71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
Enrolled
Senate Bill 331
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Governor John A. Kitzhaber,
M.D., for Oregon Student Assistance Commission)
CHAPTER ................
AN ACT
Relating to student loans for nursing programs; creating new
provisions; amending ORS 348.115, 348.117 and 348.570;
repealing ORS 348.115 and 348.117; appropriating money; and
declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + As used in sections 2 and 3 of this 2001 Act:
(1) 'Commission' means the Oregon Student Assistance
Commission.
(2) 'Nurse' means any person who is licensed under ORS 678.010
to 678.410 as a registered nurse.
(3) 'Nursing critical shortage area' means a locality or
practice specialty identified as such by the Oregon State Board
of Nursing, in consultation with the Office of Rural Health,
under section 2 of this 2001 Act.
(4) 'Qualifying loan' means any loan made to a nursing student
under:
(a) Programs under Title IV, parts B, D and E, of the Higher
Education Act of 1965, as amended; or
(b) The Nursing Student Loan and Health Education Assistance
Loan programs administered by the United States Department of
Health and Human Services. + }
SECTION 2. { + (1) There is created the Nursing Services
Program, to be administered by the Oregon Student Assistance
Commission pursuant to rules adopted by the commission. The
purpose of the program is to provide loan repayments on behalf of
nurses who agree to practice in nursing critical shortage areas.
(2) To be eligible to participate in the program, a nurse or
prospective nurse shall submit a letter of interest to the
commission. Applicants who are selected for participation
according to criteria adopted by the commission under subsection
(3) of this section shall sign a letter of agreement stipulating
that the applicant agrees to abide by the terms of the program
described in section 3 of this 2001 Act.
(3) The commission shall by rule adopt, in consultation with
the Oregon State Board of Nursing and the Office of Rural Health,
criteria for participation in the program.
Enrolled Senate Bill 331 (SB 331-A) Page 1
(4) The Oregon State Board of Nursing by rule shall annually
identify, in consultation with the Office of Rural Health, those
areas that are considered nursing critical shortage areas.
(5) Amounts paid to the commission as penalties under section 3
of this 2001 Act shall be credited and deposited in the Nursing
Services Account created under ORS 348.570. The commission, in
consultation with the Oregon State Board of Nursing, by rule
shall allow waiver of all or part of any fees or penalties owed
to the commission due to circumstances that prevent a nurse from
fulfilling a service obligation under section 3 of this 2001
Act. + }
SECTION 3. { + (1) A nurse or prospective nurse applicant who
is a graduate of an accredited nursing program with a
baccalaureate or associate degree and who wishes to participate
in the Nursing Services Program established under section 2 of
this 2001 Act shall agree that:
(a) For each year of nursing school, the applicant designates
an agreed amount, not to exceed $8,800 or the amount determined
under subsection (2) of this section, as a qualifying loan for
the program.
(b) In the four years following the execution of a Nursing
Services Program agreement with the Oregon Student Assistance
Commission, a nurse agrees to practice for at least two full
years in a nursing critical shortage area in Oregon.
(c) For not less than two nor more than four years that the
nurse practices in a nursing critical shortage area, the
commission shall annually pay:
(A) For full-time practice, an amount equal to 25 percent of
the total of all qualifying loans made to the nurse.
(B) For half-time practice, an amount equal to 12.5 percent of
the total of all qualifying loans made to the nurse.
(d) If the nurse does not complete the full service obligation
set forth in paragraphs (b) and (c) of this subsection, the
commission shall collect 100 percent of any payments made by the
commission to the nurse under the Nursing Services Program. In
addition, the commission shall assess against the nurse a penalty
equal to 50 percent of the qualifying loans and interest paid by
the commission.
(2)(a) On July 1 of each year, beginning in 2002 and ending in
2007, the Oregon Student Assistance Commission shall adjust the
maximum dollar amount allowed under subsection (1)(a) of this
section as a qualifying loan by multiplying the amount by a
cost-of-living adjustment as specified in this subsection.
(b) The cost-of-living adjustment applied on July 1 each year
by the commission shall be equal to the ratio of the seasonally
adjusted United States City Average Consumer Price Index for All
Urban Consumers as published by the Bureau of Labor Statistics of
the United States Department of Labor for April of the calendar
year divided by the value of the same index for April 2001.
(c) Beginning on July 1, 2008, the commission shall use the
cost-of-living adjustment calculated for July 1, 2007.
(d) If the value of the dollar amount determined under
paragraph (a) of this subsection is not a multiple of $100, the
commission shall round the dollar amount to the next lower
multiple of $100. + }
SECTION 4. ORS 348.115 is amended to read:
348.115. (1) In addition to any other financial aid provided by
law, the Oregon Student Assistance Commission, pursuant to rule,
may award loans to a qualified resident of this state upon the
resident's acceptance and entry into a baccalaureate or associate
Enrolled Senate Bill 331 (SB 331-A) Page 2
degree nursing program at a post-secondary institution in Oregon.
The loans may be forgiven upon fulfillment of the requirements of
subsection (4) of this section.
(2) The loans authorized by subsection (1) of this section:
(a) Shall be made based on achievement, ability, need and
motivation;
(b) Shall be made on an annual basis subject to renewal upon
satisfactory performance for the duration of the nursing program;
and
(c) Shall be made in annual amounts not to exceed 50 percent of
the sum of tuition, fees and room and board for each
participating student.
(3) Priority in awarding loans shall be given to:
(a) A resident employed in the health care field at the time of
application; and
(b) A resident who agrees to practice in an area where there is
a critical shortage of nurses, as determined annually by the
Oregon State Board of Nursing in consultation with the Office of
Rural Health.
(4) The resident receiving a loan under this section must agree
to practice nursing { - full-time - } { + at least
half-time + } in an area described in subsection (3)(b) of this
section or in an area of specialty that is underserved for one
calendar year for each academic year for which the loan is
received. If the resident does not fulfill the practice
requirement within five years of graduation, the amount received
shall be considered a loan, repayable as provided in ORS 348.117,
for each year for which the practice requirement is not met.
SECTION 5. ORS 348.117 is amended to read:
348.117. (1) Student borrowers under ORS 348.115 shall be
required to pay at least seven percent interest per annum on the
unpaid balance from the date of the loan as provided in
subsection (5) of this section.
(2) Repayment of the principal and accruing and deferred
interest on loans shall be commenced not later than 12 months
after the student's completion of the nursing program or other
termination of the student's education.
(3) Repayment of loans shall be deferred upon application
therefor for up to three years during which:
(a) The student borrower is enrolled as at least a half-time
student in a subsequent nursing program leading to a nursing
degree higher than that attained in the initial program; { +
or + }
{ - (b) The student borrower is employed as a nurse in this
state on at least a half-time basis; or - }
{ - (c) - } { + (b) + } The student borrower shows
inability to locate suitable employment.
(4) Repayment commences under the usual terms if the student
borrower ceases to be employed as a nurse in this state before
completing the practice requirements set forth in ORS 348.115
(4).
(5) Repayment shall be completed in a maximum of 120 months
from the time repayment is commenced. However, nothing in this
subsection is intended to prevent repayment without penalty at an
earlier date than provided in this subsection or to prohibit the
Oregon Student Assistance Commission from extending the repayment
period to a date other than specified by this subsection.
(6) A student who borrows under ORS 348.115 shall have 100
percent of principal and accrued interest on loans under this
section, ORS 348.115, 353.450, 442.470, 442.520, 442.550 to
Enrolled Senate Bill 331 (SB 331-A) Page 3
442.570 and 656.256 canceled if it can be documented that, within
five years of graduation { - , - } { + :
(a) + } The student has completed one calendar year of
full-time employment as a nurse in the State of Oregon for each
academic year in which a loan was received { + ; or
(b) The student has completed two calendar years of half-time
employment as a nurse in the State of Oregon for each academic
year in which a loan was received + }.
(7) A student who borrows under this section, ORS 348.115,
353.450, 442.470, 442.520, 442.550 to 442.570 and 656.256 and
completes at least one calendar year of the practice obligation
described in subsection (6) of this section shall have the amount
of principal and accrued interest on loans under this section,
ORS 348.115, 353.450, 442.470 442.520, 442.550 to 442.570 and
656.256 canceled for each calendar year of qualifying practice
{ - , - } { + that is:
(a) For full-time practice, + }equal to the principal and
accrued interest on the loan borrowed for the comparable academic
year of award { + ; or
(b) For half-time practice, equal to half of the principal and
accrued interest on the loan borrowed for the comparable academic
year of the award + }.
(8) Repayment of any remaining principal and interest shall be
waived upon the death or total and permanent disability of the
student borrower.
SECTION 6. ORS 348.570 is amended to read:
348.570. (1) There is established in the State Treasury a fund,
separate and distinct from the General Fund, to be known as the
Oregon Student Assistance Fund for investment as provided by ORS
293.701 to 293.820 and for the payment of the expenses of the
Oregon Student Assistance Commission in carrying out the purposes
of ORS 348.210 to 348.250, 348.505 to 348.615, 348.696 and
348.992. Interest earned by the fund shall be credited to the
fund.
(2) There is established in the State Treasury a fund, separate
and distinct from the General Fund, to be known as the Student
Loan Guarantee Fund, which may be invested in the same manner as
the Oregon Student Assistance Fund. This fund shall receive funds
from federal, state or private sources for the purpose of
guarantying payment of loans made by eligible lending
institutions to student residents of the State of Oregon who are
enrolled or accepted for enrollment at any eligible institution,
nonresident students enrolled or accepted for enrollment in an
institution of higher education or community college in Oregon,
and parents of those students, under the provisions of the Higher
Education Act of 1965 as amended and for administrative expenses
of guarantying loans. This fund, including the interest earnings
on the fund, if any, is continuously appropriated to the
commission for those purposes for which such funds were provided
to, received or collected by the commission.
(3) There is established in the State Treasury a fund, separate
and distinct from the General Fund, to be known as the
Alternative Student Loan Program Fund for { - investments - }
{ + investment + } as provided by ORS 293.701 to 293.820 and
{ + for + } the payment of expenses { - by - } { + of + }
the commission in carrying out the purposes of ORS 348.625 to
348.695. This fund, including the interest earnings on the fund,
if any, is continuously appropriated to the commission for those
purposes for which such funds were provided to, received or
collected by the commission.
Enrolled Senate Bill 331 (SB 331-A) Page 4
{ + (4)(a) There is established in the General Fund an
account to be known as the Nursing Services Account. Funds in the
account shall be used for the payment of expenses of the Nursing
Services Program created in section 2 of this 2001 Act.
(b) The account shall consist of:
(A) Funds appropriated to the Oregon Student Assistance
Commission for deposit into the account;
(B) Collections and penalties received by the commission under
section 3 of this 2001 Act; and
(C) Any donations or grants received by the commission for
purposes of the Nursing Services Program.
(c) Any funds in the account that are not expended in any
biennium shall be retained in the account and may be expended in
the next biennium. + }
SECTION 7. { + There is appropriated to the Oregon Student
Assistance Commission, for the biennium beginning July 1, 2001,
out of the General Fund, the amount of $315,000, for deposit into
the Nursing Services Account established by ORS 348.570 for the
Nursing Services Program. + }
SECTION 8. { + ORS 348.115 and 348.117 are repealed on July 1,
2012. + }
SECTION 9. { + This 2001 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2001 Act takes effect July 1,
2001. + }
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Passed by Senate April 6, 2001
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House June 7, 2001
...........................................................
Speaker of House
Enrolled Senate Bill 331 (SB 331-A) Page 5
Received by Governor:
......M.,............., 2001
Approved:
......M.,............., 2001
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2001
...........................................................
Secretary of State
Enrolled Senate Bill 331 (SB 331-A) Page 6