SENATE BILL 131
55th legislature - STATE OF NEW MEXICO - second session, 2022
INTRODUCED BY
Cliff R. Pirtle
AN ACT
RELATING TO HIGHER EDUCATION; ENACTING THE CAREER TECHNICAL EDUCATION LOAN FOR SERVICE ACT; CREATING A LOAN FOR SERVICE PROGRAM IN THE HIGHER EDUCATION DEPARTMENT; PROVIDING CONTRACT TERMS; REQUIRING REPAYMENT THROUGH SERVICE; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Career Technical Education Loan for Service Act"."
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Career Technical Education Loan for Service Act:
A. "career technical program" means a vocational education program offered at a community college that leads to an associate of applied science degree or a vocational certificate;
B. "community college" means a public two-year post-secondary educational institution in New Mexico or a branch community college of a state four-year institution of higher education;
C. "department" means the higher education department;
D. "fund" means the career technical education loan for service fund;
E. "loan recipient" means a person who, as a student, has received a career technical education loan from the department; and
F. "student" means a resident of New Mexico who is enrolled in or about to be enrolled in a career technical program paid for by a career technical education loan.
SECTION 3. [NEW MATERIAL] CAREER TECHNICAL EDUCATION LOANS--PURPOSES--RULES--QUALIFICATIONS--PRIORITY.--
A. The department may grant a career technical education loan to pay tuition and fees for a student deemed qualified by the department to receive a loan for career technical education on such terms and conditions as required by rule of the department.
B. To be eligible for a career technical education loan, an applicant shall:
(1) be a citizen of the United States and a resident of New Mexico and must maintain residency in New Mexico;
(2) have earned a high school diploma or a high school equivalency credential;
(3) meet enrollment criteria for the community college and the career technical program for which the student is applying for a loan;
(4) declare the student's intent to practice the career technical vocation within the state; and
(5) maintain continuing eligibility by:
(a) enrolling and completing the number of credit hours covered by the loan as provided by department rule; and
(b) maintaining a grade point average of 2.0 or higher on a scale of 4.0 or its equivalent.
C. The department shall make a full and careful investigation of the ability, character and qualifications of each applicant and determine fitness to be a loan recipient. Priority for loans shall be given to students who are held or previously were held in a corrections facility. As used in this subsection, "corrections facility" means:
(1) a juvenile detention facility operated by or for the children, youth and families department;
(2) the penitentiary of New Mexico, which consists of the penitentiary at Santa Fe and other places in the state designated by the secretary of corrections; or
(3) the juvenile probation and aftercare services of the juvenile justice division of the children, youth and families department to the extent delegated by the Delinquency Act or the adult probation and parole division of the corrections department to the extent delegated by the Probation and Parole Act.
D. The department shall arrange for graduating loan recipients to receive assistance in locating appropriate positions, if needed.
SECTION 4. [NEW MATERIAL] LOANS--CONTRACT TERMS--REPAYMENT.--
A. Each approved applicant shall be granted a career technical education loan in such amounts and for such periods as determined by the department, depending on the cost and time required to receive a vocational certificate or an associate of applied science degree.
B. The loan amount shall be paid to the community college for deposit in the student's account to pay tuition and fees charged by the community college.
C. Career technical education loans shall bear interest at the rate of:
(1) eighteen percent per year if no portion of the principal and interest is forgiven pursuant to Subsection G of this section; and
(2) up to seven percent per year in all other cases.
D. Loans shall not accrue interest until the department:
(1) determines that the student has graduated;
(2) determines that the student has terminated the career technical program prior to completion;
(3) determines that the loan recipient has failed to fulfill the obligation to practice the career technical vocation in New Mexico; or
(4) cancels the contract between a loan recipient and the department for other reasons provided by rule of the department.
E. A career technical education loan shall be evidenced by a contract between the student and the department acting on behalf of the state. The contract shall provide for the payment by the state of a stated sum covering the cost of a career technical education and shall be conditioned upon the repayment of the loan to the state over a period negotiated between the loan recipient and the department after completion of the career technical program.
F. Loans made to students who fail to complete their career technical program shall become due immediately upon termination of the career technical education. The department, in consultation with the loan recipient, shall establish terms of repayment, alternate service or cancellation of the loan terms for extenuating circumstances as provided by department rule.
G. The contract shall provide that the department may forgive a portion of the loan for each year that a loan recipient is employed in the career technical vocation in New Mexico as approved by the department. The loan shall be forgiven as follows:
(1) for a loan term of one year or less, one year of career technical employment in New Mexico shall be required. Upon completion of the year's employment, one hundred percent of the loan shall be forgiven;
(2) for a loan term of more than one year but not more than two years, one year of career technical employment in New Mexico for each year of the loan shall be required. Upon completion of the first year of employment, fifty percent of the loan shall be forgiven. Upon completion of the second year of employment, the remainder of the loan shall be forgiven; and
(3) for a loan term of more than two years but not more than three years, forty percent of the loan shall be forgiven upon completion of the first year of employment, thirty percent of the loan shall be forgiven upon completion of the second year of employment and the remainder of the loan shall be forgiven upon completion of the third year of employment.
H. Loan recipients shall serve a complete year of employment to receive credit for that year. The minimum credit for a year shall be established by the department.
I. The department shall adopt rules to implement the provisions of this section. The rules may provide for the repayment of career technical education loans in annual or other periodic installments.
J. As used in this section, "employment" includes qualified self-employment approved by the department.
SECTION 5. [NEW MATERIAL] CANCELLATION.--The department may cancel a contract made between the department and a student for any reasonable cause deemed sufficient by the department.
SECTION 6. [NEW MATERIAL] DELEGATION OF DUTIES.--The department may arrange with other agencies for the performance of services required by the provisions of the Career Technical Education Loan for Service Act.
SECTION 7. [NEW MATERIAL] CONTRACTS--ENFORCEMENT.--The general form of the career technical education loan contract shall be prepared and approved by the attorney general and signed by the student and designated representatives of the department on behalf of the state. The department is vested with full authority and power to sue in its own name for any balance due the state from a student on a career technical education loan contract.
SECTION 8. [NEW MATERIAL] FUND CREATED--METHOD OF PAYMENT.--The "career technical education loan for service fund" is created as a nonreverting fund in the state treasury. All money appropriated for loans to students and all payments of loan principal and interest shall be credited to the fund. The department may deposit money in the fund with the department's administrative agent. All payments for loans shall be made upon vouchers signed by the designated representative of the department.
SECTION 9. [NEW MATERIAL] REPORTS.--The department shall make annual reports to the governor and to the legislature prior to each regular legislative session of its activities and recommendations, including:
A. the number and amounts of loans granted;
B. the names and addresses of students to whom loans were granted and the career technical program attended by those students; and
C. the list of loan recipients who have graduated and the name and location of each loan recipient's employer and the loan recipient's job title.
SECTION 10. APPROPRIATION.--Five million dollars ($5,000,000) is appropriated from the general fund to the career technical education loan for service fund for expenditure in fiscal year 2023 and subsequent fiscal years to carry out the provisions of the Career Technical Education Loan for Service Act. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.
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