Section 21-22B-6 - Nursing student loans; contract terms; repayment.
21-22B-6. Nursing student loans; contract terms; repayment.
A. Each applicant who is approved for a loan by the commission may be granted a loan, in such amounts for such periods as determined by the commission, with which to defray expenses incurred in obtaining a nursing education; provided that the applicant files with the commission a declaration of intent to practice as a licensed nurse in areas of New Mexico designated as underserved.
B. The loans shall not exceed the necessary expenses incurred while attending a program of nursing and shall bear interest at the rate of:
(1) eighteen percent per year if the student completes his nursing education 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. Loans made pursuant to the Nursing Student Loan for Service Act shall not accrue interest until:
(1) the commission determines the loan recipient has terminated the recipient's nursing education prior to completion;
(2) the commission determines the loan recipient has failed to fulfill the recipient's obligation to practice nursing in areas approved by the health profession advisory committee; or
(3) the commission cancels a contract between a student and the commission pursuant to Section 21-22B-9 NMSA 1978.
D. The loan shall be evidenced by a contract between the student and the commission 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 nursing education and shall be conditioned upon the repayment of the loan to the state over a period negotiated between the student and the commission after completion of a nursing program.
E. Loans made to students who fail to complete their nursing education shall become due immediately upon termination of nursing education. The commission, in consultation with the student, shall establish terms of repayment, alternate service or cancellation terms with the commission.
F. The contract shall provide that the commission may forgive a portion of the loan for each year that a loan recipient practices nursing in areas approved by the health profession advisory committee. The loan shall be forgiven as follows:
(1) loan terms of one year shall require one year of practice in a designated health professional shortage area. 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 in a designated health professional shortage area 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 or more, forty percent of the loan shall be forgiven upon completion of the first year of service in a designated health professional shortage area, 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. 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 commission.
H. The commission shall adopt regulations to implement the provisions of this section. The regulations may provide for the repayment of nursing student loans in annual or other periodic installments.