NOTICE IS HEREBY GIVEN that pursuant to s. 227.11 Stats., the State of Wisconsin Higher Educational Aids Board will hold an public hearing at the time and place shown below to consider an proposed order to create Chapter HEA 15 relating to the Nursing Student Loan Program.

Hearing Information
The hearing will be held at the State Capitol, Room 201 SE, Madison, Wisconsin, on Friday, October 13, 2006 at 9:00 a.m.

Statutes interpreted
s. 39.393, stats.

Statutory authority
s. 39.393, stats.

Explanation of the HEAB's authority to promulgate the proposed rule under these statutes:
The HEAB has the authority granted under s.227.11 (2) (d) to create rules for the specific loan programs that it oversees.

Written Comments
Written comments on the proposed rules may be sent to the contact person by Thursday, October 12, 2006. Written comments will receive the same consideration as written or oral testimony presented at the hearing.

Copies of the Rules: Proposed rules and the summary of proposed rules are posted on the HEAB website at www.HEAB.wi.gov.

The State of Wisconsin Higher Educational Aids Board proposes the following order to create Chapter HEA 15 relating to the Administrative Procedures for the Nursing Student Loan Program.

Statute interpreted: Section 39.393 Stat.

Statutory authority: Section 39.393 Stat.

Explanation of statutory authority: The proposed rules define the various aspects of the Nursing Student Loan Program authorized by s. 39.393, Stats., as created by 2001 Wis. Act 16 as to the awarding of the loans; their forgiveness; or their repayment.

Related statutes or rules:
None

Plain language analysis: The 2001 Wisconsin Act 16 created s. 39.393 which provides loans to Wisconsin residents who are enrolled at least half-time at an eligible in-state institution that prepares them to be licensed as either a RN or LPN, or earns either a master's or doctoral degree in nursing. The Wisconsin Higher Educational Aids Board (HEAB) administers this program under s. 39.393. The proposed rules are the administrative rules for Chapter HEA 15 that define the various aspects of the Nursing Student Loan Program including the application process, borrower eligibility, loan terms, forgiveness and repayment.

Summary of, and comparison with, existing or proposed federal regulation:
These rules are not intended to address any proposed or existing federal regulations.

Comparison with rules in adjacent states:
The Michigan Nursing Scholarship is a non-need based award available to Michigan residents enrolled at least half time at an eligible institution in a program leading to a Licensed Practical Nurse (LPN) certification, Associate Degree in Nursing (ADN), or Bachelor of Science in Nursing (BSN). Students will be selected for scholarship awards by their college or university financial aid office. Scholarship awards are for $4,000 per academic year for full time students, but cannot exceed cost of attendance minus other grants and scholarships. Students receiving a full time scholarship award have to agree to work as a direct care nurse in Michigan one year for each year of assistance. Not fulfilling the work commitment will result in the scholarship becoming a loan that must be repaid.

Summary of factual data and analytical methodologies:
N/A

Analysis and supporting documents used to determine effect on small business:
The proposed rules have no affect upon small business in Wisconsin.

Effect on small business: The proposed rules have no affect upon small business in Wisconsin.

Agency contact person:
Connie Hutchison, Executive Secretary
Higher Educational Aids Board
131 W. Wilson, P.O. Box 7885
Madison, WI 53707-7885

Place where comments are to be submitted and deadline for submission:

SECTION 1. Chapter HEA 15 is created to read:

HEA 15.01 Purpose. To define the various aspects of the Nursing Student Loan Program authorized by s. 39.393, Stats., as to the awarding of the loans; their forgiveness; or their repayment.

HEA 15.02 Definitions. In this chapter:

1. "Board" means the Higher Educational Aids Board

2. "Eligible institution" means a public or non-profit, private institution of higher education in Wisconsin, which is accredited by a national or state accrediting agency, and which provides any of the following:
   1. A program that confers an associate degree in nursing;

   2. A program that confers a bachelor's degree in nursing;

   3. A program that confers a 2nd degree that will make the borrower eligible to sit for examination under s. 441.04 or 441.10, Stats.;

   4. A program that confers a diploma in nursing;

   5. A program that confers a master's degree in nursing;

   6. A program that confers a doctoral degree in nursing.

3. "Forbearance" means an extension of time for making loan payments or the acceptance of smaller payments than were previously scheduled.

4. "Grace period" means a six-month period following withdrawal or graduation from an eligible institution during which the borrower is not responsible for interest or payment.

5. "Loan" means a loan made under the Nursing Student Loan Program.

HEA 15.03 Borrower Eligibility.

1. The borrower shall be a resident of the United States, either a citizen or an alien lawfully admitted for permanent residence by the federal Immigration and Naturalization Service.

2. The borrower shall be a Wisconsin resident as determined by the board using the residency standards of s. 36.27 (2), Stats.

3. The borrower shall be enrolled at least half-time in an eligible institution.

4. To the extent possible, preference shall be given to students who show financial need using the Free Application for Federal Student Aid (FAFSA) as determined by the eligible institution.

5. To the extent possible, preference shall be given to persons who are enrolled in either the second year of a 2-year associate degree nursing program; the third year of a 3-year nursing diploma course; or in the junior or senior year of a bachelor degree program.

HEA 15.04 Terms of Loans.

1. Eligible borrowers shall receive a minimum annual award of $500. The maximum annual award shall not exceed $3,000. The total the borrower receives under this program shall not exceed $15,000 in outstanding principal.

2. For the portion of the loans that are not forgiven but must be repaid, the interest rate shall not exceed 5% annually on the unpaid principal balance with accrual beginning upon the initial date of repayment. Interest shall not accrue during periods of at least half-time enrollment in an eligible institution; the grace period; employment that qualifies for forgiveness under s. HEA 15.06; or during board authorized periods of deferment from repayment. The interest rate shall be 5%.

3. The initial date of repayment under s. HEA 15.07 shall be determined by the board in each instance beginning no sooner than six months after the borrower withdraws or graduates from the eligible institution. There shall be a six-month grace period that will start the day after the person withdraws or graduates from the eligible institution. The borrower shall not be required to make payment during the grace period.

HEA 15.05 Application Process.

1. A borrower seeking a loan shall contact the eligible institution's financial aid office.

2. To the extent possible, preference shall be given to continuing students who received the loan during the previous academic year and who have met the institution's Satisfactory Academic Progress requirements.

3. The eligible institution's financial aid office shall notify the board of the loan amount for the borrower. The board shall determine if the borrower shall receive a loan under this program. Funds will be disbursed only after the borrower's signed agreement form has been received by the board.

4. All borrower contact concerning forgiveness and repayment shall be with the board. After leaving school the borrower shall maintain written annual contact with the board until the loan is either forgiven or repaid. The borrower is required to forward all name, address and telephone number changes to the board.

HEA 15.06 Loan Forgiveness.

1. Borrowers must be licensed as a nurse to be eligible for forgiveness.

2. Borrowers receiving loans for a master's or doctoral degree in nursing must complete the stated degree in order to be eligible for forgiveness.

3. Borrowers in forgiveness status must be employed at least half-time as a nurse or full-time as a nurse educator in Wisconsin. For the first year of full-time employment, 25% of the principal and accrued interest, if any, shall be forgiven, with the amount to be prorated in cases where less time has been worked. For the second year of full-time employment, 25% of the principal and accrued interest, if any, shall be forgiven, with the amount pro-rated in cases where less time has been worked. The borrower shall be given a maximum of 4 years to work the required 2 years for partial forgiveness.

4. In no instance shall the term of forgiveness exceed 6 years including periods of deferments authorized by the board. The board may allow additional periods of deferment in exceptional situations.

5. Loan principal remaining unforgiven either because the forgiveness period as defined in subs. (1) and (2) is over; or because the borrower has not been employed for forgiveness as defined in sub. (1); or has moved out of state, shall be repaid to the state of Wisconsin with interest accrued from the date on which the forgiveness period ended.

HEA 15.07 Terms of Repayment.

1. Borrowers shall repay a loan if not employed in Wisconsin at least half-time as a nurse or full-time as a nurse educator. Repayment shall be required of borrowers who are employed for periods of time but who do not complete their forgiveness within the time allowed.

2. Once the borrower has reached the expiration of the forgiveness period, or drops below half-time as a nurse or full-time as a nurse educator, or the borrower has reached 50% forgiveness, the repayment period shall begin immediately.

3. The monthly payment shall be a minimum of $100 including principal and accrued interest. Accrued interest shall be paid first each month from the payment received. The board shall determine the monthly repayment schedule, although a borrower may request a schedule with a higher monthly payment.

4. A borrower shall repay the loan within a maximum of six (6) years not counting periods of deferment granted by the board. Interest shall not accrue during periods of deferment granted by the board under s. HEA 15.08.

5. Borrowers may prepay any or all of their loan account without penalty whether the borrower is in school, forgiveness, repayment or deferment.

6. If the borrower dies or becomes totally and permanently disabled, all obligation to make any further payment of principal and interest on the loan shall be canceled.

HEA 15.08 Deferment of loan repayment for borrowers.

1. Borrowers who return to school on a full-time basis in any course of study at an eligible institution shall be deferred by the board from repayment for the period of enrollment.

2. Borrowers who are on active duty in the military shall be deferred by the board from repayment for the period of their active duty.

3. Borrowers who enter the Peace Corps or Volunteers in Service to America shall be deferred by the board from repayment for the term of their active service, not to exceed 3 years. Employment with similar private/public agencies is eligible for deferment, as determined by the board.

4. Borrowers who are unemployed shall be deferred from repayment by the board for up to 6 months at a time, up to a maximum of 24 months, as long as they provide proof, satisfactory to the board, of actively seeking employment.

5. Borrowers who become pregnant, give birth or legally adopt a child, or have a disabling medical condition shall be deferred from repayment by the board for up to 12 months.

6. In order to receive a deferment, a borrower shall apply to the board. If the borrower submits written evidence, which verifies eligibility for the deferment, the board shall approve the deferment.

HEA 15.09 Forbearance of Loan Repayment for Borrowers. The board may grant forbearance from repayment for the benefit of the borrower whenever unemployment, health, other personal problems, or educational study that is ineligible for deferment temporarily affects the borrower's ability to make scheduled payments on the loan. The borrower must submit written evidence which verifies eligibility for the forbearance. Periods of forbearance may not exceed 6 months for each approved request, up to a maximum total of 24 months.

HEA 15.10 Applicability. This chapter shall apply to all loans made on or after August 1, 2002.