SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

[Second Reprint]

ASSEMBLY, No. 2801

STATE OF NEW JERSEY

DATED:  DECEMBER 8, 2025

      The Senate Budget and Appropriations Committee reports favorably Assembly Bill No. 2801 (2R).

      As reported, this bill renames and broadens eligibility for the Primary Care Practitioner Loan Redemption Program established within the Higher Education Student Assistance Authority (HESAA).

      The bill specifically:

      (1)  renames the program as the “Health Care Professional Loan Redemption Program”;

      (2)  provides for the participation in the program of psychiatrists and other health professionals working in fields designated by the Commissioner of Health for inclusion in the program;

      (3)  permits the Commissioner of Health, after consultation with the Commissioner of Labor and Workforce Development and the Director of Consumer Affairs, to designate additional health care fields experiencing critical Statewide labor shortages for inclusion in the program;

      (4)  requires the HESSA to annually submit a report on the Health Care Professional Loan Redemption Program to the Governor and the Legislature no later than August 1 of each year;

      (5)  increases the maximum loan redemption amount under the program from $120,000 to $200,000;

      (6)  expands the definition of “State designated medically underserved area” to include municipalities where more than 50 percent of households are at or below 185 percent of the federal poverty line, and municipalities with a medically underserved area or population designation reflecting health status and economic indicators, as determined by the United States Health Resources and Services Administration;

      (7)  permits a program participant to identify an approved site for designation and approval under the program;

      (8)  establishes criteria for a site to be automatically designated as an approved site under the program; and

      (9)  establishes eligibility requirements for approved sites and prohibits the HESAA from requiring any additional eligibility requirements for approved sites.

      As reported by the committee, Assembly Bill No. 2801 (2R) is identical to Senate Bill No. 780 (1R), which was also reported by the committee on this date.

FISCAL IMPACT:

      The Office of Legislative Services (OLS) determines that this bill will result in a State cost increase of up to $2.5 million over the first four years associated with expanding eligibility for the Primary Care Practitioner Loan Redemption Program, renamed the Health Care Professional Loan Redemption Program, and increasing the maximum loan amount eligible for redemption under the program.  The OLS notes that the FY2024 and FY2025 appropriations acts included budget language and funding to increase the maximum loan redemption amounts in accordance with the provisions of this bill, however, this provision was not included in the FY2026 Appropriations Act.

      Based on current cohort sizes, not taking into account any change in participation that may occur as a result of this bill, and assuming that every participant has the maximum eligible loan amount redeemed, the increased costs in each fiscal year are likely to be $278,400 in the first year, $507,200 in the second year, $753,600 in the third year, and $1.0 million in the fourth year and each subsequent year.  By the fourth year, inclusive of the incremental spending resulting from this bill, total annual expenditures on the Health Care Professional Loan Redemption Program would be approximately $2.2 million.

      The bill would repeal a section of law requiring 25 percent of the funds appropriated for the Primary Care Practitioner Loan Redemption Program to be used for the Nursing Faculty Loan Redemption Program.  This could result in a change in funding for either program, contingent on the amounts appropriated in the annual appropriations acts.  The FY2025 Appropriations Act includes separate funding for each program and includes language that prohibits funds appropriated for the Primary Care Practitioner Loan Redemption Program to be utilized for the Nursing Faculty Loan Redemption Program. However, the FY2026 Appropriations Act moved the funding for the Primary Care Practitioner Loan Redemption Program to the Reproductive Health Access Fund in the Department of Health and did not maintain the provision prohibiting the transfer of funds to the Nursing Faculty Loan Redemption Program.