(A) The chancellor of higher education shall establish the nurse education assistance program, the purpose of which shall be to make loans to students enrolled in prelicensure nurse education programs at institutions approved by the board of nursing under section 4723.06 of the Revised Code and postlicensure nurse education programs approved by the chancellor under section 3333.04 of the Revised Code or offered by an institution holding a certificate of authorization issued under Chapter 1713 of the Revised Code. The board of nursing shall assist the chancellor in administering the program.

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(B) There is hereby created in the state treasury the nurse education assistance fund, which shall consist of all money transferred to it pursuant to section 4743.05 of the Revised Code. The fund shall be used by the chancellor for loans made under division (A) of this section and for expenses of administering the loan program.

(C) Between July 1, 2005, and January 1, 2012, the chancellor shall distribute money in the nurse education assistance fund in the following manner:

(1)(a) Fifty per cent of available funds shall be awarded as loans to registered nurses enrolled in postlicensure nurse education programs described in division (A) of this section. To be eligible for a loan, the applicant shall provide the chancellor with a letter of intent to practice as a faculty member at a prelicensure or postlicensure program for nursing in this state upon completion of the applicant’s academic program.

(b) If the borrower of a loan under division (C)(1)(a) of this section secures employment as a faculty member of an approved nursing education program in this state within six months following graduation from an approved nurse education program, the chancellor may forgive the principal and interest of the student’s loans received under division (C)(1)(a) of this section at a rate of twenty-five per cent per year, for a maximum of four years, for each year in which the borrower is so employed. A deferment of the service obligation, and other conditions regarding the forgiveness of loans may be granted as provided by the rules adopted under division (D)(7) of this section.

(c) Loans awarded under division (C)(1)(a) of this section shall be awarded on the basis of the student’s expected family contribution, with preference given to those applicants with the lowest expected family contribution. However, the chancellor may consider other factors the chancellor determines relevant in ranking the applications.

(d) Each loan awarded to a student under division (C)(1)(a) of this section shall be not less than five thousand dollars per year.

(2) Twenty-five per cent of available funds shall be awarded to students enrolled in prelicensure nurse education programs for registered nurses, as defined in section 4723.01 of the Revised Code.

(3) Twenty-five per cent of available funds shall be awarded to students enrolled in nurse education programs as determined by the chancellor, with preference given to programs aimed at increasing enrollment in an area of need.

After January 1, 2012, the chancellor shall determine the manner in which to distribute loans under this section.

(D) Subject to the requirements specified in division (C) of this section, the chancellor shall adopt rules in accordance with Chapter 119 of the Revised Code establishing:

(1) Eligibility criteria for receipt of a loan;

(2) Loan application procedures;

(3) The amounts in which loans may be made and the total amount that may be loaned to an individual;

(4) The total amount of loans that can be made each year;

(5) The percentage of the money in the fund that must remain in the fund at all times as a fund balance;

(6) Interest and principal repayment schedules;

(7) Conditions under which a portion of principal and interest obligations incurred by an individual under the program will be forgiven;

(8) Conditions under which all or a portion of the principal and interest obligations incurred by an individual who is deployed on active duty outside of the state or who is the spouse of a person deployed on active duty outside of the state may be deferred or forgiven.

(9) Ways that the program may be used to encourage individuals who are members of minority groups to enter the nursing profession;

(10) Any other matters incidental to the operation of the program.

(E) The obligation to repay a portion of the principal and interest on a loan made under this section shall be forgiven if the recipient of the loan meets the criteria for forgiveness established by division (C)(1)(b) of this section, in the case of loans awarded under division (C)(1)(a) of this section, or by the chancellor under the rule adopted under division (D)(7) of this section, in the case of other loans awarded under this section.

(F) The obligation to repay all or a portion of the principal and interest on a loan made under this section may be deferred or forgiven if the recipient of the loan meets the criteria for deferment or forgiveness established by the chancellor under the rule adopted under division (D)(8) of this section.

(G) The receipt of a loan under this section shall not affect a student’s eligibility for assistance, or the amount of that assistance, granted under section 3333.122, 3333.22, 3333.26, 5910.03, 5910.032, or 5919.34 of the Revised Code, but the rules of the chancellor may provide for taking assistance received under those sections into consideration when determining a student’s eligibility for a loan under this section.

(H) As used in this section, “active duty” means active duty pursuant to an executive order of the president of the United States, an act of the congress of the United States, or section 5919.29 or 5923.21 of the Revised Code.