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AB 2345

Student loans: medical, nursing, social work, and social welfare students: California Health Care Workforce Supplemental Loan Program.

2025-2026 Regular Session Introduced by Jasmeet Bains

Creates a California-backed loan program offering Grad PLUS–like aid to eligible residents to cover the remaining cost of attendance for medical, nursing, social work, or social we

In committee: Set, first hearing. Hearing canceled at the request of author.
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Bill Summary · AB 2345

Summary of AB 2345 (2025-2026) — California Health Care Workforce Supplemental Loan Program

Basic purpose

  • Establish a California Health Care Workforce Supplemental Loan Program to help California residents pursuing medical, nursing, social work, or social welfare education at accredited programs.
  • The program aims to replace or replicate the borrowing capacity that existed under federal Direct Unsubsidized Loans and Federal Direct Grad PLUS Loans as of January 20, 2025, by providing California-issued loans with similar terms.
  • Administered by the California Student Aid Commission (the commission).

Why this bill is proposed

  • Federal policy changes, effective July 1, 2026, will:
    • Eliminate federal Direct Grad PLUS loans for graduate/professional students.
    • Impose annual and lifetime borrowing caps that can severely limit financing for medical and nursing students (e.g., up to $50k per year for medical, $20.5k per year for nursing).
    • Create a funding gap for students whose cost of attendance exceeds these caps and existing aid.
  • AB 2345 seeks to prevent credentialing barriers and address anticipated health care workforce shortages by ensuring adequate financing options for eligible students.

Key provisions

Creation and scope

  • Adds Article 25 to the Education Code, establishing the California Health Care Workforce Supplemental Loan Program.
  • Purpose: Provide eligible students with access to the same level of financial assistance toward cost of attendance as was available through federal Direct Unsubsidized and Grad PLUS loans as of January 20, 2025.

Eligible participants and definitions

  • Eligible student: California resident enrolled at least half-time in an accredited medical or nursing school, or in an accredited social work or social welfare program in California; has applied for the maximum annual federal Direct Unsubsidized loan; would have qualified for a federal Direct Grad PLUS loan under pre-2025 criteria.
  • Cost of attendance: Defined per the federal Higher Education Act standard.
  • Gap amount: The portion of the cost of attendance not covered by federal unsubsidized loans and other aid.

loan terms and features

  • Loans issued under the program have terms equivalent to federal Direct Grad PLUS loans as of January 20, 2025, with the following specifics:
    • Interest rate: Fixed rate equal to the 10-year U.S. Treasury note auction price plus 4.60%, capped at 10.5%.
    • Repayment: Access to the same repayment options and protections as Direct Unsubsidized Loans, including income-driven repayment and Public Service Loan Forgiveness (PSLF) eligibility if working at a California public health facility.
    • Deferment/forbearance: Same protections as federal loans.
    • Origination fee: Not to exceed 4.228% (the historical cap for Grad PLUS as of 2025).
    • Maximum annual loan amount: Equal to the gap amount needed to cover the full cost of attendance not covered by federal unsubsidized loans and other aid.

Administration and funding

  • Creation of the Health Care Workforce Supplemental Loan Fund in the State Treasury.
  • Legislature to annually appropriate funds to cover lending capital and administrative costs.

Data and administration

  • The commission may enter into data-sharing agreements with:
    • Accredited medical, nursing, social work, or social welfare schools.
    • U.S. Department of Education.
  • Purpose: To automate verification of federal loan receipt and determine the gap amount, streamlining applications.

Practical impact

  • Who is affected
    • California residents pursuing accredited medical, nursing, social work, or social welfare programs who demonstrate eligibility under the program’s criteria.
    • Students whose cost of attendance exceeds federal unsubsidized loan and aid amounts, creating a gap the program would cover.
  • Financial impact
    • Provides loans with terms closely aligned to Grad PLUS, potentially enabling students to cover full cost of attendance.
    • Creates a dedicated state funding source (Health Care Workforce Supplemental Loan Fund) to manage lending and program administration.
  • Workforce implications
    • Aims to reduce financial barriers to training in high-need health professions, supporting California’s health care workforce pipeline.

Timeline and status

  • Introduced: February 19, 2026
  • Assembly actions: Referred to Higher Education; amendments and re-referrals occurred in March–April 2026.
  • Latest action (as of the provided record): In committee; first hearing set and then canceled at author’s request on April 20, 2026. Re-referred to Higher Education on April 7, 2026.
  • No appropriation in the bill text itself; annual funding instructed by statute via legislative appropriation.

Notes

  • The bill text includes standard cross-references to federal law sections (e.g., 20 U.S.C. 1087ll for cost of attendance, 34 C.F.R. 685.219 for PSLF) to align program features with federal loan concepts.
  • The bill emphasizes maintaining the same borrowing capacity that existed under federal programs as of a specific date (January 20, 2025) to ensure continuity for borrowers who would have benefited under prior rules.

Compiled from official sources — confirm details with the bill’s official record.

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