Section 21-29-3 - Student exchange program; terms of student loans; payback requirements.
21-29-3. Student exchange program; terms of student loans; payback requirements.
A. Financial assistance by the state for the student exchange program of the western interstate commission for higher education shall be through a loan program established pursuant to this section.
B. A student may receive a loan of tuition assistance on the following terms:
(1) the loan shall not exceed an amount equivalent to the negotiated support fee for the graduate or professional program; and
(2) the loan shall bear interest at the rate of:
(a) eighteen percent per year if the student completes his education and no portion of the principal and interest is forgiven pursuant to Subsection F of this section; and
(b) seven percent per year in all other cases.
C. Loans made pursuant to the WICHE Loan for Service Act [21-29-1 NMSA 1978] shall not accrue interest until:
(1) the commission determines the loan recipient has terminated the recipient's professional education program prior to completion;
(2) the commission determines the loan recipient has failed to fulfill the recipient's obligation to practice the recipient's profession in New Mexico; or
(3) the commission cancels a contract between a student and the commission pursuant to Section 21-29-6 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 cost of tuition assistance and shall be conditioned on the repayment of the loan to the state over a period established by the commission.
E. Loans made to a student who fails to complete his education shall become due immediately upon termination of his education. The commission shall establish terms of repayment, alternate service or cancellation terms.
F. The contract shall provide that the commission shall forgive a portion of the loan for each year that a loan recipient practices his profession in New Mexico. The loan shall be forgiven as follows:
(1) loan terms of one year shall require one year of practice for each year of the loan. 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;
(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, 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; and
(4) the commission may establish other forgiveness terms for professionals providing service in serious shortage areas.
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 commission.
H. If a student completes his professional education and does not return to New Mexico to practice his profession, the commission shall assess a penalty of up to three times the principal due, plus eighteen percent interest, unless the commission finds acceptable extenuating circumstances for why the student cannot serve. If the commission does not find acceptable extenuating circumstances for the student's failure to carry out his declared intent to practice his profession in New Mexico, the commission shall require immediate repayment of the loan plus the amount of any interest and penalty assessed pursuant to this subsection.
I. The commission may provide by regulation for the repayment of student exchange program loans in annual or other periodic installments.