SENATE BUDGET AND APPROPRIATIONS COMMITTEE

 

STATEMENT TO

 

SENATE, No. 2872

 

with committee amendments

 

STATE OF NEW JERSEY

 

DATED:  JUNE 27, 2022

 

      The Senate Budget and Appropriations Committee reports favorably and with committee amendments Senate Bill No. 2872.

      As amended by the committee, this bill establishes a Behavioral Healthcare Provider Loan Redemption Program within the Higher Education Student Assistance Authority and appropriates $5 million from the General Fund for the bill’s purposes. 

      As amended, the program will provide for the redemption of a portion of the eligible qualifying loan expenses of program participants for each period of service at an approved site.  Under the bill, approved sites include community providers of behavioral and mental health services identified by the Higher Education Student Assistance Authority, in consultation with the Department of Health, for inclusion in the program.  Approved sites may include, but need not be limited to, providers operated by a nonprofit, institution of higher education, school district, county, the Department of Children and Families, the Department of Human Services, and the Department of Health. The bill will benefit “eligible behavioral healthcare providers,” which include psychiatrists, psychologists, licensed clinical social workers, psychiatric nurse mental health clinical specialists, board certified behavior analysts; licensed clinical alcohol and drug counselors; and any other professionals identified by the executive director of the authority for inclusion in the program. 

      Under the bill, to be eligible to participate in the program, an applicant is required to:

      (1)  be a resident of the State;

      (2)  be employed, or plan to be employed, as an eligible behavioral healthcare provider at an approved site; and

      (3) submit an application in accordance with such procedures and requirements as are established by the executive director.

      The bill directs the executive director or the director’s designee to select the program participants from among those applicants who meet the eligibility criteria, subject to available funds.  A program participant will be required to enter into a written contract with the authority to participate in the program.  The contract will specify the duration of the applicant's required service and the total amount of eligible student loan expenses to be redeemed by the State in return for service.

      The program will provide loan redemption of up to $50,000 of principal and interest of eligible student loan expenses following the completion of two full years of service satisfactorily completed by the program participant.  A program participant who completes four full years of service satisfactorily shall be eligible to receive a second redemption amount of $50,000 at the completion of the fourth year.  A program participant who completes six full years of service satisfactorily shall be eligible to receive a third and final redemption amount of $50,000 at the completion of the sixth year.    The total loan redemption amount for a program participant, for six years of service, shall not exceed $150,000.

      The bill provides for the nullification of the contract under certain circumstances.  The bill prohibits a student who is participating in any other State tuition or loan redemption program or in the federally administered National Health Service Corps Loan Repayment Program from participating simultaneously in the Behavioral Healthcare Provider Loan Redemption Program.

      Under the bill, the executive director of the authority is directed to annually award incentive grants, within the limits of available State appropriations, to program participants who work primarily with children and adolescents.  An incentive grant will be capped sat $5,000.  A program participant may be eligible to receive multiple incentive grants during their participation in the program.   As amended, the bill provides that no more than eight percent of the $5 million appropriated to the authority for the purposes of implementing the grant program may be used for the administrative costs of the program.

 

COMMITTEE AMENDMENTS:

      The committee amendments provide that an approved site may also include a community provider of behavioral and mental health services operated by an institution of higher education.

      The committee amendments revise the provision of the bill providing that a student will be ineligible to participate in the program if the student is participating in the federally administered National Health Service Corps Loan Repayment Program, to extend the prohibition to any student who is participating in any other State tuition or loan redemption program as well.

      The committee amendments provide that, of the $5 million appropriated under the bill to implement the loan redemption program, no more than eight percent may be used for administrative costs.

 

FISCAL IMPACT:

      The Office of Legislative Services finds that first year costs to the State for implementing the Behavioral Healthcare Provider Loan Redemption Program will be $5 million due to the bill’s appropriation in that amount. The appropriation would provide first year funding for loan redemption payments to eligible program participants and for incentive grants to a subset of program participants. However, the bill does not specify the amount of the appropriation that would go for each the loan redemption payments and the incentive grants.

      The bill provides to a program participant the redemption of principal and interest for two-year periods of service, up to three such periods, for a maximum of $150,000 in total loan redemption. The bill also requires the Executive Director of the Higher Education Student Assistance Authority to award incentive grants, not to exceed $5,000 per grant, to eligible program participants who work primarily with children and adolescents.

      Costs following the first year of enactment are indeterminate and would be dependent on the number of program participants in each year as well as the participants’ eligible qualifying loan expense amounts and the number of program participants receiving incentive grants.

      The State would also experience minor revenue increases to the extent that program participants nullify their contracts for the redemption of loans under the program and are required to repay the State for the full amount of the participant’s loan or the portion of the loan that has not been redeemed by the State in return for partial fulfillment of a service contract.