HB2225

Report Title:

Nursing Education Loan Program

Description:

Creates nursing education loan program under board of nursing for up to $10,000 per academic year for students studying to be registered nurses. Requires repayment of loan provided that each year of work as a registered nurse in Hawaii may be substituted for 20% of the loan amount.

HOUSE OF REPRESENTATIVES	H.B. NO.	2225
TWENTY-FIRST LEGISLATURE, 2002
STATE OF HAWAII

A BILL FOR AN ACT

 

relating to the nursing education loan program.

 

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 is of serious concern as there is now an acknowledged nursing shortage in the nation and worldwide. The primary cause of this chronic shortage of registered nurses is the aging of the workforce and a decline in the numbers of younger women and men choosing nursing as a career.

According to a June 14, 2000 study by Buerhaus, Staiger, and Auerbach entitled "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 observed in recent cohorts has been approximately thirty-five 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 age of fifty and sixty-nine. 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. 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 graduation rate 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 the aging of the overall population.

The number of annual 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, at least an additional twelve nursing faculty members will be necessary.

The last nursing shortage experienced by Hawaii and the nation occurred in the late 1980s and early 1990s. During that time, the health care industry spent more than $6,000,000 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 nursing shortage, the reality is that even if the health care industry can 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 entitled "State Health Workforce Profiles", has issued an "early warning" on the issue of declining health care professionals, including registered nurses. Data from this report shows that Hawaii's registered nurses per 100,000 population was 723.1 compared to 797.7 and ranked thirty-eight 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 men and women into the profession of nursing.

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

SECTION 2. Chapter 457, Hawaii Revised Statutes, is amended by adding three new sections to be appropriately designated and to read as follows:

"§457-A Nursing education loan program; establishment; administration. (a) There is established a five-year pilot program to be known as the nursing education loan program within the board of nursing for administrative purposes.

(b) Under the parameters of the program and subject to available appropriations, the board of nursing may provide loans of up to $10,000 per academic year to an eligible applicant upon confirmation from an approved educational institution that the applicant has been accepted for enrollment as a student 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 section, a student shall meet all of the following requirements:

(1) Apply to the board of nursing on a form prescribed by the board of nursing;

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

(3) Maintain residence and domicile in Hawaii during the term of the loan;

(4) Comply with any conditions placed on the loan by the board of nursing;

(5) Maintain a cumulative grade point average of 2.5 or higher during the term of the loan;

(6) Enter into a written agreement with the State, though the board of nursing, to:

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

(B) Engage in employment after graduation to satisfy the work requirement; and

(C) Reimburse the State, through the board of nursing, all amounts received under this section and interest thereon, as determined by the board of nursing, if the student fails to comply with subparagraphs (A) and (B).

(e) An applicant shall apply to the board of nursing for each academic year of study, and include all information and documentation required by the board of nursing. An applicant under eighteen years of age shall require the signature of the applicant's parent or guardian.

(f) The work requirement under subsection (d)(6)(B) shall begin no later than six months after the student obtains an approved degree in nursing, unless the board of nursing determines that extenuating circumstances exist which would justify a delay, in which case the board of nursing, in its sole discretion, may delay commencement of the work requirement for a period of not more than two years.

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

(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 applicants renewing their loan applications.

(i) The board of nursing shall monitor and verify a student's fulfillment of all internship and work requirements under this section. The board of nursing may enter into a contract with a private or public entity to administer the program.

(j) Loans received by a student from the program shall not be considered taxable income under chapter 235. Loans received by a student from the program shall not be considered financial assistance or appropriations to the approved educational institution.

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

(l) The board of nursing shall adopt rules under chapter 91 necessary to carry out the purposes of sections 457-B, 457-C, and this section.

§457-B Repayment of loans; loan forgiveness. (a) Loan repayments shall commence no later than six months following the receipt of an approved nursing degree, unless the board of nursing determines there are extenuating circumstances, as described in section 457-A(f), or if the individual continues to pursue further nursing education, in which case repayment shall commence not later than three years following receipt of the original approved nursing degree.

(b) The repayment period for all loans shall be ten years from the date of the initial repayment. Repayment of the loan shall begin six months following graduation from the approved nursing program unless the recipient meets the requirements under subsections (c) and (d).

(c) For each year that a loan recipient satisfies the work requirement in section 457-A in a health care facility or provides health care services in the State after graduation, twenty per cent of the total loan amount received shall be forgiven. After five years of such work, the entire loan amount shall be forgiven.

(d) The recipient of the loan shall be responsible for notifying the board of nursing if the individual wishes to be credited with work requirement employment in lieu of repayment of the loan amount pursuant to subsection (c).

(e) The board of nursing shall enforce repayment of all loans including the use of all lawful collection procedures and the use of private collection agencies.

§457-C Annual report. The board of nursing or its contractual entity shall report to the legislature and the governor each year by September 1, beginning in 2003 regarding the operation of the nursing education loan program to include:

(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 loans awarded to each student; and

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

SECTION 3. Section 457-2, Hawaii Revised Statutes, is amended by adding five new definitions to be appropriately inserted and to read as follows:

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

"Program" means the nursing education loan program.

"Student" means any resident domiciled in this State who has been admitted to a nursing program in this State.

"Work requirement" means postgraduate employment of 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."

SECTION 4. Section 457-5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) In addition to any other powers and duties authorized by law, the board may:

(1) Adopt, [amend, or repeal] rules, pursuant to chapter 91, not inconsistent with the law, as may be necessary to enable it to carry into effect this chapter, including the definition of the scope of practice of nursing and the delegation of nursing tasks based upon professional nursing standards, which include but are not limited to the standards set forth by national certifying bodies recognized by the board;

(2) Prescribe standards for preparing persons for licensure as practical [nurses] or registered nurses and for recognition as advanced practice registered nurses under this chapter;

(3) Conduct surveys of educational programs as it may deem necessary and practical;

(4) Approve educational programs that meet the requirements of this chapter and the rules of the board;

(5) Deny or withdraw approval of educational programs for failure to meet or maintain the standards prescribed in this chapter;

(6) License qualified applicants by examination or endorsement, recognize advanced practice registered nurses, and renew, reinstate, and restore licenses and recognitions;

(7) Conduct hearings upon request of a denied applicant or upon charges calling for discipline of a licensee;

(8) Exercise the power to issue subpoenas, compel the attendance of witnesses, and administer oaths to persons giving testimony at hearings;

(9) Cause the prosecution of all persons violating this chapter and incur necessary expenses therefor;

(10) Keep a record of all its proceedings;

(11) Provide consultation, conduct conferences, forums, studies, and research on nursing education and practice;

(12) Communicate with national organizations that promote the improvement of the legal standards of practice of nursing for the protection of public health, safety, and welfare;

(13) Authorize the administration of examinations to eligible applicants for licensure as registered nurses or licensed practical nurses, or other examinations required by the board as designated in its rules;

(14) Employ, contract, and cooperate, to the extent allowable by law, with any board-approved organization in the preparation and grading of an appropriate nationally uniform examination; provided the board shall retain sole discretion and responsibility for determining the standard of successful completion of such an examination. When such a national examination is used, access to questions and answers shall be restricted by the board; [and]

(15) Develop and adopt rules as necessary relating to the practice of nursing in telehealth[.]; and

(16) Administer the nursing education loan program under sections 457-A to 457-C."

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $1,200,000, or so much thereof as may be necessary for fiscal year 2002-2003, to establish and implement the nursing education loan program to be administered by the board of nursing.

The sum appropriated shall be expended by the department of commerce and consumer affairs for the purposes of this Act.

SECTION 6. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2002 and shall be repealed on June 30, 2007; provided that sections 457-2 and 457-5(a), Hawaii Revised Statutes, shall be reenacted in the form in which they read on June 30, 2002.

INTRODUCED BY:	_____________________________