LEGISLATIVE FISCAL ESTIMATE [Second Reprint] ASSEMBLY, No. 3681 STATE OF NEW JERSEY 220th LEGISLATURE DATED: MARCH 2, 2023 SUMMARY Synopsis: Establishes New Jersey Educator Scholarship Program; appropriates $3 million. Type of Impact: Annual State expenditure increase to the General Fund. Agencies Affected: Higher Education Student Assistance Authority, Department of Education. Office of Legislative Services Estimate Fiscal Impact Year 1 Subsequent Years State Cost Increase Up to $3 million Up to $4 million The Office of Legislative Services (OLS) concludes that the establishment of the New Jersey Educator Scholarship program would result in an increase in State expenditures of up to $3 million in the first year the bill is in effect and up to $4 million in each subsequent year to provide 200 scholarships annually. BILL DESCRIPTION This bill establishes the New Jersey Educator Scholarship Program in the Higher Education Student Assistance Authority. Scholarships would be awarded annually to 50 students enrolled in each of the first, second, third, and fourth years of an educator preparation program at a public institution of higher education in the State. Each student would receive a scholarship up to the amount of remaining tuition that is not covered by State, federal, or any other need-based grant or merit scholarship, for up to 18 credits per semester, and a stipend in the amount of $5,000 annually. The bill provides that the scholarship amount may not exceed the average in-State tuition amount charged by the four-year public institutions of higher education in the academic year in which the scholarship is awarded. A student would be eligible to receive the scholarship for a maximum of four years of study or until the student receives a bachelor’s degree and completes an educator preparation program, whichever occurs first. As a condition of participation in the program, the student would 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 A3681 [2R] 2 be required to seek and accept full-time employment as a teaching staff member with a public school district, charter school, or renaissance school in the State within the first five full years following graduation. The student would be required to serve in employment with a public school district in the State for no less than three full school years, during which time the student would receive mentoring coordinated by the hiring district or school to aid the student in furthering a career in education. A student’s scholarship would remain in effect provided that the student achieves satisfactory academic progress and continues to meet eligibility requirements. Under certain circumstances, a student whose scholarship has been terminated may be required to repay all or part of the amount of any scholarship or stipend received as a debt to the State. The bill makes an appropriation of $3 million from the General Fund to the Higher Education Student Assistance Authority and provides for a $4 million appropriation in each fiscal year beginning in FY 2024. FISCAL ANALYSIS EXECUTIVE BRANCH None received. OFFICE OF LEGISLATIVE SERVICES The OLS concludes that the establishment of the New Jersey Educator Scholarship program would result in an increase in State expenditures of up to $3 million in the first year the bill is in effect and up to $4 million in each subsequent year for the provision of 200 scholarships annually. The bill stipulates that 50 students in each of the first, second, third, and fourth years of an educator preparation program will receive scholarships and stipends toward the completion of a bachelor’s degree and an educator preparation program, and that the amount of the scholarship may not exceed the average amount of tuition at the public institutions of higher education in the State. The average cost of tuition at senior public institutions of higher education in New Jersey is $14,000, resulting in a cost of approximately $2.8 million for 200 scholarships. Additionally, the bill stipulates that each scholarship recipient would receive a $5,000 annual stipend, which would amount to a total of $1 million for all 200 students. Assuming that each of the scholarship recipients attends a senior public institution of higher education at current tuition rates, these costs combine for a total cost of $3.8 million to implement the provisions of the bill in each year. Furthermore, the bill appropriates $3 million for the first year of the program, in addition to the $1 million appropriated in the FY 2023 Appropriations Act, and provides for a $4 million appropriation in each subsequent year. Finally, the OLS notes that the State may experience minor revenue increases following the fourth year of implementation of the bill, to the extent that scholarship recipients do not fulfill the requirements of the bill and are therefore required to repay the amount of any stipend and scholarship received. Section: Education Analyst: Abigail Chambers Assistant Fiscal Analyst Approved: Thomas Koenig Legislative Budget and Finance Officer FE to A3681 [2R] 3 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.).