Report Title:
Nursing Loan Program; Established
Description:
Establishes a nursing loan program and appropriates funds to provide loans to nursing candidates. (HB167 HD1)
HOUSE OF REPRESENTATIVES |
H.B. NO. |
167 |
TWENTY-SECOND LEGISLATURE, 2003 |
H.D. 1 |
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STATE OF HAWAII |
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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 care for Hawaii residents is of serious concern given the worldwide nursing shortage. The primary cause of this shortage is the aging of the workforce and the decline in the number of 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 working registered nurses increased by 4.5 years between 1983 and 1998. The number of full-time registered nurses in the cohorts of new nurses just entering the labor market has been approximately thirty-five per cent lower than observed for cohorts of similar age 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. The largest group 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 large cohorts of registered nurses retire. By the year 2020, the registered nurse workforce is forecast to decline to roughly the same size as it is today, and is expected to be 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 of Hawaii's nine thousand actively practicing registered nurses, one-half 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 to replace those retiring from the workforce. This estimate does not include the demand for registered nurses caused by an expanding health care industry, or the increased demand for nursing services by an aging population.
Approximately two hundred eighty registered nurses graduating each year from Hawaii's schools of nursing and nursing programs remain in Hawaii. This leaves a shortage of one hundred twenty registered nurses per year. To graduate one hundred twenty more registered nurses, at least twelve additional nursing faculty members are needed.
During the last nursing shortage in Hawaii in the late 1980s and early 1990s, the health care industry spent more than $6,000,000 on mainland traveling nurses. Currently, declining federal reimbursements to Hawaii's hospitals, long-term care facilities, and home care agencies have placed extreme financial pressures on the industry. Its ability to bear the cost of hiring mainland travel nurses today, is highly questionable. In addition, due to the nationwide and worldwide shortage, the reality is that even if the health care industry could withstand the cost pressures of hiring mainland traveling nurses, there are not enough registered nurses to meet the growing demand.
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. Chapter 304, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:
"§304- Nursing education loan program; eligibility; terms; collection; rules. (a) There is created the nursing education loan program to be administered by the University of Hawaii for the purpose of providing financial support to students who complete a state-approved nursing education program and agree to secure employment as a nurse in Hawaii.
(b) Eligibility for loans under the program shall be determined on a competitive basis. The amount loaned to a student shall be based on need and proof of acceptance into a State-approved nursing education program. The maximum aggregate amount of loans that are provided to a student under the program shall be equivalent to the cost of tuition for, and textbooks and other instructional materials necessary to complete a State-approved nursing education program.
(c) All loans made under this section shall bear interest at five per cent simple interest. Repayment of principal and interest charges shall commence one year after graduation or three months after a borrower ceases to be enrolled in the state-approved nursing education program and shall be paid in periodic installments within a six-year period. The university may charge late fees and all other reasonable costs for the collection of delinquent loans.
(d) Upon a showing of proof that the individual has completed a State-approved nursing education program and is employed as a full-time teacher in the Hawaii public school system:
(1) One-tenth of the total amount of the loan and interest shall be waived for every year of the first five years; and
(2) The remaining balance shall be waived after the sixth year that a loan recipient is employed as a nurse in a health care facility, or provides nursing services in the State.
(e) If a loan recipient subject to this section fails to secure employment as a nurse or provide nursing services in the State within six consecutive years from the loan recipient's original date of employment following graduation, excluding temporary leaves of absence, the loan recipient shall repay any remaining loan balance at the rate of ten per cent simple interest.
(f) In accordance with chapter 103D, the university may enter into written contracts with collection agencies for the purpose of collecting delinquent student loans. All payments collected, exclusive of a collection agency's commissions, shall revert, and be credited, to the loan fund. A collection agency that enters into a written contract with the university for the collection of delinquent student loans pursuant to this section may collect a commission from the debtor in accordance with the terms of, and up to the amounts authorized in, the written contract.
(g) The university may adopt rules to implement the nursing education loan program. The rules shall be adopted pursuant to chapter 91; provided that the public notice and public hearing requirements of that chapter and any other law shall not apply.
"§304- Nursing education loan program special fund. (a) There is created in the treasury of the State, the nursing education loan program special fund, into which shall be deposited:
(1) Appropriations to the fund;
(2) Private contributions;
(3) Moneys received in repayment of loans, including interest and payments received on account of principal;
(4) Interest and other earnings on moneys in the fund; and
(5) Moneys from other sources.
Moneys on balance in the special fund at the close of each fiscal year shall remain in that fund and shall not lapse to the credit of the general fund.
(b) Moneys in the fund shall be used by the university to provide loans under the nursing education loan program. An amount not exceeding five per cent of the total amount of outstanding loans may be expended on the cost of administering the special fund."
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 be deposited into the nursing education loan program special fund 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. New statutory material is underscored.
SECTION 5. This Act shall take effect on July 1, 2003.