LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
ASSEMBLY, No. 2801
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: OCTOBER 1, 2024
SUMMARY
Synopsis: Renames, extends eligibility, and makes various other changes to
Primary Care Practitioner Loan Redemption Program.
Type of Impact: Annual State expenditure increase.
Agencies Affected: Higher Education Student Assistance Authority; Department of
Health.
Office of Legislative Services Estimate
Year 4 and
Fiscal Impact Year 1 Year 2 Year 3 Thereafter
State Cost Increase $144,000 $352,000 $576,000 $800,000
 The Office of Legislative Services (OLS) determines that this bill will result in a State cost
increase of up to $1.9 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 FY 2024 and FY 2025
appropriations acts included budget language and funding to increase the maximum loan
redemption amounts in accordance with the provisions of this bill.
 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 $144,000 in the first
year, $352,000 in the second year, $576,000 in the third year, and $800,000 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 $2.0 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
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
 FE to A2801 [1R]
2
on the amounts appropriated in the annual appropriations acts. The FY 2025 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.
BILL DESCRIPTION
This bill makes various changes to the Primary Care Practitioner Loan Redemption Program,
including renaming the program as the Health Care Professional Loan Redemption Program,
expanding eligibility for the program, and increasing the maximum eligible loan amount.
The bill expands eligibility for participation in the Health Care Professional Loan Redemption
Program to include individuals employed as psychiatrists and certain other health care
professionals, in addition to primary care practitioners. The Department of Health, in consultation
with the Department of Labor and Workforce Development and the Division of Consumer Affairs
in the Department of Law and Public Safety, may designate additional health care fields
experiencing critical Statewide labor shortages for inclusion in the program.
The bill increases the maximum amount of eligible qualifying loan expenses from $120,000 to
$200,000, or the maximum amount authorized by the federal government, whichever is greater,
for participants employed at an approved site. The qualifying loan expenses may be State funds
or the sum of federal, State, and other non-federal matching funds. Similar to current law, a
participant would be able to receive a maximum redemption of 18 percent of principal and interest
in return for one full year of service at an approved site, an additional 26 percent for a second full
year, an additional 28 percent for a third full year, and the remaining 28 percent for a fourth full
year.
The bill provides new standards for the prioritization of applicants in the event that there are
insufficient funds or approved sites to select all of the applicants who meet the eligibility criteria.
The bill also provides that, if the amount of funds dedicated to the Nursing Faculty Loan
Redemption Program exceeds the amount needed to satisfy qualifying applications, the excess
funds may be reallocated to the Health Care Professional Loan Redemption Program.
The bill requires that the Higher Education Student Assistance Authority 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. The report is required to include information
about the program participants, the loan redemption amounts, and the outcomes of the program.
Finally, the bill repeals a section of law requiring 25 percent of the funds appropriated for the
Primary Care Practitioner Loan Redemption Program to be utilized for the Nursing Faculty Loan
Redemption Program.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
 FE to A2801 [1R]
3
OFFICE OF LEGISLATIVE SERVICES
The OLS determines that this bill will result in an increase in State costs of up to $1.9 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 bill increases the maximum eligible loan amount for a participant from $120,000 to
$200,000, resulting in a maximum $80,000 increase per participant in State expenditures.
However, this amount is spread out over the course of four years in successively greater amounts.
The table below illustrates the maximum redemption amounts for each full year of service under
the program, using both the maximum eligible loan amount under current law and the maximum
amount under the bill:
Percentage of Maximum
Total Loan Amount Under Maximum Maximum
Years of Amount Eligible Current Law Amount Under Annual Increase
Service for Redemption ($120,000) A2801 ($200,000) Per Participant
1 18% $21,600 $36,000 $14,400
2 26% $31,200 $52,000 $20,800
3 28% $33,600 $56,000 $22,400
4 28% $33,600 $56,000 $22,400
Currently, the Primary Care Practitioner Loan Redemption Program averages 38 total
participants each year, or approximately four cohorts of nine to 10 participants. Not accounting
for the expanded eligibility under the bill, and assuming that every participant has the maximum
eligible loan amount redeemed, the increased maximum amount of additional eligible loan
redemption would total $1.7 million to $1.9 million over the course of the first four years. The
OLS notes, however, that there may be certain exceptions to this maximum amount, as current law
provides that participants may have loans redeemed for up to the maximum amount, or the
maximum amount authorized by the federal government, whichever is greater. The OLS also notes
that the FY 2024 and FY 2025 appropriations acts included budget language increasing the
maximum loan redemption amount to $200,000, in accordance with the provisions of this bill.
The bill also expands eligibility for participation in the program to include psychiatrists and
other health care professionals designated by the Department of Health, in addition to primary care
practitioners. While the OLS is unable to estimate how many additional participants this expansion
may yield, the OLS notes that if the number of psychiatrists participating in the program is
proportional to the number of primary care practitioners participating in the program, the number
of participants each year could be expected to increase by one or two participants. The number of
participants could further increase as a result of the department designating other health care
professionals as eligible due to a critical healthcare shortage.
Additionally, the bill may result in indeterminate, but likely marginal, increases in expenditures
for the Higher Education Student Assistance Authority and the Department of Health, associated
with the administrative provisions of the bill, to the extent that existing staff and resources are
insufficient to effectuate the provisions of the bill. The Department of Health is required to
compile a list of approved sites for participants in the program, and may designate additional
healthcare professions for eligibility to participate in the program. The approved sites are based
on health professional shortage and medically underserved designations, while the potential
eligibility of additional healthcare professions is based on areas of critical shortage in the State.
To the extent that this information is not readily available, there may be an additional cost to the
 FE to A2801 [1R]
4
Department of Health to collect the information and compile the lists. The bill also requires the
Higher Education Student Assistance Authority to annually submit a report to the Governor and
the Legislature providing information about participation in the program and loan redemption
amounts. To the extent that the authority does not already collect this information, there may be a
marginal cost associated with the collection of the information and the compilation of the report.
Finally, the bill repeals a provision of law that dedicates 25 percent of the funds appropriated
for the Primary Care Practitioner Loan Redemption Program to the Nursing Faculty Loan
Redemption Program. This could result in a change in funding for either program, contingent on
the amount of funds appropriated by the Legislature in each year. The OLS notes that the FY 2025
Appropriations Act includes separate funding for each program and includes language prohibiting
the use of funds appropriated for the Primary Care Practitioner Loan Redemption Program for the
Nursing Faculty Loan Redemption Program.
Section: Education
Analyst: Abigail Chambers
Associate Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).


Statutes affected:
Introduced: 18A:71C-36.1, 18A:71C-46.1, 18A:71C-58, 18A:71C-65, 18A:71C-48