7692 of this title; (2) owes any amount of principal or interest under a loan, the proceeds of which were used by or on behalf of that individual to pay costs relating to a course of education or training which led to a degree that qualified the individual for the position referred to in paragraph (1); and (3) is— (A) recently graduated from an accredited medical or osteopathic school and matched to an accredited residency program in a medical specialty described in section 7692 of this title; or (B) a physician in training in a medical specialty described in section 7692 of this title with more than two years remaining in such training. (b) Preference for veterans In selecting individuals for participation in the Specialty Education Loan Repayment Program under this subchapter, the Secretary may give preference to veterans. (c) Covered costs For purposes of subsection (a)(2), costs relating to a course of education or training include— (1) tuition expenses; (2) all other reasonable educational expenses, including expenses for fees, books, equipment, and laboratory expenses; and (3) reasonable living expenses. 7694. Specialty education loan repayment (a) In general Payments under the Specialty Education Loan Repayment Program shall consist of payments for the principal and interest on loans described in section 7682(a)(2) of this title for individuals selected to participate in the Program to the holders of such loans. (b) Frequency of payment The Secretary shall make payments for any given participant in the Specialty Education Loan Repayment Program on a schedule determined appropriate by the Secretary. (c) Maximum amount