REQUESTED BY: Dear Senator:
You have asked if LB 884 of the Eighty-Fifty Legislature, Second Session (1978), `may be invalidated on constitutional grounds should loans, as provided by the act, go to students who are enrolled at institutions which are not owned and controlled by the state or its political subdivisions.' The same is hereinafter discussed.
The initial section of LB 884 states that the Legislature recognizes that postsecondary education of medical professionals is important to the welfare of the State of Nebraska. It also states that the Legislature recognizes that the State of Nebraska can help alleviate the problems of maldistribution and shortages of medical manpower through a student loan forgiveness and repayment program. Other sections of this legislative bill establish a student loan program for medical students while other sections provide financial incentive through loan forgiveness and repayment to medical students to practice their profession in a medical profession shortage area of the State of Nebraska which has been determined to be in need of such professionals.
There is, of course, a very minimum amount of time available for legal research due to the fact that this legislative session may soon adjourn. In the time available to us we have discovered very little legal precedent that can be used for guidance in answering your question. The same becomes crucial when one attempts to analyze this legislative bill on its face and on its possible application.
For example, section 15 of LB 884 states, in part, as follows:
"The financial assistance provided by the provisions of this act shall consist of student loans to eligible students for attendance at an accredited school, . . ."
The term `accredited school' is not defined in LB 884. On the other hand, section 16 of LB 884 states as follows:
"Loan applicants and recipients must be enrolled or accepted for enrollment in an accredited medical education program in the United States."
Thus it appears to us that section 15 of LB 884 can and must be read to say that the financial assistance provided by the provisions of this act consists of student loans to eligible students for attendance at an accredited medical education program in the United States. So construed, LB 884, in our opinion, is unconstitutional. We call your attention to section 3 of Article XIII of the Constitution of Nebraska which provides as follows:
"The credit of the state shall never be given or loaned in aid of any individual, association, or corporation, except that the state may guarantee or make long-term, low-interest loans to Nebraska residents seeking adult or post high school education at any public or private institution in this state. Qualifications for and the repayment of such loans shall be as prescribed by the Legislature." (Emphasis added.)
There are undoubtedly other issues, such as whether or not LB 884 is special legislation and whether or not a loan can be forgiven if the borrower upon obtaining a degree of Doctor of Medicine practices in a designated medical profession shortage area and whether or not the debt can be cancelled without repayment by other circumstances. Those issues, however, are moot at this time because the loans authorized by LB 884 are not limited to eligible students (Nebraska residents) to attend an accredited public or private medical school in the State of Nebraska.