46th legislature - STATE OF NEW MEXICO - first session, 2003

RELATING TO EDUCATION; CHANGING PAYBACK PROVISIONS FOR SOME STUDENT LOANS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 21-21I-1 NMSA 1978 (being Laws 1990 (1st S.S.), Chapter 8, Section 1, as amended) is amended to read:

"21-21I-1. SHORT TITLE.--Chapter 21, Article 21I NMSA 1978 may be cited as the "Minority Doctoral Assistance [Loan for] Service Program Act"."

Section 2. Section 21-21I-2 NMSA 1978 (being Laws 1990 (1st S.S.), Chapter 8, Section 2, as amended) is amended to read:

"21-21I-2. PURPOSE.--The purpose of the Minority Doctoral Assistance [Loan for] Service Program Act is to increase the number of ethnic minorities and women available to teach engineering, physical or life sciences, mathematics and other academic disciplines in which ethnic minorities and women are demonstrably underrepresented in New Mexico colleges and universities. Additionally, the purpose of the Minority Doctoral Assistance [Loan for] Service Program Act is to create a partnership [between] among the state, higher education institutions and students that will lead to greater participation of ethnic minorities and women in the ranks of college and university faculties, enhancing educational opportunities and quality for all New Mexico citizens."

Section 3. Section 21-21I-3 NMSA 1978 (being Laws 1990 (1st S.S.), Chapter 8, Section 3, as amended) is amended to read:

"21-21I-3. DEFINITIONS.--As used in the Minority Doctoral Assistance [Loan for] Service Program Act:

A. "academic committee" means a committee at a sponsoring institution appointed by the president of the institution and composed of two faculty members, two academic administrators and one central administrator;

B. "commission" means the commission on higher education;

C. "eligible institution" means a commission-approved institution of higher education that offers a doctoral degree-granting program in the fields of engineering, physical or life sciences, mathematics or other academic disciplines in which ethnic minorities and women are demonstrably underrepresented;

D. "sponsoring institution" means a four-year public post-secondary institution located in New Mexico; and

E. "student" means an individual who is an ethnic minority or a woman and who has been accepted for enrollment at an eligible institution to undertake a post-baccalaureate course of instruction in the field of engineering, physical or life sciences or mathematics."

Section 4. Section 21-21I-5 NMSA 1978 (being Laws 1990 (1st S.S.), Chapter 8, Section 5) is amended to read:

"21-21I-5. MINORITY DOCTORAL ASSISTANCE CONTRACTS AND TERMS.--

A. A minority doctoral assistance grant shall be evidenced by a contract between the student and the sponsoring institution.

B. The contract shall:

(1) provide for the payment to the student by the sponsoring institution of no more than twenty-five thousand dollars ($25,000) per year for no more than four years;

(2) be conditioned upon the student's earning a doctoral degree in the field of engineering, physical or life sciences, mathematics or any other academic discipline in which ethnic minorities and women are demonstrably underrepresented;

(3) require the student to agree to begin to teach in a faculty position at the sponsoring institution within five years of completion of the doctoral degree; and

(4) require the student to teach in a faculty position at the sponsoring institution for a minimum of one year for each year a minority doctoral assistance grant was awarded.

C. Grants to students who fail to complete the terms of their contract shall be considered loans with an applied annual interest rate [equal to the treasury note rate in existence at the time the contract is entered into plus two] of seven percent. The loan shall become due in equal parts to the state and the sponsoring institution immediately upon the student's termination of the contractual agreement.

D. The general form of the contract shall be approved by the attorney general and signed by the student and an authorized representative of the sponsoring institution. The sponsoring institution is vested with full and complete authority and power to sue in its own name for any balance due it and the state from any student violating the terms of any such contract.

E. The commission shall approve all minority doctoral assistance contracts entered into between students and sponsoring institutions."

Section 5. Section 21-21I-7 NMSA 1978 (being Laws 1990 (1st S.S.), Chapter 8, Section 7, as amended) is amended to read:

"21-21I-7. RULES AND REGULATIONS.--The commission may adopt such rules, regulations and procedures as necessary or appropriate to implement the provisions of the Minority Doctoral Assistance [Loan for] Service Program Act. A financial aid officer may exercise professional judgment when special circumstances exist to adjust the cost of attendance or the expected family contribution or to modify other factors that make this program responsive to a student's special financial circumstances and for which documentation exists in the student's file within the parameters authorized for this program."

Section 6. Section 21-22-1 NMSA 1978 (being Laws 1975, Chapter 244, Section 1, as amended) is amended to read:

"21-22-1. SHORT TITLE.--Chapter 21, Article 22 NMSA 1978 may be cited as the "Medical Student [Loan for] Service Program Act"."

Section 7. Section 21-22-2 NMSA 1978 (being Laws 1975, Chapter 244, Section 2, as amended) is amended to read:

"21-22-2. PURPOSE--COMMITTEE.--The purpose of the Medical Student [Loan for] Service Program Act is to meet the emergency currently existing resulting from the shortage of medical doctors and physician assistants in the less populated areas of the state by increasing the number of practitioners in rural areas through a program of loans for medical and physician assistant students. The program shall require as a condition of each loan that the student declare his intent that after licensure he will commence his practice of medicine within one of the areas of the state designated by the health profession advisory committee."

Section 8. Section 21-22-3 NMSA 1978 (being Laws 1975, Chapter 244, Section 3, as amended) is amended to read:

"21-22-3. DEFINITIONS.--As used in the Medical Student [Loan for] Service Program Act:

A. "commission" means the commission on higher education;

B. "loan" means a grant of funds to defray the costs incidental to a medical education, under a contract between the commission and a medical student, requiring either repayment with interest or repayment in services; and

C. "student" means a resident of New Mexico who is a student enrolled in a school of medicine."

Section 9. Section 21-22-6 NMSA 1978 (being Laws 1975, Chapter 244, Section 6, as amended) is amended to read:

"21-22-6. MEDICAL 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 and for such periods as determined by the commission, with which to defray expenses incurred in obtaining a medical education at any reputable and accredited medical school in the United States if the applicant files with the commission a declaration of his intent to practice his profession as a licensed physician or physician assistant in areas of New Mexico designated as not being adequately served by medical practitioners.

B. The loans shall not exceed the necessary expenses incurred while attending a medical school or college and shall bear interest at the rate of

[(1) eighteen percent per year if the student completes his medical education and no portion of the principal and interest is forgiven pursuant to Subsection E of this section; and

(2)] seven percent per year [in all other cases].

C. 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 medical education and shall be conditioned upon the repayment of the loan to the state, together with interest, over a period established by the commission in consultation with the student after completion of medical school and any period of internship or residency required to complete the student's education. [The contract shall further provide that immediately upon completion or termination of the student's medical education, all interest then accrued shall be capitalized.]

D. Loans made to students who fail to complete their medical education shall become due, together with interest, immediately upon termination of their medical education. The commission, in consultation with the student, shall establish terms of repayment, alternate service or cancellation terms. The contract shall further provide that immediately upon termination of the student's medical education, the loan shall bear interest at a rate of seven percent per year and shall be capitalized.

E. The contract shall provide that the commission shall forgive a portion of the loan [principal and interest] for each year that a loan recipient practices his profession as a licensed physician or physician assistant in areas approved by the health profession advisory committee as not being adequately served by medical practitioners. [Loan principal and interest] Loans 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 [principal plus accrued interest] 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 [principal plus accrued interest] loan shall be forgiven. Upon completion of the second year of service, the remainder of the [principal plus accrued interest] loan shall be forgiven; and

(3) for loan terms of three years or more, forty percent of the [principal plus accrued interest] loan shall be forgiven upon completion of the first year of service in a designated health professional shortage area, thirty percent of the [principal plus accrued interest] loan shall be forgiven upon completion of the second year of service and the remainder of the [principal plus accrued interest] loan shall be forgiven upon completion of the third year of service.

F. 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.

G. If a loan recipient completes his professional education and does not serve in a health professional shortage area, the commission shall assess a penalty of up to [three] two times the principal due, plus [eighteen] seven 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 serve in a health professional shortage area in the state, the commission shall require immediate repayment of the unpaid principal amount of the loan plus accrued interest owed the state plus the amount of any penalty assessed pursuant to this subsection. The contract shall further provide that upon failure to provide service, interest shall be accrued from the date of the loan disbursement and shall be capitalized.

H. The commission shall adopt regulations to implement the provisions of this section. The regulations may provide for the repayment of medical student loans in annual or other periodic installments."

Section 10. Section 21-22-8 NMSA 1978 (being Laws 1975, Chapter 244, Section 8, as amended) is amended to read:

"21-22-8. FUND CREATED--METHOD OF PAYMENT.--

A. There is created in the state treasury the "medical student [loan for service] assistance program fund". All money appropriated for loans to medical students under the Medical Student [Loan for] Service Program Act shall be credited to the fund. All payments of principal and interest on loans made pursuant to that act received by the commission shall be deposited with the state treasurer to the credit of the fund. All payments of funds for loans shall be made upon vouchers signed by the designated representatives of the commission.

B. The medical student assistance program fund is a new name for the medical student loan for service fund and is not a new fund created by this 2003 act. The purposes and balances of the medical student loan for service fund as they existed before July 1, 2003 remain the purposes and balances of the medical student assistance program fund."

Section 11. Section 21-22-10 NMSA 1978 (being Laws 1975, Chapter 244, Section 10, as amended) is amended to read:

"21-22-10. REPORTS.--The commission shall make annual reports to the governor and to the legislature, prior to each regular session, of its activities, the loans granted, the names and addresses of persons to whom loans were granted and the medical schools or colleges attended by those receiving the loans, together with a list of the names and locations of practice of those students who have completed their education and have become licensed physicians or physician assistants in New Mexico as a result of a student loan pursuant to the Medical Student [Loan for] Service Program Act."

Section 12. Section 21-22A-1 NMSA 1978 (being Laws 1978, Chapter 109, Section 1, as amended) is amended to read:

"21-22A-1. SHORT TITLE.--Chapter 21, Article 22A NMSA 1978 may be cited as the "Osteopathic Medical Student [Loan for] Service Program Act"."

Section 13. Section 21-22A-2 NMSA 1978 (being Laws 1978, Chapter 109, Section 2, as amended) is amended to read:

"21-22A-2. PURPOSE--COMMITTEE.--The purpose of the Osteopathic Medical Student [Loan for] Service Program Act is to meet the emergency currently existing resulting from the shortage of osteopathic medical doctors and osteopathic physician's assistants in the less populated areas of the state by increasing the number of practitioners in rural areas through a program of loans for osteopathic medical students. The program shall require as a condition of each loan that the student declare his intent that after licensure he will commence his practice as an osteopathic physician or osteopathic physician's assistant within one of the areas of the state designated by the health profession advisory committee."

Section 14. Section 21-22A-3 NMSA 1978 (being Laws 1978, Chapter 109, Section 3, as amended) is amended to read:

"21-22A-3. DEFINITIONS.--As used in the Osteopathic Medical Student [Loan for] Service Program Act:

A. "commission" means the commission on higher education;

B. "loan" means a grant of funds to defray the costs incidental to an osteopathic medical education, under a contract between the commission and an osteopathic medical student, requiring either repayment with interest or repayment in services;

C. "osteopathic medical education" means the education required to be an osteopathic physician or osteopathic physician's assistant; and

D. "student" means a resident of New Mexico who is a student enrolled in a school of osteopathic medicine or an osteopathic physician's assistant program."

Section 15. Section 21-22A-6 NMSA 1978 (being Laws 1978, Chapter 109, Section 6, as amended) is amended to read:

"21-22A-6. OSTEOPATHIC MEDICAL 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 and for such periods as determined by the commission, with which to defray expenses incurred in obtaining an osteopathic medical education at any reputable and accredited osteopathic medical school in the United States if the applicant files with the commission a declaration of his intent to practice his profession as a licensed osteopathic physician or osteopathic physician's assistant in areas of New Mexico designated as not being adequately served by osteopathic medical practitioners.

B. The loan shall not exceed the necessary expenses incurred while attending an osteopathic medical school or college or osteopathic physician's assistant program and shall bear interest at the rate of

[(1) eighteen percent per year if the student completes his osteopathic medical education and no portion of the principal and interest is forgiven pursuant to Subsection E of this section; and

(2)] seven percent per year [in all other cases].

C. 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 an osteopathic medical education and shall be conditioned upon the repayment of the loan to the state, together with interest, over a period established by the commission in consultation with the student after the completion of osteopathic medical school or an osteopathic physician's assistant program and any period of internship or residency required to complete the student's education. [The contract shall further provide that immediately upon completion or termination of the student's osteopathic medical education, all interest then accrued shall be capitalized.]

D. Loans made to students who fail to complete their osteopathic medical education shall become due, together with interest, immediately upon termination of their osteopathic medical education. The commission, in consultation with the student, shall establish terms of repayment, alternate service or cancellation terms. The contract shall further provide that immediately upon termination of the student's osteopathic medical education, the loan shall bear interest at a rate of seven percent per year and shall be capitalized.

E. The contract shall provide that the commission shall forgive a portion of the loan [principal and interest] for each year that a loan recipient practices his profession as a licensed osteopathic physician or osteopathic physician's assistant in areas approved by the health profession advisory committee as not being adequately served by osteopathic medical practitioners. [Loan principal and interest] Loans 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 [principal plus accrued interest] 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 [principal plus accrued interest] loan shall be forgiven. Upon completion of the second year of service, the remainder of the [principal plus accrued interest] loan shall be forgiven; and

(3) for loan terms of three years or more, forty percent of the [principal plus accrued interest] loan shall be forgiven upon completion of the first year of service in a designated health professional shortage area, thirty percent of the [principal plus accrued interest] loan shall be forgiven upon completion of the second year of service and the remainder of the [principal plus accrued interest] loan shall be forgiven upon completion of the third year of service.

F. 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.

G. If a loan recipient completes his professional education and does not serve in a health professional shortage area, the commission shall assess a penalty of up to [three] two times the principal due, plus [eighteen] seven 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 serve in a health professional shortage area in the state, the commission shall require immediate repayment of the unpaid principal amount of the loan plus accrued interest owed the state plus the amount of any penalty assessed pursuant to this section. The contract shall further provide that upon failure to provide service, interest shall be accrued from the date of the loan disbursement and shall be capitalized.

H. The commission shall adopt regulations to implement the provisions of this section. The regulations may provide for the repayment of osteopathic medical student loans in annual or other periodic installments."

Section 16. Section 21-22A-8 NMSA 1978 (being Laws 1978, Chapter 109, Section 8, as amended) is amended to read:

"21-22A-8. FUND CREATED--METHOD OF PAYMENT.--

A. There is created in the state treasury the "osteopathic medical student [loan for service] assistance program fund". All money appropriated for loans to osteopathic medical students under the Osteopathic Medical Student [Loan for] Service Program Act shall be credited to the fund. All payments of principal and interest on loans made pursuant to that act received by the commission shall be deposited with the state treasurer to the credit of the fund or shall be deposited with the commission's administrative agent. All payments of funds for loans shall be made upon vouchers signed by designated representatives of the commission.

B. The osteopathic medical student assistance program fund is a new name for the osteopathic medical student loan for service fund and is not a new fund created by this 2003 act. The purposes and balances of the osteopathic medical student loan for service fund as they existed before July 1, 2003 remain the purposes and balances of the osteopathic medical student assistance program fund."

Section 17. Section 21-22A-10 NMSA 1978 (being Laws 1978, Chapter 109, Section 10, as amended) is amended to read:

"21-22A-10. REPORTS.--The commission shall make annual reports to the governor and to the legislature, prior to each regular session, of its activities, the loans granted and the names and addresses of persons to whom loans were granted and the osteopathic medical schools or colleges or osteopathic physician's assistant programs attended by those receiving the loans, together with a list of the names and locations of practice of those students who have completed their education and have become licensed osteopathic physicians or osteopathic physician's assistants in New Mexico as a result of a student loan pursuant to the Osteopathic Medical Student [Loan for] Service Program Act."

Section 18. Section 21-22B-1 NMSA 1978 (being Laws 1987, Chapter 299, Section 1, as amended) is amended to read:

"21-22B-1. SHORT TITLE.--Chapter 21, Article 22B NMSA 1978 may be cited as the "Nursing Student [Loan for] Service Program Act"."

Section 19. Section 21-22B-2 NMSA 1978 (being Laws 1987, Chapter 299, Section 2, as amended) is amended to read:

"21-22B-2. PURPOSE.--The purpose of the Nursing Student [Loan for] Service Program Act is to meet the emergency currently existing resulting from the shortage of nurses in the underserved areas of the state by increasing the number of practitioners in rural areas through a program of loans for nursing students. The program will require as a condition of each loan that the student declare intent prior to the granting of the loan that the nurse will practice nursing within one of the areas of the state designated as an underserved area by the health profession advisory committee."

Section 20. Section 21-22B-3 NMSA 1978 (being Laws 1987, Chapter 299, Section 3, as amended) is amended to read:

"21-22B-3. DEFINITIONS.--As used in the Nursing Student [Loan for] Service Program Act:

A. "commission" means the commission on higher education;

B. "loan" means a grant of funds to defray the costs incidental to a nursing education, under a contract between the commission and a nursing student, requiring repayment with services or repayment with interest;

C. "student" means a resident of New Mexico who is a student enrolled in a program of nursing; and

D. "program of nursing" means a nursing education program in a New Mexico institution accredited by a member of the council on post-secondary accreditation or a nursing education program approved by the [New Mexico] board of nursing."

Section 21. Section 21-22B-6 NMSA 1978 (being Laws 1987, Chapter 299, Section 6, as amended) is amended to read:

"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 E of this section; and

(2)] seven percent per year [in all other cases].

C. 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, together with interest, over a period negotiated between the student and the commission after completion of a nursing program. [The contract shall further provide that immediately upon completion or termination of the student's nursing education, all interest then accrued shall be capitalized.]

D. Loans made to students who fail to complete their nursing education shall become due, together with interest, 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. The contract shall further provide that immediately upon termination of the student's nursing education, the loan shall bear interest at a rate of seven percent per year and shall be capitalized.

E. The contract shall provide that the commission may forgive a portion of the loan [principal and interest] for each year that a loan recipient practices nursing in areas approved by the health profession advisory committee. [Loan principal and interest] Loans 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 [principal plus accrued interest] 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 [principal plus accrued interest] loan shall be forgiven. Upon completion of the second year of service, the remainder of the [principal plus accrued interest] loan shall be forgiven; and

(3) for loan terms of three years or more, forty percent of the [principal plus accrued interest] loan shall be forgiven upon completion of the first year of service in a designated health professional shortage area, thirty percent of the [principal plus accrued interest] loan shall be forgiven upon completion of the second year of service and the remainder of the [principal plus accrued interest] loan shall be forgiven upon completion of the third year of service.

F. 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.

G. If a loan recipient completes his professional education and does not serve in a health professional shortage area, the commission shall assess a penalty of up to two times the principal due, plus seven 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 serve in a health professional shortage area in the state, the commission shall require immediate repayment of the unpaid principal amount of the loan plus accrued interest owed the state plus the amount of any penalty assessed pursuant to this section. The contract shall further provide that upon failure to provide service, interest shall be accrued from the date of the loan disbursement and shall be capitalized.

[G.] 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."

Section 22. Section 21-22B-8 NMSA 1978 (being Laws 1987, Chapter 299, Section 8, as amended) is amended to read:

"21-22B-8. FUND CREATED--METHOD OF PAYMENT.--

A. There is created in the state treasury the "nursing student [loan for] service program fund". All money appropriated for loans to nursing students under the Nursing Student [Loan for] Service Program Act shall be credited to the fund and all payments of principal and interest on loans made pursuant to that act received by the commission shall be deposited with the state treasurer for credit to the fund or shall be deposited with the commission's administrative agent. All payments for loans shall be made upon vouchers signed by the designated representatives of the commission.

B. The nursing student service program fund is a new name for the nursing student loan for service fund and is not a new fund created by this 2003 act. The purposes and balances of the nursing student loan for service fund as they existed before July 1, 2003 remain the purposes and balances of the nursing student service program fund."

Section 23. Section 21-22C-1 NMSA 1978 (being Laws 1994, Chapter 57, Section 3) is amended to read:

"21-22C-1. SHORT TITLE.--[Sections 3 through 12 of this act] Chapter 21, Article 22C NMSA 1978 may be cited as the "Allied Health Student [Loan for] Service Program Act"."

Section 24. Section 21-22C-2 NMSA 1978 (being Laws 1994, Chapter 57, Section 4, as amended) is amended to read:

"21-22C-2. PURPOSE.--The purpose of the Allied Health Student [Loan for] Service Program Act is to meet the emergency currently existing resulting from the shortage of allied health professionals in underserved areas of the state by increasing the number of practitioners in rural areas through a program of loans for allied health students. Each applicant shall declare his intent to practice his allied health profession within one of the areas of the state designated as an underserved area by the health profession advisory committee."

Section 25. Section 21-22C-3 NMSA 1978 (being Laws 1994, Chapter 57, Section 5, as amended) is amended to read:

"21-22C-3. DEFINITIONS.--As used in the Allied Health Student [Loan for] Service Program Act:

A. "allied health profession" means physical therapy, occupational therapy, speech-language pathology, audiology, pharmacy, nutrition, respiratory care, laboratory technology, radiologic technology, mental health services, emergency medical services or a licensed or certified health profession as defined by the commission;

B. "commission" means the commission on higher education;

C. "loan" means a grant of money to defray the costs incidental to an allied health profession education, under a contract between the commission and an allied health profession student, requiring repayment with services or repayment of principal and interest; and

D. "student" means a resident of New Mexico who is enrolled in an accredited program for one of the allied health professions."

Section 26. Section 21-22C-4 NMSA 1978 (being Laws 1994, Chapter 57, Section 6) is amended to read:

"21-22C-4. ALLIED HEALTH LOANS--QUALIFICATIONS.--

A. The commission may grant a loan to a student it deems qualified to receive the loan upon terms and conditions it determines pursuant to the provisions of the Allied Health Student [Loan for] Service Program Act and regulations adopted pursuant to that act.

B. The commission shall only receive, pass on and allow or disallow an application for a loan made by a student enrolled or accepted in an allied health profession program who is a bona fide citizen and resident of the United States and of New Mexico and who declares his intent to practice an allied health profession within a designated area of the state.

C. The commission shall make a full and careful investigation of the ability, character and qualifications of each applicant and determine fitness to become a recipient of a student loan. The investigation of each applicant shall include an investigation of the ability of the applicant and the applicant's parent or guardian to pay the applicant's expenses for an allied health profession education. The commission shall give preference to qualified applicants who are unable, or whose parents or guardians are unable, to pay the educational expenses.

D. The commission shall arrange for loan recipients to receive assistance in locating appropriate practice positions in designated underserved areas."

Section 27. Section 21-22C-5 NMSA 1978 (being Laws 1994, Chapter 57, Section 7) is amended to read:

"21-22C-5. DELEGATION OF DUTIES.--The commission may arrange with other agencies for the performance of services required by the provisions of the Allied Health Student [Loan for] Service Program Act."

Section 28. Section 21-22C-6 NMSA 1978 (being Laws 1994, Chapter 57, Section 8, as amended) is amended to read:

"21-22C-6. ALLIED HEALTH STUDENT LOANS--CONTRACT

TERMS--REPAYMENT.--

A. Prior to receiving a loan, each applicant approved for a loan shall file with the commission a declaration of intent to practice as a licensed allied health professional in areas of New Mexico designated as underserved.

B. The loans shall not exceed the necessary expenses incurred while attending an allied health profession program and shall bear interest at the rate of

[(1) eighteen percent per year if the student completes his allied health profession education and no portion of the principal and interest is forgiven pursuant to Subsection E of this section; and

(2)] seven percent per year [in all other cases].

C. 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 an allied health profession education and shall be conditioned on the repayment of the loan to the state, together with interest, over a period negotiated between the student and the commission after completion of an allied health profession education. [The contract shall further provide that immediately upon completion or termination of the student's allied health profession education, all interest then accrued shall be capitalized.]

D. Loans made to students who fail to complete their allied health profession education shall become due, together with interest, immediately upon termination of that education. The commission, in consultation with the student, shall establish repayment terms, alternate service or cancellation terms. The contract shall further provide that immediately upon termination of the loan recipient's education, the loan shall bear interest at a rate of seven percent per year and shall be capitalized.

E. The contract shall provide that the commission shall forgive a portion of the loan [principal and interest] for each year that a loan recipient practices an allied health profession in areas approved by the health profession advisory committee. [Loan principal and interest] Loans 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 [principal plus accrued interest] 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 [principal plus accrued interest] loan shall be forgiven. Upon completion of the second year of service, the remainder of the [principal plus accrued interest] loan shall be forgiven; and

(3) for loan terms of three years or more, forty percent of the [principal plus accrued interest] loan shall be forgiven upon completion of the first year of service, thirty percent of the [principal plus accrued interest] loan shall be forgiven upon completion of the second year of service and the remainder of the [principal plus accrued interest] loan shall be forgiven upon completion of the third year of service.

F. 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.

G. If a loan recipient completes his professional education and does not serve the required number of years in a health professional shortage area, the commission shall assess a penalty of up to [three] two times the principal due, plus [eighteen] seven 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 serve in a health professional shortage area in the state, the commission shall require immediate repayment of the unpaid principal amount of the loan plus accrued interest owed the state plus the amount of any penalty assessed pursuant to this subsection. The contract shall further provide that upon failure to provide service, interest shall be accrued from the date of the loan disbursement and shall be capitalized.

H. The commission shall adopt regulations to implement the provisions of this section. The regulations may provide for the repayment of allied health student loans in annual or other periodic installments."

Section 29. Section 21-22C-8 NMSA 1978 (being Laws 1994, Chapter 57, Section 10) is amended to read:

"21-22C-8. FUND CREATED--METHOD OF PAYMENT.--

A. The "allied health student [loan for service] assistance program fund" is created in the state treasury. All money appropriated for loans to allied health students pursuant to the provisions of the Allied Health Student [Loan for] Service Program Act shall be credited to the fund and all payments of principal and interest on loans made pursuant to that act received by the commission shall be credited to the fund or shall be deposited with the commission's administrative agent. All payments for loans shall be made upon vouchers signed by the designated representative of the commission.

B. The allied health student assistance program fund is a new name for the allied health student loan for service fund and is not a new fund created by this 2003 act. The purposes and balances of the allied health student loan for service fund as they existed before July 1, 2003 remain the purposes and balances of the allied health student assistance program fund."

Section 30. Section 21-22E-1 NMSA 1978 (being Laws 2001, Chapter 288, Section 1) is amended to read:

"21-22E-1. SHORT TITLE.--[This act] Chapter 21, Article 22E NMSA 1978 may be cited as the "Teacher [Loan for] Service Program Act"."

Section 31. Section 21-22E-2 NMSA 1978 (being Laws 2001, Chapter 288, Section 2) is amended to read:

"21-22E-2. PURPOSE.--The purpose of the Teacher [Loan for] Service Program Act is to proactively address New Mexico's looming teacher shortage by providing students with the financial means to complete or enhance their post-secondary teacher preparation education."

Section 32. Section 21-22E-3 NMSA 1978 (being Laws 2001, Chapter 288, Section 3) is amended to read:

"21-22E-3. DEFINITIONS.--As used in the Teacher [Loan for] Service Program Act:

A. "commission" means the commission on higher education;

B. "loan" means a payment of money under contract between the commission and a student that defrays the costs incidental to a teacher preparation program offered in a regionally accredited post-secondary educational institution in New Mexico and that requires repayment in services;

C. "student" means a United States citizen who is enrolled in or accepted by an undergraduate or graduate teacher preparation program at a regionally accredited post-secondary educational institution in New Mexico; and

D. "teacher preparation program" means [one] a program that has been formally approved as meeting the requirements of the [New Mexico] state board of education and that leads to initial licensure or to additional licensure endorsements."

Section 33. Section 21-22E-5 NMSA 1978 (being Laws 2001, Chapter 288, Section 5) is amended to read:

"21-22E-5. DELEGATION OF DUTIES TO OTHER STATE AGENCIES.--The commission may arrange with other agencies for the performance of services required by the provisions of Section [4 of the Teacher Loan for Service Act] 21-22E-4 NMSA 1978."

Section 34. Section 21-22E-6 NMSA 1978 (being Laws 2001, Chapter 288, Section 6) is amended to read:

"21-22E-6. TEACHER LOANS--CONTRACT TERMS--REPAYMENT.--

A. Each applicant who is approved for a loan by the commission may be granted a loan in such amounts and for such periods as the commission determines. The loan shall not exceed the necessary expenses incurred while attending a teacher preparation program.

B. A loan shall bear interest at the rate of

[(1) eighteen percent per year if the loan recipient completes his teacher preparation program and no portion of the principal and interest is forgiven pursuant to Subsection E of this section; or

(2)] seven percent per year [in all other cases].

C. The loan shall be evidenced by a contract between the loan recipient 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 teacher preparation program and shall be conditioned on the repayment of the loan to the state, together with interest, over a period established by the commission after the completion of the teacher preparation program and any postgraduate study or internship required to complete the loan recipient's education. [The contract shall further provide that immediately upon completion or termination of the loan recipient's education, all interest then accrued shall be capitalized.]

D. A loan made to a recipient who fails to complete his teacher preparation program shall become due, together with interest, immediately upon termination of his teacher preparation program. The commission, in consultation with the loan recipient, shall establish terms of repayment, alternate service or cancellation terms. The contract shall further provide that immediately upon termination of the loan recipient's education, the loan shall bear interest at a rate of seven percent per year and shall be capitalized.

E. The contract shall provide that the commission shall forgive a portion of the loan [principal and interest] for each year that the loan recipient practices his profession as a licensed teacher in New Mexico. [Loan principal and interest] Loans 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 [principal plus accrued interest] 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 [principal plus accrued interest] loan shall be forgiven. Upon completion of the second year of service, the remainder of the [principal plus accrued interest] loan shall be forgiven; and

(3) for loan terms of three years or more, forty percent of the [principal plus accrued interest] loan shall be forgiven upon completion of the first year of service, thirty percent of the [principal plus accrued interest] loan shall be forgiven upon completion of the second year of service and the remainder of the [principal plus accrued interest] loan shall be forgiven upon completion of the third year of service.

F. A loan recipient shall serve a complete contract year in order to receive credit for that year. The minimum credit for a year shall be established by the commission.

G. If a loan recipient completes his teacher preparation program and does not serve in a New Mexico public school, the commission shall assess a penalty of up to [three] two times the principal due, plus [eighteen] seven percent interest, unless the commission finds acceptable extenuating circumstances that prevent the loan recipient from serving. If the commission does not find acceptable extenuating circumstances for the loan recipient's failure to carry out his declared intent to serve, the commission shall require immediate repayment of the unpaid principal amount of the loan plus accrued interest owed the state plus the amount of any penalty assessed pursuant to this section. The contract shall further provide that upon failure to provide service, interest shall be accrued from the date of the loan disbursement and shall be capitalized.

H. The commission shall adopt and promulgate rules to implement the provisions of this section. The rules may provide for the repayment of loans in annual or other periodic installments."

Section 35. Section 21-22E-8 NMSA 1978 (being Laws 2001, Chapter 288, Section 8) is amended to read:

"21-22E-8. FUND CREATED--METHOD OF PAYMENT.--

A. The "teacher [loan for service] assistance program fund" is created in the state treasury. Money appropriated for loans pursuant to the Teacher [Loan for] Service Program Act; earnings from investment of the fund; gifts, grants and donations to the fund; and all payments of principal and interest on loans made pursuant to that act shall be deposited in the fund. Money in the fund shall not revert at the end of a fiscal year. The fund shall be administered by the commission. All payments of money for loans shall be made on warrants drawn by the secretary of finance and administration pursuant to vouchers signed by the commission's designated representative.

B. The teacher assistance program fund is a new name for the teacher loan for service fund and is not a new fund created by this 2003 act. The purposes and balances of the teacher loan for service fund as they existed before July 1, 2003 remain the purposes and balances of the teacher assistance program fund."

Section 36. Section 21-22E-10 NMSA 1978 (being Laws 2001, Chapter 288, Section 10) is amended to read:

"21-22E-10. REPORTS.--The commission shall report annually by January 1 to the governor and the legislature on its activities pursuant to the Teacher [Loan for] Service Program Act, including the loans granted, the names and addresses of loan recipients, the teacher preparation programs loan recipients are attending and the names and locations of practice of loan recipients who have completed their teacher preparation education and are teaching."

Section 37. Section 21-29-3 NMSA 1978 (being Laws 1997, Chapter 126, Section 3) is amended to read:

"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 on 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 E of this section; and

(b)] seven percent per year [in all other cases].

C. 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, together with interest, over a period established by the commission. [The contract shall provide further that immediately upon completion or termination of the student's education, all interest then accrued shall be capitalized.]

D. Loans made to a student who fails to complete his education shall become due, together with interest, immediately upon termination of his education. The commission shall establish terms of repayment, alternate service or cancellation terms. The loan contract shall provide that, immediately upon termination of the student's education, the loan shall bear interest at a rate of seven percent per year and shall be capitalized.

E. The contract shall provide that the commission shall forgive a portion of the loan [principal and interest] for each year that a loan recipient practices his profession in New Mexico. [Loan principal and interest] Loans 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 [principal plus accrued interest] 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 [principal plus accrued interest] loan shall be forgiven; upon completion of the second year of service, the remainder of the [principal plus accrued interest] loan shall be forgiven;

(3) for loan terms of three years or more, forty percent of the [principal plus accrued interest] loan shall be forgiven upon completion of the first year of service, thirty percent of the [principal plus accrued interest] loan shall be forgiven upon completion of the second year of service and the remainder of the [principal plus accrued interest] 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.

F. 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.

G. 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] two times the principal due, plus [eighteen] seven 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 unpaid principal amount of the loan plus accrued interest owed the state plus the amount of any penalty assessed pursuant to this subsection. The loan contract shall provide that, upon failure to provide service, interest shall accrue from the date of the loan disbursement and shall be capitalized.

H. The commission may provide by regulation for the repayment of student exchange program loans in annual or other periodic installments."

Section 38. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2003.