HOUSE BILL 447
56th legislature - STATE OF NEW MEXICO - first session, 2023
Art De La Cruz
RELATING TO HIGHER EDUCATION; ENACTING THE GRADUATE STUDENT LOAN ACT; PROVIDING DEFINITIONS; PROVIDING FOR STUDENT LOANS FOR CERTAIN GRADUATE STUDENTS; PROVIDING LOAN TERMS; CREATING THE GRADUATE STUDENT LOAN FUND; REQUIRING REPORTS; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Graduate Student Loan Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Graduate Student Loan Act:
A. "department" means the higher education department;
B. "fund" means the graduate student loan fund;
C. "loan" means a disbursement of funds to defray the costs incidental to a graduate level education, under a contract between the department and a student, requiring repayment with interest;
D. "loan program" means the graduate student loan program; and
E. "student" means a resident of New Mexico who is a student enrolled in a post-baccalaureate-level course of study at an institution of higher education that is located within the state."
SECTION 3. [NEW MATERIAL] GRADUATE STUDENT LOAN PROGRAM--LOANS--TERMS.--
A. The "graduate student loan program" is created and shall be administered by the department. The department shall:
(1) promulgate rules for implementing the loan program in accordance with the Graduate Student Loan Act;
(2) publicize the loan program to students and prospective students, including those nearing completion of a baccalaureate-level course of study;
(3) collect and manage repayment of loans;
(4) solicit and accept funds for the loan program, including grants and donations; and
(5) award loans subject to the provisions of the Graduate Student Loan Act.
B. A loan made pursuant to the loan program shall be evidenced by a contract between the student and the department. The contract shall provide for the repayment of a loan and shall include terms for the potential discharge of a loan in the event of the bankruptcy, death, default or total and permanent disability of the student borrower. A loan shall:
(1) be in an amount determined by the department subject to available funding; provided that the amount shall not be for more than the cost of attendance as calculated by the institution for the student;
(2) include a rate interest of two percent per year; provided that interest shall not begin to accrue until after the student completes or discontinues the student's course of study;
(3) require that a loan recipient annually certify to the department that the loan recipient is employed in the state of New Mexico and, in the event that the loan recipient is unable or fails to certify, the outstanding balance of principal of and interest on the loan shall become due;
(4) be for a period of repayment of not more than ten years, commencing six months from the date the student completes or discontinues the student's course of study; and
(5) include any other terms as required by department rule.
SECTION 4. [NEW MATERIAL] OUT-OF-STATE MEDICAL STUDENTS--LOAN REFINANCING--TERMS.--If a student attended an out-of-state medical school and is currently providing medical services in New Mexico, the student shall be eligible to refinance an existing out-of-state medical school loan through the department with the same loan terms as otherwise provided in the Graduate Student Loan Act; provided that the loan recipient shall annually certify to the department that the loan recipient is employed in the state of New Mexico to provide medical services. If the loan recipient is unable or fails to certify, the outstanding balance of principal of and interest on the loan shall become due.
SECTION 5. [NEW MATERIAL] CONTRACT FOR SERVICES.--The department may contract with another public or private entity to assist the department with administering, making and collecting repayment on loans made pursuant to the loan program.
SECTION 6. [NEW MATERIAL] GRADUATE STUDENT LOAN FUND.--The "graduate student loan fund" is created in the state treasury. The fund consists of appropriations, distributions, transfers, gifts, grants, donations, bequests, fees collected, payments of principal and interest on loans made pursuant to the loan program and any other money distributed or otherwise allocated to the fund. Balances in the fund at the end of a fiscal year shall not revert to the general fund. Money in the fund is appropriated to the department to carry out and to administer the provisions of the Graduate Student Loan Act. All payments made from the fund shall be made on warrant of the secretary of finance and administration pursuant to vouchers signed by the secretary of higher education or the secretary's designee.
SECTION 7. [NEW MATERIAL] REPORTS.--The department shall make annual reports to the governor and to the legislature, prior to each regular session, on loans disbursed, information on the repayment of loans and degrees earned as a result of the loan program.
SECTION 8. APPROPRIATION.--Fifteen million dollars ($15,000,000) is appropriated from the general fund to the graduate student loan fund for expenditure in fiscal year 2024 and subsequent fiscal years to carry out and administer the provisions of the Graduate Student Loan Act. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.
SECTION 9. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2023.
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