Nursing Loan Scheme: Lawmakers want to waive allowance instead
A state board of education wants lawmakers to take a different approach to financial aid programs meant to address Mississippi’s growing nursing shortage.
Earlier this year, lawmakers created the Nursing and Respiratory Therapy Education Incentive Program, which would provide nurses with money for college if they agreed to work in Mississippi for five years after obtaining their diploma. If a nurse backed out of the deal, she would have to repay the money with interest.
This repayable loan program would create more student debt in Mississippi and likely do little to address the nursing shortage, Mississippi Today reported earlier this year.
It is not yet operational because it was too complicated to implement this year for the Office of Financial Aid for Students. Now the program may never take off.
On Wednesday, members of the Post-Secondary Education Financial Aid Commission voted unanimously to ask lawmakers to cancel the forgivable loan program and replace it with a stipend to be awarded at the end of each year a nurse works in Mississippi. The nurses could use the funds to pay off federal student loans.
The move reflects a shifting political debate over Mississippi’s use of student loans to address labor shortages, as well as the board’s desire to reduce the administrative burden on the seven-person office that would implement the program. .
“It’s about saying philosophically that the state should forego loans as they are currently structured,” said Jim Turcotte, executive director of the Mississippi College Alumni Association and chairman of the Post-Secondary Board.
Members also voted to approve the rules and regulations of the forgivable loan program in the event that this proposal does not find a “champion” in the Legislative Assembly. The council has struggled to convince lawmakers to approve its demands in the past.
For prospective nursing students in Mississippi, the bottom line is that a stipend program would help them pay off their student debt, while a repayable loan program would be another way to take on even more debt.
“We’re talking about a somewhat subtle change in how we determine who owns the debt,” Turcotte said.
Mississippi has long relied on repayable loan programs to address labor shortages, said Jennifer Rogers, director of the Office of Student Financial Aid. These programs, in theory, can solve labor shortages by using student debt as a tool to create more college graduates in a field that needs labor.
To administer these programs, the state must essentially become a bank, which means the forgivable loans are a financial boon to Mississippi. Rogers said his office collects about $1 million each year from borrowers because debt is only forgiven in two circumstances — death or permanent disability.
“We have some in the books going back to the late 1970s, before I was even born,” Rogers said.
“We could continue to service these loans forever and ever,” she added.
While the state benefits financially, forgivable loans do little to address labor shortages.
Rogers told the board that this is especially true for the state’s nursing shortage because it is not caused by a lack of Mississippians wanting to go to nursing school. In fact, nursing schools, understaffed, are forced to turn away thousands of applicants every year.
“Students want to go to nursing school, they want to be nurses, but there’s still a shortage of nurses in Mississippi,” Rogers said. “So what is causing this shortage?”
With the board’s preferred approach, a stipend program, Rogers said the state would see an immediate benefit. The stipend could even attract nurses from across the country, seeking help with student debt, to work in Mississippi hospitals.
“They’re immediately going to see students working in the regions,” Rogers said.
Barney Daly, board member and chairman of North Metro at Trustmark National Bank, asked if there was a downside to a loan repayment or stipend scheme.
Rogers responded that these programs do not help students pay for their education initially.
After about half an hour of discussion, Turcotte called for a vote. He asked if the board wanted to discuss the proposal further and members seemed surprised no one had more to say, given the strength of the discussion up to this point.
“Is the horse dead? Rogers asked.