Clinician Recruitment and Service
Nursing Loan Repayment and Scholarship Programs

Authorizing Legislation - Section 846 of the Public Health Service Act

Program Description and Accomplishments
The Nursing Education Loan Repayment Program (NELRP) is a financial incentive program under which individual registered nurses (RNs) enter into a contractual agreement with the Federal government to work full-time in a health care facility with a critical shortage of nurses in return for repayment of qualifying nursing educational loans. NELRP repays 60 percent of the principal and interest on nursing education loans of RNs with the greatest financial need in exchange for two years of full-time service at a health care facility with a critical shortage of nurses. Participants may be eligible to receive an additional 25 percent of the original loan balance for an additional year of full-time service in a critical shortage facility. A funding preference is given to RNs with the greatest financial need.

The Nurse Scholarship Program (NSP) offers scholarships to individuals attending accredited schools of nursing in exchange for a service commitment payback of at least two years in health care facilities with a critical shortage of nurses after graduation. The NSP award reduces the financial barrier to nursing education for all levels of professional nursing students, thus increasing the pipeline. A funding preference is given to qualified applicants who have zero expected family contribution and who are enrolled full-time in an undergraduate nursing program.

NELRP and NSP work together in an effort to address the need for nurses in Critical Shortage Facilities. As measurements of that effort:

In FY 2005:

• NELRP awarded 100 percent of its recourses to nurses in Critical Shortage Facilities, meeting the target of 100 percent,
  
• The percentage of NELRP nurses who committed to work in a Critical Shortage Facility one year beyond the service obligation was 38 percent, which was just short of the target of 40 percent, and
  
• NELRP nurses were working in 86 percent of the States, which was short of the target of 93 percent.

In FY 2006:

• NELRP awarded 100 percent of its recourses to nurses in Critical Shortage Facilities, exceeding the target of 90 percent,
  
• The percentage of NELRP nurses who committed to work in a Critical Shortage Facility one year beyond the service obligation was 45 percent, which met the target of 45 percent, and
  
• NELRP nurses were working in 92 percent of the States, which fell just short of the target of 93 percent.

In FY 2007:

NELRP made 586 new loan repayment contracts; and 902 loan repayers were working in Critical Shortage Facilities.

NSP made 172 new scholarships awards, and 337 scholars were working in Critical Shortage Facilities.

The NELRP was assessed during FY 2002 using the Program Assessment Rating Tool (PART) and received a rating of Adequate. The assessment noted that research has found health care quality and patient well-being appear to be impacted by the number of nurses working in the facility relative to the number of patients in their care. Additional annual performance measures were identified at that time, covering program participants’ extension of their service obligations and retention in service to shortage facilities following completion of contractual obligations.

To contribute to program performance, NELRP will test the methodology for identifying Critical Shortage Facilities for nurses, in order to better target program resources to areas and facilities of greatest need. Both NSP and NELRP will be part of the development of an information system to replace the legacy Nursing Information System, expected to be completed in 2009.

Funding History

Budget Request
The FY 2009 Request of $43,744,000 is $13,232,000 over the FY 2008 Enacted level. The funds will support a commitment from nurses and nursing students to work in facilities with a critical shortage of nurses. Funds in the amount of $29,619,040 will support approximately 622 loan repayment awards for RNs agreeing to work in health care facilities with a critical shortage of nurses, at an average unit cost per contract of $47,619. This is an increase of 36 over the baseline projection of 586 loan repayment contracts. The NELRP provides an economic incentive to these nurses to begin and/or continue practice in these health care facilities. Funds in the amount of $14,124,960 out of the total request will be used to support 212 NSP scholarship awards, at an average unit cost per scholarship of $66,627, an increase of 40 scholarships over the projected baseline of 172 new nursing scholarships.

There is a shortage of nurses at health facilities in certain areas of the United States. The demand has intensified for nurses prepared in programs that emphasize leadership, patient education, case management, and care across a variety of delivery settings. National and State studies, including the Bureau’s Finding from the National Sample Survey of Registered Nurses - March 2004 and the Projected Supply, Demand and Shortages of Registered Nurses: 2000-2002 report, demonstrate that the aging nursing workforce could reduce the supply of RNs in the future. Both the NELRP and the NSP are part of the National strategy to alleviate the immediate shortfall in the number of working nurses and to assure an adequate supply of nurses in the future.

Funding for NELRP and NSP will continue to address the critical shortage of nurses across the U.S. As a measurement of that effort:

In FY 2009:

• NELRP and NSP expect to meet the goal of 85 percent of participants working in Critical Shortage Facilities within four months of licensure,
  
• NELRP and NSP expect to exceed the goal of 90 percent of participants working in Critical Shortage Facilities,
  
• NELRP and NSP expect to meet the goal of 45 percent of participants working in Critical Shortage Facilities one year beyond completion of the service obligation, and
  
• NELRP and NSP expect to meet the goal of having participants working in 93 percent of the States.

See Table