FISCAL NOTE
FUND(S):
0589
Sources of Revenue:
General Fund
Legislation creates:
A New Program
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to create a tuition waiver program allowing two out-of-state medical students from each medical school who commit to practice in an underserved area of West Virginia for a specified period of time to pay in-state tuition. The bill sets forth the conditions for approval in the program. The bill provides for repayment of the tuition waiver if the student does not practice in the underserved area. The bill also grants rule making authority. The first year annual cost is expected to be $167,000 and increase to $192,000 upon full implementation.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2012
Increase/Decrease
(use"-") |
2013
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
167,000 |
192,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
167,000 |
192,000 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The non-resident fee differential for medical students is currently $26,790, $26,610, and $30,000 per year at Marshall University (MU), West Virginia University Health Sciences (WVUHS) and the West Virginia School of Osteopathic Medicine (WVSOM), respectively. The estimated annual cost in terms of lost tuition and fees will start at $167,000. The cost will change as students who do not meet the legislation’s requirements make repayments and tuition rates increase. Upon full implementation, it is anticipated that approximately 50 percent of the students at MU and WVUHS will not meet the legislation’s requirements and be required to make repayments. About 20 percent of the WVSOM students are expected to make repayments.It is anticipated that tuition and fees for out-of-state students would increase about 5% per year.
Participating students would not need to make repayments unless they entered a nonqualified practice site upon completion of their residency program. Inflationary costs would continue to rise after full implementation.
From a budgetary standpoint if the program operates as a true “waiver” and the tuition loss is not replaced, the loss of $167,000 to $203,000 per year would be detrimental to the schools’ operating budgets. The out-of state tuition and fee revenues fund expanding operational and capital needs.
If this program is approved it will also be critical to set the interest rates and penalties for non-compliance at a high enough level to discourage the non-residents from simply using this as another loan financing program with little real intent to fulfill the service commitment. Similar programs use repayment rates of 15 percent. It is expected that uncollectible loan expenses would be offset by interest charges.
Memorandum
Person submitting Fiscal Note: Ed Magee
Email Address: emagee@hepc.wvnet.edu