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committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

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F I S C A L I M P A C T R E P O R T

SPONSOR Miera

DATE TYPED 03/07/05 HB 132/aHEC

SHORT TITLE Educational Assistance Foundation Loans

SB

ANALYST Williams

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

None

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Commission on Higher Education

SUMMARY

Synopsis of HEC Amendment

The House Education Committee amendment makes clarifying changes to conform the bill and

Section 21-21A-11 NMSA 1978 to achieve the intent of the bill. One component of the new

lending programs to be developed by the New Mexico Education Assistance Foundation

(NMEAF) would be focused on alternative loans, specifically uninsured loans. The revenue

stream from these loans would be pledged in the tax-exempt bond issuances of the NMEAF.

NMEAF indicates the new program would be developed such that its current AAA bond rating

would be maintained.

Synopsis of Original Bill

House Bill 132 expands the authority of the New Mexico Educational Assistance Act. The New

Mexico Educational Assistance Foundation, also known as New Mexico Student Loans, may en-

gage in loan service to any post-secondary institution approved by the foundation. Thus, student

loans would be made to students attending out-of-state post-secondary institutions, to both New

Mexico residents and non-New Mexico residents, as well as the in-state market. Further, the bill

removes the requirement that educational loans serviced by the organization be insured.

House Bill 132/aHEC -- Page 2

Significant Issues

Currently, NMEAF is the agent for various in-state educational institutions and the private lend-

ing community. As an agent, NMEAF holds and disburses funds for the institutions to qualified

students.

FISCAL IMPLICATIONS

The bill does not contain an appropriation.

POSSIBLE QUESTIONS

1.

How would the proposal impact revenues and expenses of the organization.

2.

What are the potential risks of the proposal.

3.

What would be the implications of default of an uninsured loan.

4.

How many of the organization’s counterparts in other states engage in these practices.

5.

If net profits of the organization are projected to increase, how would those profits be

used. How would these profits benefit New Mexico students.

AW/njw:lg