August 20, 2002
NURSE REINVESTMENT ACT
By: Saul Spigel, Chief Analyst
You asked for a summary of the Nurse Reinvestment Act and a discussion of how it may affect or present models for Connecticut.
The Nurse Reinvestment Act (PL 107-205), which President Bush signed on August 1, creates programs for (1) scholarships for people who agree to serve at health care facilities with a critical shortage of nurses, (2) nurse retention and career ladders, (3) loan forgiveness for nursing faculty, (4) public service announcements, and (5) training healthcare workers to treat elderly people.
It is difficult at this time to calculate the act's potential effect on Connecticut. The act authorizes but does not appropriate any funds for its new programs; funding is dependent on the outcome of appropriations bills still under consideration. If money is appropriated, most of the act's initiatives, except for scholarships, will be funded through grants to nursing schools, health facilities, government agencies, and other entities. Before any of the act's initiatives will be felt in Connecticut, these entities must first seek and obtain funding.
Connecticut could broaden its existing nurse loan repayment program to cover the same types of health facilities as the federal act, and it could help nursing schools to establish loan funds to encourage people to join their faculties.
NURSE REINVESTMENT ACT COMPONENTS
Scholarships and Loan Forgiveness
The act establishes nursing school scholarships for individuals who agree to serve full-time for two years (or part-time for an equivalent period) at a health facility with a critical shortage of nurses. Students who have been accepted or who are enrolled on a full- or part-time basis in a nursing school are eligible. Preference goes to those with the greatest financial need. The act requires the Health and Human Services (HHS) Department secretary to provide scholarships during the next two federal fiscal years (October 2002 through September 2004) and permits him to do so afterward.
Under the act, a scholarship recipient can fulfill his obligation by working at a hospital, federally qualified health center, nursing home, home health agency, hospice, state or local health department, ambulatory surgical center, rural health center, or any other facility the secretary designates. The act also broadens the existing federal nurse loan forgiveness program to cover work at these facilities.
Education, Practice Development, and Retention Grants
The act establishes grants for educating and retaining nurses and developing practice specialties for them. The grants can go to nursing schools, academic health centers, nursing centers, state and local governments, and others approved by the HHS secretary. They can use the grants for:
1. education activities such as baccalaureate, internship, and residency programs and training in new technologies;
2. retention activities such as (a) career ladders programs like specialty and cross training, career counseling, and mentoring and (b) enhancing collaboration between nurses and other health professionals and promoting nurses involvement in health care facilities' clinical decision making; and
3. practice development activities, including (a) providing care for underserved populations such as elderly and homeless people and domestic violence victims, (b) establishing or expanding nurse practice arrangements in noninstitutional settings to demonstrate ways to improve access to primary care, (c) developing skills in managed care and quality improvement, and (d) developing cultural competencies.
In FYs 2003 to 2005, the act requires the secretary to give preference to internship and residency programs and retention activities when he awards grants of any new appropriations (that is, appropriations above the FY 2001-02 level).
Loans and Loan Forgiveness for Nursing Faculty
The act provides a federal incentive for nursing schools to establish loan funds for students who agree to serve as nursing faculty when they graduate. It authorizes a nine-to-one federal match ($9 in federal funds for $1 in institutional funds) for nursing schools that set up such funds and agree to follow these federal rules.
1. Loans are limited to $30,000 a year to an individual; repayment is over 10 years at 3% interest, beginning nine months after coursework is completed.
2. The schools must cancel 20% of a loan's principal and interest for each of the borrower's first three years of work and 25% after the fourth year.
3. If a school determines the borrower will not complete school or will not serve as a faculty member, the borrower must pay market rate interest on the loan.
Public Service Announcements
The act authorizes grants to support advertising campaigns that promote the nursing profession and nursing education programs, inform people about financial aid for nursing education, highlight practicing nurses as a recruitment tool, and encourage people from disadvantaged background to enter the field. The grants can go to nursing schools, nursing centers, academic health centers, state and local governments, and others approved by the HHS secretary.
Geriatric Nursing Education
The act authorizes grants to (1) provide training or continuing education to people who provide geriatric care, (2) develop and disseminate curricula on healthcare treatment of elderly people, or (3) training faculty in geriatrics. The grants are available to nursing schools, health care facilities, certified nurse assistant (CNA) training programs, and school-facility or facility-CNA program partnerships.
Expand State Loan Repayment Program
The Department of Public Health administers a state loan repayment program that parallels the federal program (CGS § 19a-7d). Currently, it covers nurse practitioners and others who work in community health centers in federally designated health professional shortage areas. The state could, following the Nurse Reinvestment Act model, broaden the kinds of facilities in which a nurse could work to be eligible for loan repayment. The act includes hospitals, nursing homes, state and local health departments, home health agencies, and other facilities with a critical shortage of nurses. But doing this without increasing funds for the program could potentially reduce the number of nurses available to work in community health centers.
Enhance Nursing Faculty Loan Funds
The act's nursing faculty loan program requires an institutional match to obtain federal money to capitalize a school's loan fund. The state could provide some or all of a school's matching funds, or it could provide a “bonus” grant to schools that receive federal funds.
Connecticut already authorizes scholarships and loan forgiveness for nursing students at all levels (CGS § 10-162a), but no funds have recently been appropriated for this Department of Higher Education program. Under the law, nurses must work in the state for five years to have their loans forgiven. The Nurse Reinvestment Act calls for only two years of full-time work.