(a) The Board of Medical Scholarship Awards shall make a careful and thorough investigation of the ability, character, and qualifications of each applicant, and award scholarships and loans according to the judgment of the board. Preference in granting loans shall be given to applicants who sign agreements to practice in those areas in greatest need of medical service for periods of time to be stipulated by the board.
(b) The Board of Medical Scholarship Awards shall make reasonable rules and regulations for implementing and administering this division.