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