SENATE BILL 21
49th legislature - STATE OF NEW MEXICO - second session, 2010
INTRODUCED BY
Timothy M. Keller
AN ACT
RELATING TO HIGHER EDUCATION; ENACTING THE GRADUATE STUDENT LOTTERY TUITION LOAN ACT; SETTING ASIDE A PORTION OF THE LOTTERY TUITION FUND ANNUALLY TO PROVIDE LOANS TO CERTAIN GRADUATE STUDENTS; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 6-24-23 NMSA 1978 (being Laws 1995, Chapter 155, Section 23, as amended) is amended to read:
"6-24-23. LOTTERY TUITION FUND CREATED--PURPOSE.--
A. The "lottery tuition fund" is created in the state treasury. The fund shall be administered by the [commission on] higher education department. Earnings from investment of the fund shall accrue to the credit of the fund. Any balance in the fund at the end of any fiscal year shall remain in the fund for appropriation by the legislature as provided in this section.
B. Except as provided in Subsection C of this section, money in the lottery tuition fund is appropriated to the [commission on] higher education department for distribution to New Mexico's public post-secondary educational institutions to provide tuition assistance for New Mexico resident undergraduates as provided by law.
C. Five percent of the annual proceeds of the fund shall be transferred to the graduate student lottery tuition loan fund to provide tuition assistance to qualifying graduate students pursuant to the Graduate Student Lottery Tuition Loan Act."
Section 2. [NEW MATERIAL] SHORT TITLE.--Sections 2 through 10 of this act may be cited as the "Graduate Student Lottery Tuition Loan Act".
Section 3. [NEW MATERIAL] DEFINITIONS.--As used in the Graduate Student Lottery Tuition Loan Act:
A. "department" means the higher education department;
B. "educational institution" means an educational institution enumerated in Article 12, Section 11 of the constitution of New Mexico that offers master's or doctoral degrees;
C. "fund" means the graduate student lottery tuition loan fund;
D. "graduate program" means a department-approved post-baccalaureate program offered by an educational institution that leads to a master's or doctoral degree;
E. "graduate student" means a New Mexico resident who is enrolled in or accepted into a graduate program; and
F. "loan" means a grant of money from the fund to defray the costs of a post-baccalaureate education at an educational institution, which grant requires either repayment with interest or repayment in services.
Section 4. [NEW MATERIAL] GRADUATE STUDENT LOTTERY TUITION LOANS--QUALIFICATIONS.--
A. The department is authorized to grant a loan to defray the expenses of a graduate program for a graduate student deemed qualified by the department to receive the loan, upon such terms and conditions as may be imposed by rules of the department. Loans may be granted only for graduate programs leading to a master's or doctoral degree in fields for which New Mexico law does not otherwise provide a loan-for-service program. The department may prioritize for loans those professions for which there is a demonstrated need in New Mexico and may require a loan recipient to serve in an area of the state that is underserved by those professions.
B. The department shall only receive, pass upon and allow or disallow an application for a loan made by a graduate student who:
(1) is a resident of New Mexico;
(2) graduated from a public or accredited private high school in New Mexico;
(3) received a bachelor's degree from a regionally accredited college or university or is otherwise qualified for admittance to the graduate program of an educational institution; and
(4) declares the intention to work in New Mexico for at least three years within the period specified in the loan contract, not to exceed six years.
C. The department shall make a full and careful investigation of the ability, character and qualifications of each applicant to determine fitness to become a recipient of a lottery tuition graduate student loan. The investigation of each applicant shall include an investigation of the ability of the applicant to pay the expenses for a graduate education. The department may give preference to qualified applicants who are determined to be unable to pay the expenses in obtaining a graduate education.
Section 5. [NEW MATERIAL] DELEGATION OF DUTIES TO OTHER AGENCIES.--The department may arrange with other agencies for the performance of services required by the provisions of the Graduate Student Lottery Tuition Loan Act.
Section 6. [NEW MATERIAL] GRADUATE STUDENT LOANS--CONTRACT TERMS--REPAYMENT.--
A. Each applicant who is approved for a loan by the department may be granted a loan, in such amounts and for such periods as determined by the department, with which to defray expenses of a graduate program if the applicant files with the department a declaration of intent to practice a profession in New Mexico.
B. The loans shall not exceed the cost of tuition and fees and shall bear interest at the rate of:
(1) eighteen percent per year if the student completes the graduate program and no portion of the principal and interest is forgiven pursuant to Subsection F of this section; and
(2) seven percent per year in all other cases.
C. A loan made pursuant to the Graduate Student Lottery Tuition Loan Act shall not accrue interest until:
(1) the department determines that the loan recipient has terminated the recipient's graduate education prior to completion;
(2) the department determines that the loan recipient has failed to fulfill the recipient's obligation to work in New Mexico; or
(3) the department cancels a contract between a student and the department pursuant to Section 9 of the Graduate Student Lottery Tuition Loan Act.
D. The 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 costs of a graduate education and shall be conditioned upon the repayment of the loan to the state over a period established by the department in consultation with the student after completion of the graduate program and any period of internship or residency required to complete the student's education.
E. Loans made to students who fail to complete their graduate education shall become due immediately upon termination of their education. The department, in consultation with the student, shall establish terms of repayment, alternate service or cancellation terms.
F. The contract shall provide that the department shall forgive a portion of the loan for each year that a loan recipient practices a profession in New Mexico. The loan shall be forgiven as follows:
(1) loan terms of one year shall require one year of practice. Upon completion of service, one hundred percent of the loan shall be forgiven;
(2) loan terms of two years shall require one year of practice for each year of the loan. Upon completion of the first year of service, fifty percent of the loan shall be forgiven; upon completion of the second year of service, the remainder of the loan shall be forgiven; and
(3) for loan terms of three years, forty percent of the loan shall be forgiven upon completion of the first year of service, thirty percent of the loan shall be forgiven upon completion of the second year of service and the remainder of the loan shall be forgiven upon completion of the third year of service.
G. Loan recipients shall serve a complete year in order to receive credit for that year. The minimum credit for a year shall be established by the department.
H. If a loan recipient completes graduate education and does not work in New Mexico within six years of completion, the department shall assess a penalty of up to three times the principal due, plus eighteen percent interest, unless the department finds acceptable extenuating circumstances for why the student cannot serve. If the department does not find acceptable extenuating circumstances for the student's failure to carry out a declaration of intent to serve in New Mexico, the department shall require immediate repayment of the loan plus the amount of any interest and penalty assessed pursuant to this subsection.
I. The department shall adopt rules to implement the provisions of this section. The rules may provide for the repayment of lottery tuition graduate student loans in annual or other periodic installments.
Section 7. [NEW MATERIAL] CONTRACTS--LEGAL ASSISTANCE--ENFORCEMENT.--The general form of the contract provided for in Section 6 of the Graduate Student Lottery Tuition Loan Act shall be prepared and approved by the attorney general and signed by the student and a designee of the department on behalf of the state. The department is vested with full and complete authority and power to sue in its own name for any balance due the state from any student on any such contract.
Section 8. [NEW MATERIAL] FUND CREATED--TRANSFER PROCEEDS FROM LOTTERY TUITION FUND--METHOD OF PAYMENT.--The "graduate student lottery tuition loan fund" is created as a nonreverting fund in the state treasury. The fund consists of appropriations for loans, repayments of loans, gifts, grants, donations, income from investment of the fund and transfers from the lottery tuition fund each year. The department shall administer the fund and money in the fund is appropriated to the department to carry out the purposes of this section. Disbursements from the fund shall be made by warrant of the secretary of finance and administration on vouchers signed by the designated representative of the department.
Section 9. [NEW MATERIAL] CANCELLATION.--The department may cancel any contract made between it and any student for any reasonable cause deemed sufficient by the department.
Section 10. [NEW MATERIAL] REPORTS.--The department shall make annual reports to the governor and the legislature, prior to each regular session, of its activities, including:
A. the number and amounts of loans granted;
B. the names and addresses of persons to whom loans were granted;
C. the educational institutions attended by those receiving the loans;
D. the names and locations of practice of those persons who have completed their graduate education and are practicing in New Mexico as a result of a student loan pursuant to the Graduate Student Lottery Tuition Loan Act;
E. the names and addresses of persons who have completed their graduate education but have not yet started to work in New Mexico; and
F. the names of persons who have paid their graduate student loan in lieu of working in New Mexico.
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