Report Title:

Nursing; Loan Forgiveness

 

Description:

Establishes a loan forgiveness program for individuals who receive a nursing degree from the University of Hawaii and are employed in the state as registered nurses.  (HB2706 HD1)

 

HOUSE OF REPRESENTATIVES

H.B. NO.

2706

TWENTY-FOURTH LEGISLATURE, 2008

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO THE UNIVERSITY OF HAWAII SYSTEM.

 

 

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

 

     SECTION 1.  The legislature finds that there is a need to provide incentives for students in the University of Hawaii system to choose careers in registered nursing in Hawaii.  Hawaii is facing a shortage of registered nurses.  According to the Hawaii Center for Nursing, demand for registered nurses between the years 2000 and 2020 is expected to grow by 55 per cent in the state, while the supply of registered nurses is expected to grow by only 13.8 per cent.  It is anticipated that during this period, demand for registered nurses will be increased by 4,554 new full-time equivalent positions, while almost 80 per cent of today's registered-nursing workforce, or 8,397 nurses, will retire.  Yet in 2003, Hawaii nursing schools graduated only 330 students.  At this rate of graduation, replacing retiring nurses and meeting new demand will be impossible.

     The legislature further finds that a shortage of nursing-school faculty positions, resulting in Hawaii's nursing schools turning away hundreds of qualified students, has been cited as a major factor in the nursing shortage.  Regardless, inadequate incentives exist for students to seek a nursing education and, upon graduating, to practice nursing in Hawaii.

     The purpose of this Act is to create an incentive by requiring the University of Hawaii system to establish, within its state higher education loans program, a loan forgiveness program for loan recipients who, upon graduation from nursing school, engage in the occupation of registered nurse in Hawaii.

     SECTION 2.  Section 304A-602, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§304A-602[]]  Repayment of state higher education loans; loan forgiveness; collection.  (a)  All loans made under the state higher education loan fund shall bear interest at five per cent simple interest.  Repayment of principal and interest charges shall commence nine months after graduation or after a borrower ceases to be enrolled at least half-time in a degree program and shall be paid in periodic installments within a ten-year period.  The university may charge late fees and all other reasonable costs for the collection of delinquent loans.  The board of regents, upon application by the student and upon a showing of good cause, may defer repayment of the loan and commencement of interest.  Liability for repayment of a loan shall be canceled upon the death or permanent total disability of the borrower.

     (b)  Upon a showing of proof that the loan recipient received a nursing degree from the University of Hawaii system and is employed in the state in the practice of nursing as a registered nurse under chapter 457, one-tenth of the total amount of the loan and interest shall be waived for every year of the first five years, and the remaining balance shall be waived after the sixth year that a loan recipient is employed as a registered nurse in the state.  If a loan recipient fails to be so employed for a minimum of ten consecutive years from the loan recipient's original date of employment, excluding sabbaticals and other temporary leaves of absence, the loan recipient shall repay any remaining loan balance at the rate of five per cent simple interest.

     [(b)] (c)  The university may spend out of the state higher education loan fund up to two per cent of the total amount of loans outstanding for collection and administrative expenses.  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 state higher education loan fund.

     [(c)] (d)  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."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on January 1, 2050.