Report Title:

Nursing Loan Program; Established

Description:

Establishes a nursing loan program and appropriates funds to provide loans to nursing candidates.

HOUSE OF REPRESENTATIVES

H.B. NO.

167

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO NURSING EDUCATION.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that Hawaii's health care industry is the second largest industry in the State. To ensure access to quality health care services an adequate supply of registered nurses is necessary. The availability of registered nurses to provide the necessary care for the residents of the State of Hawaii is of serious concern as there is now an acknowledged nursing shortage in the nation and worldwide. The primary cause of this impending chronic shortage of registered nurses is the aging of the workforce and the decline in younger women choosing nursing as a career.

According to a June 14, 2000, study by Peter I. Buerhaus, PhD. RN., Douglas O. Staiger, PhD., and David L. Auerbach, MS., "Implication of an Aging Registered Nurse Workforce", the average age of the working registered nurses increased by 4.5 years between 1983 and 1998. The number of full-time registered nurses observed in recent cohorts has been approximately 35 per cent lower than that observed at similar ages for cohorts that entered the labor market twenty years earlier. Over the next two decades, this trend will lead to further aging of the registered nurse workforce because the largest cohorts of registered nurses will be between the ages of fifty and sixty-nine years. Within the next ten years, the average age of registered nurses is forecast to be 45.5 years, an increase of 3.5 years over the current age, with more than forty per cent of the registered nurse workforce expected to be older than fifty years. The total number of full-time equivalent registered nurses per capita is forecast to peak around the year 2007 and decline steadily thereafter as the largest cohorts of registered nurses retire. By the year 2020, the registered nurse workforce is forecast to be roughly the same size as it is today, declining nearly twenty per cent below projected registered nurse workforce requirements.

Recent registered nurse workforce data from the Community Initiative on Nursing in Hawaii finds that one-half of Hawaii's nine thousand actively practicing registered nurses will retire within the next fifteen years. Hawaii's schools of nursing will need to graduate four hundred registered nurses every year for the next fifteen years in order to replace the registered nurses retiring from the workforce. The need to graduate four hundred registered nurses per year does not include the demand for registered nurses caused by an expansion of the health care industry nor the increased need for nursing services by an aging of the overall population.

The number of registered nurse graduates from Hawaii's schools of nursing and nursing programs that remain in Hawaii is approximately two hundred eighty. This leaves a shortage of one hundred twenty registered nurses per year. To increase the number of registered nurse graduates, the number of nurse faculty members must also be increased. In order to graduate one hundred twenty more registered nurses an addition of at least twelve nursing faculty members will be necessary.

The last nursing shortage experienced by Hawaii and the nation was in the late 1980's and early 1990's. During that time the health care industry spent more than six million dollars on mainland traveling nurses. The declining federal reimbursements to Hawaii's hospitals, long-term care facilities, and home care agencies have placed extreme financial pressures on the industry. The ability of the health care industry to meet the financial cost of hiring mainland travel nurses is highly questionable. In addition, due to the nationwide and worldwide shortage, the reality is that even if the health care industry could financially withstand the cost pressures of hiring mainland traveling nurses, there are not enough registered nurses to meet the growing demand for registered nurse services.

The legislature further finds that the United States Department of Health and Human Services, Health Resources and Services Administration, through its December 2000, report "State Health Workforce Profiles" has issued an "early warning" on the issue of declining health care professionals, including registered nurses. Data from the "State Health Workforce Profiles" shows that Hawaii's registered nurses per one hundred thousand population was 723.1 compared to 797.7 and ranked thirty-eighth out of the fifty states.

The legislature believes that if Hawaii's health care industry is to continue to provide high quality health care services to the residents of the State, it is imperative to increase the registered nurse workforce through the recruitment and retention of sufficient numbers of qualified persons into the profession of nursing.

The purpose of this Act is to establish a loan program for nursing education on a pilot basis as an incentive for young men and women to enter the nursing profession.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

NURSING EDUCATION LOAN PROGRAM

§ -1 Short title. This chapter shall be known and may be cited as the Nursing Education Loan Program Act.

§ -2 Definitions. As used in this chapter, unless the context otherwise requires:

"Approved course of study" means a course of study in a nursing program approved by the state board of nursing.

"Nursing school" means a nursing program in a public or private institution located in this State that has been accredited by a nationally recognized accrediting agency listed by the United States Secretary of Education and approved by the state board of nursing.

"Program" means the nursing education loan program established under this section.

"Student" means any resident domiciled in this State, who:

(1) If applying at the university, would qualify for resident tuition under section 304-4(c);

(2) Has been admitted to a nursing program in this State.

"University" means the University of Hawaii.

"Work requirement" means postgraduate employment (at least thirty-two hours per week) with an employer located in this State as a registered nurse. The term does not include volunteer service or employment before graduation.

§   -3 Nursing education loan program; establishment; administration. (a) There is established a five-year pilot program to be known as the nursing education loan program to be attached to the University of Hawaii for administrative purposes.

(b) Under this loan program, the university may provide loans up to $10,000 per academic year to an eligible student upon confirmation from an approved educational institution that the student has been accepted for enrollment in an approved course of study.

(c) Loans shall not exceed the amount set forth in subsection (b) and shall only be used for tuition, books, laboratory fees, and any other required fees.

(d) To receive a loan under this chapter, a student shall meet all of the following requirements:

(1) Show proof of admission to an approved course of study;

(2) Maintenance of residence and domicile in Hawaii during the term of the loan;

(3) Compliance with any conditions placed on the loan by the university;

(4) Maintenance of a grade point average of 2.5 or higher;

(5) Enter into a written agreement with the university to:

(A) Satisfy all degree requirements and other requirements under this chapter;

(B) Commence employment in this State within six months after completion of an approved degree in nursing, unless the university determines that there are extenuating circumstances for noncompletion; and

(C) Reimburse the university all amounts received under this chapter and interest thereon, as determined by the university, if the student fails to comply with this paragraph.

(e) A student shall apply to the university and include all information and documentation required by the university. The application of a student under the age of eighteen years shall include the signature of a parent or guardian.

(f) The work requirement under subsection (d)(5)(B) shall begin no later than six months after the receipt of the degree sought.

(g) If a student terminates enrollment in the nursing program during the academic year or prior to completion of the approved course of study, the approved educational institution shall notify the university in writing and shall return all unused portions of the loan. Returned amounts shall be used to fund other loans under this chapter.

(h) Loans awarded under the program shall be limited to funds appropriated for the purpose or funds otherwise matched by external entities. First priority for awarding loans shall be given to renewal applicants.

(i) The university shall adopt policies and procedures in accordance with chapter 91 to ensure equal opportunity to loans offered under this chapter to all qualified nursing school applicants who apply to accredited nursing schools situated in the State.

§ -4 Repayment of loans; loan forgiveness. (a) Loan repayments shall commence no later than six months following the receipt of a nursing degree, unless the university determines there are extenuating circumstances that would delay repayment or the individual continues the individual's nursing education, not to exceed an additional three years.

(b) The repayment period for all loans received from the university shall be ten years from the date of the initial payment, unless the recipient meets the requirements under subsections (c) and (d).

(c) For each year that a recipient works in a health care facility or provides health care services as a registered nurse in the State, twenty per cent of the total loan amount received from the university shall be forgiven. After five years of full-time employment as a registered nurse, the entire loan amount shall be forgiven.

(d) The recipient of the loan shall be responsible for notifying the university if the recipient wishes to be credited with full-time employment in lieu of repayment of the loan moneys.

(e) The university may waive the requirements for employment or loan repayment for extenuating circumstances.

§ -5 Program administration. (a) The university or its assignee shall monitor and verify a student's fulfillment of all internship and work requirements under this chapter.

(b) The university may enter into a contract with a private or public entity to administer the program.

(c) The university shall enforce repayment of all loans for a student who does not comply with this chapter. Enforcement shall include the use of all lawful collection procedures and the use of private collection agencies.

(d) Loans received by a student from the program shall not be considered taxable income under chapter 235.

(e) Loans received by a student from the program shall not be considered financial assistance or appropriations to the approved educational institution.

(f) Any person who knowingly or intentionally procures, obtains, or aids another in procuring or obtaining a loan under this chapter through fraudulent means shall be disqualified from participation in the program and shall be liable to the university for an amount equal to three times the amount obtained.

(g) Any appeal under this chapter shall be subject to chapter 91.

(h) The university shall adopt rules under chapter 91 necessary to carry out the purposes of this chapter.

§ -6 Annual report. (a) The university or its contractual entity shall publish a report by September 1, 2004, and every year thereafter. The report shall include information regarding the operation of the program and other information such as:

(1) The total number of students receiving loans;

(2) The total amount of loans provided;

(3) The number of full-time and part-time students receiving loans, reported by institution;

(4) The amount of funds awarded to students; and

(5) The total number of students who withdraw from the program.

(b) The annual report shall be submitted to the governor and the legislature not later than twenty days prior to the convening of each regular session of the legislature."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii, the sum of $          , or so much thereof as may be necessary for fiscal year 2003-2004, and the same sum, or so much thereof as may be necessary for fiscal year 2004-2005, to establish and implement the nursing education loan program established under this Act.

The sums appropriated shall be expended by the University of Hawaii for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2003.

INTRODUCED BY:

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