SENATE BILL 297
48th legislature - STATE OF NEW MEXICO - second session, 2008
INTRODUCED BY
Joseph J. Carraro
AN ACT
RELATING TO HIGHER EDUCATION; ENACTING THE GRADUATE STUDENT LOAN ACT; PROVIDING POWERS AND DUTIES; PROVIDING FOR ELIGIBILITY AND QUALIFICATIONS; PROVIDING FOR CONTRACTS; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. SHORT TITLE.--This act may be cited as the "Graduate Student Loan Act".
Section 2. DEFINITIONS.--As used in the Graduate Student Loan Act:
A. "department" means the higher education department;
B. "graduate student" means a person who is or will be enrolled in a graduate degree-granting program at a participating institution; and
C. "participating institution" means a four-year institution of higher learning named in Article 12, Section 11 of the constitution of New Mexico that has one or more graduate degree-granting programs.
Section 3. DEPARTMENT POWERS AND DUTIES--DELEGATION OF DUTIES--APPLICATIONS--GRADUATE STUDENT ELIGIBILITY--QUALIFICATIONS.--
A. The department shall establish a "graduate student loan program" to provide low-interest loans to eligible and qualified graduate students to help defray the education-related costs of attending graduate school.
B. The department may delegate to other agencies or contract for the performance of services required by the provisions of the Graduate Student Loan Act.
C. The department shall provide by rule for an application process for students seeking graduate student loans.
D. A graduate student who is or will be enrolled in a graduate degree-granting program for which the state provides a loan-for-service or loan repayment option is not eligible for a graduate student loan under the Graduate Student Loan Act.
E. To qualify for a graduate student loan, a person must:
(1) be a resident of New Mexico;
(2) be enrolled in or be accepted for enrollment in a graduate degree-granting program at a participating institution;
(3) demonstrate financial need as provided by rule of the department;
(4) be a full-time student; and
(5) meet any other requirements provided by rule of the department.
F. A graduate student must demonstrate academic progress as provided by rule of the department to continue to receive a graduate student loan.
G. A graduate student may be eligible for a loan of up to one thousand dollars ($1,000) per semester for no more than six semesters; provided that a loan shall not exceed the cost of tuition and fees for the semester in which the loan is given.
Section 4. LOW-INTEREST LOANS--LOAN REPAYMENT--CONTRACT TERMS.--
A. The general form of the contract required for a graduate student loan shall be prepared and approved by the attorney general and signed by the graduate student and the secretary of higher education or the designated representative of the department on behalf of the state before payment of the loan to the student. The contract shall provide for the payment of the principal and interest at three percent a year on a schedule adopted by rule of the department.
B. When a person who has received a loan fails to make payments due in accordance with an executed contract, the department may declare the full amount of remaining principal and interest due and payable immediately. The department is vested with full authority and power to sue in its own name for any balance due the state from a person on a contract. No payment shall be made to a graduate student until the student has executed the contract. For the purpose of the Graduate Student Loan Act, a graduate student has the capacity to contract and is bound by any contract executed by the student; the defense that the student was a minor at the time the student executed a contract is not available to the student in any action arising on the student's contract. Loan payments shall be made to the participating institution each semester.
C. The department may cancel a contract made between it and a graduate student for reasonable cause deemed sufficient by the department.
Section 5. GRADUATE STUDENT LOAN FUND.--
A. The "graduate student loan fund" is created as a nonreverting fund in the state treasury. The fund consists of appropriations, loan repayments, gifts, grants, donations and income from investment of the fund. The department shall administer the fund, and money in the fund is appropriated to provide graduate student loans. Disbursements of the fund shall be made on warrants of the secretary of finance and administration pursuant to vouchers signed by the secretary of higher education or the secretary's authorized representative.
B. The department shall collect all interest and principal payments made by the student under the terms of the contract and shall deposit the payments in the graduate student loan fund.
Section 6. APPROPRIATION.--Two million dollars ($2,000,000) is appropriated from the general fund to the graduate student loan fund for expenditure in fiscal year 2009 and subsequent fiscal years to provide loans to eligible and qualified graduate students. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.
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