HB 2269 — An Act amending the act of March 10, 1949 (P.L.30, No.14), known as the Public School Code of 1949, repealing provisions relating to medical education loan assistance.

PRINTER'S NO.   2968

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 2269
                                                 Session of
                                                   2026

     INTRODUCED BY O'MARA, HILL-EVANS, KHAN, SANCHEZ, NEILSON,
        SCHWEYER, GUENST, MADDEN, BURGOS AND CEPEDA-FREYTIZ,
        MARCH 6, 2026

     REFERRED TO COMMITTEE ON EDUCATION, MARCH 9, 2026


                                       AN ACT
 1   Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
 2      act relating to the public school system, including certain
 3      provisions applicable as well to private and parochial
 4      schools; amending, revising, consolidating and changing the
 5      laws relating thereto," repealing provisions relating to
 6      medical education loan assistance.
 7      The General Assembly of the Commonwealth of Pennsylvania
 8   hereby enacts as follows:
 9      Section 1.     Article XXII-A of the act of March 10, 1949
10   (P.L.30, No.14), known as the Public School Code of 1949, is
11   repealed:
12                                [ARTICLE XXII-A.
13                     MEDICAL EDUCATION LOAN ASSISTANCE.
14                          (a)    General Provisions.
15   Section 2201-A.    Scope.
16      This article deals with medical education loan assistance.
17   Section 2202-A.    Purpose.
18      The purpose of this article is to provide an incentive to
19   Pennsylvania students to pursue higher education and training in
 1   medicine, professional nursing, biomedicine and the life
 2   sciences in order to maintain the delivery of quality health
 3   care services in this Commonwealth.
 4   Section 2203-A.     Definitions.
 5      The following words and phrases when used in this article
 6   shall have the meanings given to them in this section unless the
 7   context clearly indicates otherwise:
 8      "Accredited medical college."           An institution of higher
 9   education located in this Commonwealth that is accredited by the
10   Liaison Committee on Medical Education to provide courses in
11   medicine and empowered to grant professional and academic
12   degrees in medicine as defined in the act of December 20, 1985
13   (P.L.457, No.112), known as the Medical Practice Act of 1985.
14      "Agency."     The Pennsylvania Higher Education Assistance
15   Agency.
16      "Approved institution of higher learning."           An institution of
17   higher learning located in this Commonwealth and approved by the
18   agency.
19      "Approved nursing program."        An institution located in this
20   Commonwealth and accredited to grant professional and academic
21   degrees or diplomas in nursing as defined in the act of May 22,
22   1951 (P.L.317, No.69), known as The Professional Nursing Law.
23      "Degree in medicine."     A degree from an accredited medical
24   college that qualifies the degree recipient to be licensed as a
25   physician.
26      "Designated area."     Any of the following:
27             (1)   A geographic area of this Commonwealth that is
28      designated by the Secretary of Health as having a shortage of
29      physicians.
30             (2)   A geographic area of this Commonwealth designated by

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 1      the United States Department of Health and Human Services as
 2      a medically underserved area or designated to have a
 3      medically underserved population.
 4      "Eligible applicant."     An individual who holds an
 5   undergraduate degree from an institution of higher learning and
 6   is enrolled in:
 7            (1)   an accredited medical college; or
 8            (2)   an approved institution of higher learning for
 9      purposes of obtaining a graduate degree in biomedicine or
10      life sciences.
11      "Guarantor."     An insurance company or not-for-profit
12   guarantor whose primary purpose is to provide default coverage
13   and loss prevention services to an offeror of unsecured student
14   loans.
15      "Licensed health care facility."     A health care facility that
16   is enrolled in the Commonwealth's medical assistance program and
17   is licensed under Article X of the act of June 13, 1967 (P.L.31,
18   No.21), known as the Public Welfare Code, or the act of July 19,
19   1979 (P.L.130, No.48), known as the Health Care Facilities Act.
20      "Nursing school applicant."     An individual who is a resident
21   of this Commonwealth and is enrolled in an approved nursing
22   program.
23      "Offeror."     An institution that makes unsecured loans to
24   eligible students in cooperation with the agency.
25      "Physician."     An individual licensed to practice medicine and
26   surgery within the scope of the act of October 5, 1978
27   (P.L.1109, No.261), known as the Osteopathic Medical Practice
28   Act, or the act of December 20, 1985 (P.L.457, No.112), known as
29   the Medical Practice Act of 1985.
30      "Registered nurse."     An individual licensed to practice

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 1   professional nursing under the act of May 22, 1951 (P.L.317,
 2   No.69), known as The Professional Nursing Law.
 3      "Work requirement for nurses."         Postgraduate, full-time
 4   employment in direct patient care with a licensed health care
 5   facility located in this Commonwealth in an occupation related
 6   to an approved course of study. The term does not include a paid
 7   student internship, a paid fellowship, volunteer service or
 8   employment before graduation.
 9                               (b)    Program.
10   Section 2211-A.     Pennsylvania Medical Education Loan Assistance
11                  Program.
12      The agency shall establish and administer the Pennsylvania
13   Medical Education Loan Assistance Program as set forth in
14   sections 2212-A and 2213-A to provide financial assistance to
15   individuals who acquire the required degree or diploma in
16   medicine, professional nursing, biomedicine or life sciences and
17   to recruit these individuals to practice their professions in
18   Pennsylvania.
19   Section 2212-A.     Loan guarantor program.
20      (a)   Establishment of program.--The agency shall administer a
21   loan guarantor program on a Statewide basis. The agency shall
22   utilize funds in the Medical School Loan Account to encourage
23   eligible applicants to attend an accredited medical college or
24   an approved institution of higher learning.
25      (b)   Loan Guarantor Program.--The Loan Guarantor Program
26   shall provide for the following:
27            (1)   Life of loan servicing.
28            (2)   Contracting for insurance with a guarantor, approved
29      by the agency, which offers a low-cost loan with competitive
30      interest rates and loan fees to eligible applicants.

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 1            (3)   Predetermining the eligibility of applicants who
 2      receive a loan from an offeror to attend an accredited
 3      medical school or an approved institution of higher learning
 4      that is insured by a guarantor.
 5            (4)   Evaluating the benefit package of a guarantor for
 6      adequacy, accessibility and availability of funds necessary
 7      to provide adequate loss prevention.
 8      (c)     Low-cost loans.--An eligible applicant shall apply to an
 9   offeror for a low-cost loan to attend an accredited medical
10   college or an approved institution of higher learning. A low-
11   cost loan made under this subsection shall be guaranteed by an
12   approved guarantor through a contract with the agency. Low-cost
13   loans made under this subsection shall provide reduced interest
14   rates and loan fees to eligible applicants compared to loans
15   made for the same purpose that are not guaranteed by this
16   article.
17      (d)     Loan requirements.--Loans provided under this section
18   shall cover up to 100% of the actual cost of tuition, room and
19   board at an accredited medical college or an approved
20   institution of higher learning and the actual cost of course-
21   required textbooks and supplies for the recipient.
22      (e)     Default.--If a recipient fails to repay a loan received
23   under this section, the agency shall collect the loan pursuant
24   to one of the following:
25            (1)   Section 4.3 of the act of August 7, 1963 (P.L.549,
26      No.290), referred to as the Pennsylvania Higher Education
27      Assistance Agency Act.
28            (2)   A process established by the applicable guarantors.
29            (3)   Any other collection procedure or process deemed
30      appropriate by the agency.

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 1      (f)   Medical Education Loan Loss Account.--An account is
 2   hereby established within the agency to receive funds
 3   appropriated for purposes of this section. Moneys in the account
 4   are hereby appropriated to the agency to provide the loan
 5   guarantor program. When funds in the account are expended, no
 6   additional loans shall be offered.
 7      (g)   Interest rate reduction.--The agency or an offeror may
 8   modify loans under this section to further reduce interest rates
 9   as follows:
10            (1)   The agency or the offeror may reduce the interest
11      rate of the loan by not less than 1% if the loan recipient,
12      upon completion of a graduate degree in biomedicine or life
13      sciences or upon licensure as a physician, agrees to practice
14      medicine or be employed to conduct research on a full-time
15      basis in Pennsylvania for a period of three consecutive
16      years.
17            (2)   The agency or the offeror may reduce the interest
18      rate of the loan by not less than 2% if the loan recipient,
19      upon licensure as a physician, agrees to practice medicine
20      for not less than three consecutive years in a designated
21      area.
22      (h)   Contract.--In addition to the requirements of subsection
23   (g), in order to be eligible for an interest rate reduction, a
24   loan recipient shall enter into a contract with the agency or an
25   offeror or its assigns at the time the loan is made. The
26   contract shall include the following:
27            (1)   The loan recipient practicing in a designated area
28      shall agree to treat patients eligible for medical assistance
29      and Medicare.
30            (2)   The loan recipient shall permit the agency or the

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 1      offeror to monitor the recipient's practice or employment to
 2      determine compliance with the terms of the contract and this
 3      article.
 4            (3)   The agency shall certify compliance with the terms
 5      of the contract.
 6            (4)   Upon the loan recipient's death or total or
 7      permanent disability, the agency or the offeror shall nullify
 8      the service obligation of the recipient.
 9            (5)   If the loan recipient is convicted of or pleads
10      guilty or no contest to a felony or if the licensing board
11      has determined that the recipient has committed an act of
12      gross negligence in the performance of service obligations or
13      has suspended or revoked the license to practice, the agency
14      or the offeror shall terminate the loan recipient's
15      participation in the program and seek repayment of the amount
16      of the loan on the date of the conviction, determination,
17      suspension or revocation.
18            (6)   A loan recipient who fails to comply with a contract
19      shall pay to the agency or the offeror the amount of loan
20      received under the original contract as of the time of
21      default. Providing false information or misrepresentation on
22      an application or verification of service shall constitute
23      default.
24      (i)   Accountability.--In July 2004, the agency shall conduct
25   a performance review of the program and services provided. The
26   performance review shall include the following:
27            (1)   The goals and objectives of the program.
28            (2)   A determination of whether the goals and objectives
29      were achieved by the agency-participating guarantor and
30      offeror.

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 1            (3)   The specific methodology used to evaluate the
 2      results.
 3            (4)   Recommendations for improvement.
 4   Section 2213-A.      Loan forgiveness program.
 5      (a)   Establishment of program.--The agency shall administer a
 6   loan forgiveness program for nursing school applicants on a
 7   Statewide basis. The agency may provide loan forgiveness as
 8   provided in subsection (b) for recipients of loans who by
 9   contract with the agency agree to practice professional nursing
10   in this Commonwealth upon attainment of the required license.
11      (b)   Loan forgiveness.--Agency-administered, federally
12   insured student loans for higher education provided to a nursing
13   school applicant may be forgiven by the agency as follows:
14            (1)   The agency may forgive 50% of the loan, not to
15      exceed $50,000, if a loan recipient enters into a contract
16      with the agency that requires the recipient upon successful
17      completion of an approved nursing program and licensure as a
18      registered nurse to practice nursing in this Commonwealth for
19      a period of not less than three consecutive years.
20            (2)   Loan forgiveness awards made pursuant to paragraph
21      (1) shall be forgiven over a period of three years at an
22      annual rate of 33 1/3% of the award and shall be made from
23      funds appropriated for this purpose.
24            (3)   The contract entered into with the agency pursuant
25      to paragraph (1) shall be considered a contract with the
26      Commonwealth and shall include the following terms:
27                  (i)   An unlicensed recipient shall apply for a
28            registered nurse's license to practice in this
29            Commonwealth at the earliest practicable opportunity upon
30            successfully completing a degree in nursing.

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 1             (ii)    Within six months after licensure, a recipient
 2        shall engage in the practice of nursing in this
 3        Commonwealth according to the terms of the loan
 4        forgiveness award.
 5             (iii)    The recipient shall agree to practice in a
 6        licensed health care facility in the provision of direct
 7        patient care on a full-time basis.
 8             (iv)    The recipient shall permit the agency to
 9        determine compliance with the work requirement for nurses
10        and all other terms of the contract.
11             (v)    Upon the recipient's death or total or permanent
12        disability, the agency shall nullify the service
13        obligation of the recipient.
14             (vi)    If the recipient is convicted of or pleads
15        guilty or no contest to a felony or if the licensing
16        board has determined that the recipient has committed an
17        act of gross negligence in the performance of service
18        obligations or has suspended or revoked the license to
19        practice, the agency shall have the authority to
20        terminate the recipient's service in the program and
21        demand repayment of the amount of the loan as of the date
22        of the conviction, determination, suspension or
23        revocation.
24             (vii)    Loan recipients who fail to begin or complete
25        the obligations contracted for shall pay to the agency
26        the amount of the loan received under the terms of the
27        contract pursuant to this section. Providing false
28        information or misrepresentation on an application or
29        verification of service shall be deemed a default.
30        Determination as to the time of default shall be made by

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 1            the agency.
 2            (4)   Notwithstanding 42 Pa.C.S. § 8127 (relating to
 3      personal earnings exempt from process), the agency may seek
 4      garnishment of wages in order to collect the amount of the
 5      loan following default under paragraph (3)(vii).
 6   Section 2214-A.    Tax applicability.
 7      Loan forgiveness repayments received by a student shall not
 8   be considered taxable income for purposes of Article III of the
 9   act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
10   of 1971.
11                       (c)   Miscellaneous Provisions.
12   Section 2231-A.    Annual report.
13      (a)     Development of report.--The agency shall publish a
14   report by September 1, 2002, and every year thereafter for the
15   immediately preceding fiscal year. The report shall include
16   information regarding the operation of the programs established
17   under this article, including:
18            (1)   The number and amount of loan guarantees and loan
19      contracts executed and renewed for eligible applicants in
20      medicine, biomedicine or life sciences and the nursing loan
21      forgiveness program.
22            (2)   The number and amount of nursing loan forgiveness
23      contracts executed and renewed for nursing school applicants.
24            (3)   The number of defaulted nursing loan forgiveness
25      contracts, reported by cause.
26            (4)   The number of nurses participating in the nursing
27      loan forgiveness program, reported by type of institution
28      attended, including four-year educational institutions,
29      community colleges, independent two-year colleges, private
30      licensed schools, hospital-based courses of study and

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 1      certificate programs.
 2            (5)   The number and type of enforcement actions taken by
 3      the agency.
 4      (b)   Submission.--The annual report shall be submitted to the
 5   Governor, the chair and minority chair of the Appropriations
 6   Committee of the Senate, the chair and minority chair of the
 7   Appropriations Committee of the House of Representatives, the
 8   chair and minority chair of the Education Committee of the
 9   Senate, the chair and minority chair of the Education Committee
10   of the House of Representatives, the chair and minority chair of
11   the Public Health and Welfare Committee of the Senate and the
12   chair and minority chair of the Health and Human Services
13   Committee of the House of Representatives.
14   Section 2232-A.    Appeals.
15      The provisions of this article shall be subject to 22 Pa.
16   Code Ch. 121 (relating to student financial aid).
17   Section 2233-A.    Regulations.
18      The agency shall adopt regulations and procedures necessary
19   to carry out the purposes of this article.
20   Section 2234-A.    Funding.
21      Loan guarantor program payments and loan forgiveness
22   repayments shall be made only to the extent that funds are
23   appropriated for that purpose and are sufficient to cover
24   administration of the programs. The receipt of a loan under this
25   article shall not constitute an entitlement derived from the
26   Commonwealth or a claim on any funds of the Commonwealth.]
27      Section 2.     This act shall take effect immediately.




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