0001| SENATE BILL 263 | 0002| 43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998 | 0003| INTRODUCED BY | 0004| JOSEPH J. CARRARO | 0005| | 0006| | 0007| | 0008| | 0009| | 0010| AN ACT | 0011| RELATING TO HIGHER EDUCATION; ADDING A LOAN CONDITION FOR | 0012| RECIPIENTS OF FINANCIAL ASSISTANCE THROUGH THE WESTERN | 0013| INTERSTATE COMMISSION ON HIGHER EDUCATION; AMENDING A SECTION | 0014| OF THE NMSA 1978. | 0015| | 0016| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0017| Section 1. Section 21-29-3 NMSA 1978 (being Laws 1997, | 0018| Chapter 126, Section 3) is amended to read: | 0019| "21-29-3. STUDENT EXCHANGE PROGRAM--TERMS OF STUDENT | 0020| LOANS--PAYBACK REQUIREMENTS.-- | 0021| A. Financial assistance by the state for the | 0022| student exchange program of the western interstate commission | 0023| on higher education shall be through a loan program | 0024| established pursuant to this section. | 0025| B. A student may receive a loan of tuition | - 1 - 0001| assistance on the following terms: | 0002| (1) the loan shall not exceed an amount | 0003| equivalent to the negotiated support fee for the graduate or | 0004| professional program; and | 0005| (2) the loan shall bear interest at the rate | 0006| of: | 0007| (a) eighteen percent per year if the | 0008| student completes his education and no portion of the | 0009| principal and interest is forgiven pursuant to Subsection E of | 0010| this section; and | 0011| (b) seven percent per year in all other | 0012| cases. | 0013| C. The loan shall be evidenced by a contract | 0014| between the student and the commission acting on behalf of the | 0015| state. The contract shall provide for the payment by the | 0016| state of a stated sum covering the cost of tuition assistance | 0017| and shall be conditioned on the repayment of the loan to the | 0018| state, together with interest, over a period established by | 0019| the commission. The contract shall provide further that | 0020| immediately upon completion or termination of the student's | 0021| education, all interest then accrued shall be capitalized. | 0022| D. Loans made to a student who fails to complete | 0023| his education shall become due, together with interest, | 0024| immediately upon termination of his education. The commission | 0025| shall establish terms of repayment, alternate service or | - 2 - 0001| cancellation terms. | 0002| E. The contract shall provide that the commission | 0003| shall forgive a portion of the loan principal and interest for | 0004| each year that a loan recipient practices his profession in | 0005| New Mexico. A loan recipient shall practice his profession | 0006| with a nonprofit organization or a community-service-based | 0007| organization engaged in that profession for a period of one | 0008| year as a condition of receiving his loan. A loan recipient | 0009| required to practice his profession for more than one year in | 0010| New Mexico and who has fulfilled the initial one-year | 0011| requirement may practice with an organization of his choice. | 0012| Loan principal and interest shall be forgiven as follows: | 0013| (1) loan terms of one year shall require one | 0014| year of practice for each year of the loan. Upon completion | 0015| of service, one hundred percent of the principal plus accrued | 0016| interest shall be forgiven; | 0017| (2) loan terms of two years shall require one | 0018| year of practice for each year of the loan. Upon completion | 0019| of the first year of service, fifty percent of the principal | 0020| plus accrued interest shall be forgiven; upon completion of | 0021| the second year of service, the remainder of the principal | 0022| plus accrued interest shall be forgiven; | 0023| (3) for loan terms of three years or more, | 0024| forty percent of the principal plus accrued interest shall be | 0025| forgiven upon completion of the first year of service, thirty | - 3 - 0001| percent of the principal plus accrued interest shall be | 0002| forgiven upon completion of the second year of service and the | 0003| remainder of the principal plus accrued interest shall be | 0004| forgiven upon completion of the third year of service; and | 0005| (4) the commission may establish other | 0006| forgiveness terms for professionals providing service in | 0007| serious shortage areas. | 0008| F. Loan recipients shall serve a complete year in | 0009| order to receive credit for that year. The minimum credit for | 0010| a year shall be established by the commission. | 0011| G. If a student completes his professional | 0012| education and does not return to New Mexico to practice his | 0013| profession, the commission shall assess a penalty of up to | 0014| three times the principal due, plus eighteen percent interest, | 0015| unless the commission finds acceptable extenuating | 0016| circumstances for why the student cannot serve. If the | 0017| commission does not find acceptable extenuating circumstances | 0018| for the student's failure to carry out his declared intent to | 0019| practice his profession in New Mexico, the commission shall | 0020| require immediate repayment of the unpaid principal amount of | 0021| the loan plus accrued interest owed the state plus the amount | 0022| of any penalty assessed pursuant to this subsection. | 0023| H. The commission may provide by regulation for | 0024| the repayment of student exchange program loans in annual or | 0025| other periodic installments." | - 4 -