Medical residency loan program approved

A bill that creates a loan repayment program for medical residents passed May 21.

LB196, introduced by Lincoln Sen. Kathy Campbell, amends the Rural Health Systems and Professional Incentive Act by creating a resident loan repayment program.

Under the bill, a qualified applicant must be enrolled or accepted in an approved medical specialty residency program in Nebraska and agree to one year of full-time practice in a designated health profession shortage area. The medical resident also is required to accept Medicaid patients in his or her practice.

Loan repayment is limited to $40,000 per each year of residency, not to exceed $120,000 per recipient. A resident who does not adhere to the terms of the act will be required to repay the state 150 percent of the outstanding loan principal at an 8 percent annual interest rate from the date of default.

The bill also increases the financial assistance limits of two existing programs under the act.

Limits on student loans increase from $20,000 to $30,000 per year, not to exceed $120,000 for medical, dental or doctoral-level mental health students. Limits on loan repayment for physicians, dentists and psychologists increase from $20,000 to $30,000 per year of full-time practice in a designated health profession shortage area, not to exceed $90,000 per recipient.

Loan repayment limits also increase from $10,000 to $15,000 per year, not to exceed $45,000 per recipient, for physician assistants, nurse practitioners, pharmacists, physical therapists, occupational therapists and mental health practitioners.

Any repayment obligations under the act will be cancelled in the event of a recipient’s total and permanent disability or death.

LB196 passed on a 48-0 vote.