Tenet Offers Student Loan Consolidation and Repayment Programs to Nurses and Other Employees

Business Wire, April 14, 2003

Business Editors

SANTA BARBARA, Calif.--(BUSINESS WIRE)--April 14, 2003

As part of its ongoing commitment to become the employer of choice in health care, Tenet Healthcare Corporation (NYSE:THC) announced today that it has begun offering student loan consolidation and repayment programs to nurses and other company employees. These new benefit programs are designed to help Tenet's hospital subsidiaries recruit and retain key staff in positions most impacted by the critical labor shortage affecting U.S. health care.

Under the loan consolidation program, which is administered for Tenet by School Loans Corporation, a full-service provider of student loan products, Tenet employees who have outstanding federal student loans totaling at least $7,500 can consolidate them into a single loan, locked in at current interest rates. Federal student loans have variable interest rates that change annually. By consolidating those loans under the Tenet program, employees receive a fixed interest rate for their entire loan term, as well as lower monthly payments, flexible repayment terms, no early repayment penalties and additional special incentives for Tenet employees.

The student loan repayment program is another new benefit that Tenet hospital subsidiaries can offer to selected employees, particularly those in some of the most difficult-to-fill positions in health care, such as nursing, pharmacy, radiology and imaging, and respiratory therapy. Under the program, the hospital selects the positions for which it wishes to make this benefit available, then sets a cap on the monthly amount it will provide for student loan repayment. The hospitals participating in the program offer student loan repayment in lieu of sign-on bonuses, which must be repaid if the employee quits before a prescribed period of time. The loan repayment program is designed not just to recruit employees to the hospitals, but also to encourage them to stay. The loan repayments are paid on a monthly basis for as long as the employee is employed by the facility, until the loan is paid off or until the hospital cap is met.

"We went to nursing schools across the country and asked nursing students how we could best help them achieve their career goals; overwhelmingly, their response was that they needed help paying off their outstanding student loans," said Trevor Fetter, Tenet's president. "We're pleased to be able to support our nurses in this way. We're committed to taking a leadership role in offering solutions to help resolve the severe labor shortage that's impacting not just our hospitals, but the entire industry."

Tenet hospital subsidiaries in several communities across the country - including Birmingham, Ala., Omaha, Neb., New Orleans, Northern California and South Florida - have already begun offering these new benefits to their employees. Participants include new recruits straight out of nursing school, as well as experienced nurses who have gone back to college to earn master's degrees and licensed vocational nurses completing advanced courses to become RNs. In many cases, employees first consolidate their student loans under the Tenet loan consolidation plan, then apply for the loan repayment program.

"We've had a fantastic reaction to these new Tenet benefit programs," said Paul Stewart, human resources director at Creighton University Medical Center, a 388-bed hospital in Omaha, Neb. "We offered student loan repayment at first only to nurses, radiology technicians, pharmacists and medical transcriptionists, but the reaction was so positive that we expanded it to several other hard-to-fill areas, like respiratory therapy, occupational therapy and physical therapy. There's very stiff competition in this area for nurses and other key staff. Everyone's offering sign-on bonuses, but applicants now are looking for something more substantial. The beauty of the Tenet loan repayment program is that, unlike a sign-on bonus which is gone once it's spent, you can see the difference every month in your paycheck."

The Tenet student loan repayment program was one reason why Jenna Williamsen applied for a full-time job as a surgery department nurse at Creighton University Medical Center. "It was very much a deciding factor for me when I was looking to be hired," said Williamsen, who still owes $18,000 in student loans five years after earning her undergraduate nursing degree. Under the Tenet student loan repayment program, she receives an additional $183 a month in her paycheck. "That extra money every month to pay off my student loan is very important to me. It's a much better deal than a recruitment bonus. For retention purposes, I think it's one of the best things a hospital can offer."

In an attempt to help other U.S. businesses maximize the benefits of such programs for their employees, Tenet also has taken a leadership position in lobbying efforts for new legislation that would provide employer tax credits for companies that offer student loan repayment programs.

In the knowledge-based U.S. economy, student loan debt has become the primary means used to finance higher education, according to Paul Combe, president of American Student Assistance, the oldest and one of the largest Federal Family Education Loan Program guaranty agencies in the United States. "For American corporations, this means that a well-educated, well-trained new employee may start work with, on average, $17,000 in education debt," he said. "The averages for health care are much higher.