The administration of Virginia’s nursing scholarship programs will be moved to a new agency after a state study found that money for those programs has not been fully used each year because the state Health Department doesn’t have the capacity to effectively manage them.
About $10.6 million in unused funds was left over from previous years across four different nursing scholarship programs as of June 2, according to the department.
The management of about 60% of all of the health workforce incentive programs administered by the Health Department will be moved from the agency’s purview to the Virginia Health Workforce Development Authority in July, after the General Assembly approved the measure unanimously through legislation in March. Gov. Abigail Spanberger signed the bill in April.
Del. Mark Downey, D-York County and the patron of the House of Delegates bill, said that the programs in question had been established to get more nurses into the workforce and to support regions of the commonwealth where healthcare has seen chronic staffing shortages.
Downey, a pediatrician of about 25 years in York County, said he’s seeing a trend: Not enough healthcare providers are being trained as the costs of living and the costs of medical school increase. He said he has had difficulty himself finding and hiring healthcare professionals.
“There’s a lot of additional overhead that doctors and providers have to go through, so I think it’s a challenge to get people interested in working in primary care and I think that trickles down,” he said. “It’s just a challenge everywhere.”
In Southside Virginia, openings for healthcare jobs have nearly tripled since 2017, according to a report from Go Virginia Region 3. But the region doesn’t have enough trained workers to fill those positions. Statewide, healthcare jobs make up 13% of job vacancies. In Southside, they account for 25%.
Demand for nursing staff in Southwest Virginia is projected to increase by 18% between 2018 and 2028, according to data from George Mason University. Statewide, that demand is projected to grow 11.8%.
Between fiscal years 2025 and 2026, the state used $7.1 million for the Nurse Preceptor Incentive Program, $8 million for the Earn to Learn program and $3.9 million for scholarship and loan repayment programs for nurses and certified nursing assistants, according to Cheryle Rodriguez, spokesperson for VDH.
But about $10.6 million in unused funds had accumulated across those four programs over an unknown number of years.
Since 2022, the Health Department has supported 1,393 nursing students with scholarship and incentive funds, Rodriguez said. She did not respond when asked how many nursing students could have benefited from the unused money.
The scholarship programs under the Board of Health had not been administered to their full potential, Downey said.
Too many workforce development programs cause more delays
Multiple organizations have worked to build a pipeline of educational programs in rural areas of the state to increase interest in healthcare careers from an early age. But the state lacks a clear definition of what qualifies as a healthcare workforce program, according to a report from the Joint Commission on Health Care.
The General Assembly appropriated $318 million for 24 healthcare workforce programs focused in fiscal years 2023 and 2024. Another $365 million was allocated for 10 workforce programs partially focused on healthcare, according to the Joint Commission on Health Care.
Stakeholders interviewed for the study disagreed about whether their own programs should be classified as healthcare workforce initiatives. The commission identified 19 healthcare workforce programs overseen by nine agencies within the Education Secretariat and 15 programs managed by three agencies under the Health and Human Resources Secretariat.
Rather than strengthening the workforce pipeline, this patchwork of programs is complicated by regulations and payment systems administered by multiple agencies, creating confusion and inconsistent requirements, according to a report by Claude Moore Opportunities, an independent nonprofit dedicated to addressing healthcare workforce shortages in Virginia.
Dr. Bill Hazel, CEO of the nonprofit and a former state secretary of health and human resources, said it’s difficult to manage these programs when they’re distributed across multiple agencies with different revenue streams. Legislators often support funding benefits for participants, he said, but are less willing to fund the administrative infrastructure needed to coordinate programs effectively.
“Nobody really has the day job of coordinating all these programs,” Hazel said. “When there are pieces all over the place, who is responsible for aligning activities so we get the most bang for our buck?”
Hazel said the fragmented structure and under-resourced Health Department also make it harder to connect students and workers with scholarship opportunities. With multiple programs operating with different eligibility requirements, potential applicants may struggle to identify opportunities that fit their needs. Marketing and outreach efforts, he added, also tend to be underfunded.
There is a need for a consistent framework for workforce and career development, according to the report.
Claude Moore Opportunities recommended greater consistency across regulations issued by health profession licensing boards to help streamline workforce training and development.
The General Assembly has been appropriating funds to provide scholarships for Virginia students enrolled in nursing education programs since 1958, according to the Health Department.
The nursing incentive programs that will be transferred to the Virginia Health Workforce Development Authority with the passage of HB 815 represent roughly 60% of all Health Workforce Incentive Programs that VDH was responsible for administering, Rodriguez, spokesperson for the Health Department, said via email.
“Within the last 3-4 years, these programs have grown exponentially in terms of the amount of funding that was allocated to VDH but without the start-up time or designated funds to build the administrative capacity necessary to efficiently manage these programs,” Rodriguez said.
The governor’s office confirmed that the programs had not been administered to their full capacity in the past.
“Reports have shown that under the previous administration, the agency was unable to efficiently utilize” the programs, said Jack Bledsoe, spokesperson for the governor’s office.
A 2024 Joint Legislative Audit and Review Commission report found that slow invoice processing at the Virginia Department of Health under the Youngkin administration delayed payments to nursing scholarship program recipients. The study also found that VDH did not use all appropriated funds in fiscal year 2023 and did not meet prompt payment deadlines. When examining payment data for the Nursing Preceptor Incentive Program, JLARC found that the agency processed almost all payments (96%) to recipients later than the state’s 30-day prompt pay requirement.
A 2024 report from the Joint Commission on Health Care on the performance of Virginia’s health workforce programs found that limited and inconsistent data collection under the previous administration impeded reporting on the quality and impact of Virginia’s healthcare workforce programs.
The Health Department had taken steps since 2024 to improve the program, Rodriguez said.
“Those actions include re-organizing responsibilities, hiring several new staff in the winter and spring of 2025, bringing in project managers, rolling out a new application portal, implementing improvements in internal knowledge transfer and knowledge management processes, and working with other state agencies, such as the Department of Behavioral Health and Development Services (DBHDS) to discuss how to promote these programs to improve reach,” she added.
Learning from the past and looking forward
Under some of the nursing scholarship programs, recipients would need to work for about a year in a rural healthcare setting or a long-term care facility. Downey said he hopes that some of the students who benefit from the programs decide to stay in those communities to help rebuild the rural healthcare workforce.
Downey carried the bill in the House and state Senate President Pro Tempore Louise Lucas, D-Portsmouth, carried its cognate in her chamber after Spanberger identified the legislation as a key priority for the 2026 session.
During a budget year with some financial constraints, lawmakers and the governor were looking for ways to repurpose existing programs, rather than establish new ones, to ensure the state’s investments are being used or accessed to their full potential.
Rodriguez said that VDH views the transfer of the nursing incentive programs to VHWDA as a “key strategy to improving service delivery and reducing many steps administrating these programs currently require.”
She added that the transfer will allow her agency to “refocus on the Virginia State Loan Repayment Program, Virginia Behavioral Health Loan Repayment Program, and the various federal visa waiver programs available to international clinicians committed to practicing in regions of the Commonwealth where health professional shortage areas exist.”
Downey said he hopes, as the scholarship programs become more advertised and more accessible, that all of the money allocated will be used each year and that it will lead to the strengthening of the healthcare workforce, especially in rural communities.
“It’s not necessarily going to happen overnight,” he added.
The industry is still feeling the effects of the COVID-19 pandemic, which brought significant instability to the healthcare workforce as providers sought to leave the profession.
“When COVID hit, we lost a lot of experienced people,” Downey said. “We’re still feeling that, maybe not so much in outpatient practice but certainly nursing.”
The pandemic aside, Downey argued that healthcare is an industry with a higher level of job security.
Dr. Yvette Dorsey, director of the Virginia Nursing Workforce Center at Virginia Health Workforce Development Authority, said that increasing the efficacy of the state scholarship programs has become more important to bolstering the workforce following recent moves by the federal government.
The federal Department of Education removed graduate nursing degrees from its “professional degree” definition for student loan purposes in late 2025.
“It minimizes the number of dollars they will have access to from a financial aid perspective,” Dorsey said.
“Regardless of how these programs have been used in the past in Virginia, this is a new day for us to be able to stretch every dollar that much further to ensure the students have access to support for their educational and training opportunities,” said Julia Billingsley, director of policy for the Virginia Health Workforce Development Authority.
Billingsley said that the state budget had to be passed by the General Assembly and signed by the governor before she could discuss the amount of money appropriated for the programs, or their funding structure.
Details regarding who qualifies for the state scholarship programs, how often they qualify and what the award amounts will be will be posted ahead of each application cycle. The legislation called on VHWDA to rewrite the regulations around those awards. The legislation will go into effect on July 1, if a budget has been passed and signed by then.
