Nursing Workforce Development

Nurse Faculty Loan Program

Authorizing Legislation: Title VIII, Section 846A of the Public Health Act, as amended by the Nurse Reinvestment Act of 2002.

Program Description and Accomplishments
The Nurse Faculty Loan Program (NFLP), implemented in FY 2003, seeks to increase the number of qualified nursing faculty. The program supports the establishment and operation of a loan fund within participating schools of nursing to assist nurses in completing their graduate education to become qualified nurse faculty. Accredited collegiate schools of nursing are eligible to apply for funding. Eligible schools must offer an advanced education nursing degree program(s) that will prepare the graduate student to teach.

The National League for Nursing, the American Association of Colleges of Nursing (AACN), and the Robert Wood Johnson Foundation published data that revealed the shortage of nurse faculty and the implications the shortage would have on the nursing workforce. According to AACN preliminary data, more than 30,000 qualified applicants have been turned away from nursing schools in 2007. The AACN reported over 42,000 in 2006. The primary barrier to accepting all qualified students at nursing colleges and universities continues to be the insufficient number of qualified nursing faculty. The organization expects that figure to further rise when final admissions data becomes available (AACN release, 12/3/2007). The NFLP serves as an incentive for nurses to select careers as nurse educators.

The Department of Health and Human Services (HHS), acting through the Health Resources and Services Administration (HRSA) makes an award and enters into an agreement with the school to establish and operate a distinct account for the NFLP loan fund (a revolving fund). The award to the school, the Federal Capital Contribution (FCC), must be deposited into the NFLP loan fund. The school is required to deposit the Institutional Capital Contribution (ICC) that is equal to no less than one-ninth of the FCC. The account may only be used to make loans to graduate nursing students who agree to meet the requirements of the NFLP.

Participating schools make NFLP loans to eligible graduate (master’s and doctoral) nursing students to complete the nursing education program. Students may receive NFLP loans up to $30,000 per year for a maximum of 5 years. Following graduation from the nursing program, loan recipients may cancel up to 85 percent of the loan principal and interest in exchange for service as a full-time nursing faculty at a school of nursing.

The loan cancellation is made over a four-year period, as follows: 20 percent of the principal and interest may be canceled for each of the first, second and third years, totaling up to 60 percent, followed by 25 percent for the fourth year of full-time employment as a nursing faculty. The NFLP loans accrue interest at a rate of 3 percent per annum for loan recipients who establish employment as nurse faculty. Payment on the remaining 15 percent of the loan balance is deferred during the cancellation period.

There are currently 119 schools that participate in the NFLP (this number reflects new awards and awards based upon participating schools with excess cash). The participating schools continue to request an increased level of funding which reflects the true demand among the student population. Thus far, the NFLP has facilitated the graduation of 162 students qualified to fill nurse faculty positions. In FY 2007, approximately 418 continuing students received NFLP loan support. Each year has seen an increase in the number of participating schools coupled with an even greater increase in the number of new students requesting NFLP support.

In FY 2006:

• 115 schools participated in the NFLP
  
• 1,000 students were supported (367 continuing and 633 new full-time students)

In FY 2007:

• 119 schools participated in the NFLP
  
• 1,151 students were supported (418 continuing and 733 new full-time students)

The consistent increase in school participation and supported students, and the steady increase in graduate program enrollment and graduation demonstrate NFLP’s success.

According to a Special Survey on Vacant Faculty Positions released by AACN in July 2007, a total of 767 faculty vacancies were identified at 344 nursing schools with baccalaureate and/or graduate programs across the country. Besides the vacancies, schools cited the need to create an additional 43 faculty positions to accommodate student demand. The data show a national nurse faculty vacancy rate of 8.8 percent which translates into approximately 2.2 faculty vacancies per school. Most of the vacancies (86.2 percent) were faculty positions requiring or preferring a doctoral degree.

While the NFLP has contributed to confronting the current deficit in nursing faculty, this shortage is not a stagnant figure due to several factors. One of these is an imminent wave of nurse faculty retirements expected over the next decade. According to an article published in the March/April 2002 issue of Nursing Outlook titled The Shortage of Doctorally Prepared Nursing Faculty: A Dire Situation, between 200 and 300 doctorally-prepared faculty will be eligible for retirement each year from 2003 through 2012, and between 220 and 280 master's-prepared nurse faculty will be eligible for retirement between 2012 and 2018. By continuing to make advanced education nursing financially accessible for more nurse faculty candidates, HHS believes that it can contribute strongly to confronting the nursing shortage.

Most of the Health Professions Title VII and Title VIII, PHS Act programs were reviewed as a unit in 2002 using the Program Assessment Rating Tool (PART). This program was included in that assessment. See Summary of the Request.

Funding includes costs associated with grant reviews, processing of grants through the Grants Administration Tracking and Evaluation System (GATES) and HRSA’s electronic handbook, and follow-up performance reviews.

Funding History

Budget Request
The FY 2009 Request of $9,319,000 is an increase of $1,459,000 above the FY 2008 Enacted level. The increase will support 23 additional schools receiving funds and an estimated 183 additional nurse educator students. The total request will support 143 schools receiving funds under the Nurse Faculty Loan Program which supports student loans of up to $30,000 in participating institutions. Approximately 757 nurse educator students will be supported.

NA – Not Applicable