0001| AN ACT | 0002| RELATING TO EDUCATION; CHANGING THE STUDENT EXCHANGE PROGRAM OF | 0003| THE WESTERN INTERSTATE COMMISSION ON HIGHER EDUCATION FROM A | 0004| GRANT PROGRAM TO A LOAN FOR SERVICE PROGRAM; PROVIDING FOR | 0005| CONTRACTS; CREATING A FUND; MAKING APPROPRIATIONS. | 0006| | 0007| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0008| Section 1. SHORT TITLE.--This act may be cited as the "WICHE Loan for Service Act". | 0009| Section 2. DEFINITIONS.--As used in the WICHE Loan for Service Act: | 0010| A. "commission" means the commission on higher education; and | 0011| B. "student" means a New Mexico resident who is a graduate of a New Mexico | 0012| high school and who attends or is about to attend a graduate or professional program of education | 0013| through the auspices of the Compact for Western Regional Cooperation in Higher Education. | 0014| Section 3. STUDENT EXCHANGE PROGRAM--TERMS OF STUDENT LOANS-- | 0015| PAYBACK REQUIREMENTS.-- | 0016| A. Financial assistance by the state for the student exchange program of the | 0017| western interstate commission on higher education shall be through a loan program established | 0018| pursuant to this section. | 0019| B. A student may receive a loan of tuition assistance on the following terms: | 0020| (1) the loan shall not exceed an amount equivalent to the negotiated | 0021| support fee for the graduate or professional program; and | 0022| (2) the loan shall bear interest at the rate of: | 0023| (a) eighteen percent per year if the student completes his education | 0024| and no portion of the principal and interest is forgiven pursuant to Subsection E of this section; | 0025| and | 0001| (b) seven percent per year in all other cases. | 0002| C. The loan shall be evidenced by a contract between the student and the | 0003| commission acting on behalf of the state. The contract shall provide for the payment by the state | 0004| of a stated sum covering the cost of tuition assistance and shall be conditioned on the repayment | 0005| of the loan to the state, together with interest, over a period established by the commission. The | 0006| contract shall provide further that immediately upon completion or termination of the student's | 0007| education, all interest then accrued shall be capitalized. | 0008| D. Loans made to a student who fails to complete his education shall become | 0009| due, together with interest, immediately upon termination of his education. The commission | 0010| shall establish terms of repayment, alternate service or cancellation terms. | 0011| E. The contract shall provide that the commission shall forgive a portion of the | 0012| loan principal and interest for each year that a loan recipient practices his profession in New | 0013| Mexico. Loan principal and interest shall be forgiven as follows: | 0014| (1) loan terms of one year shall require one year of practice for each year | 0015| of the loan. Upon completion of service, one hundred percent of the principal plus accrued | 0016| interest shall be forgiven; | 0017| (2) loan terms of two years shall require one year of practice for each year | 0018| of the loan. Upon completion of the first year of service, fifty percent of the principal plus | 0019| accrued interest shall be forgiven; upon completion of the second year of service, the remainder | 0020| of the principal plus accrued interest shall be forgiven; | 0021| (3) for loan terms of three years or more, forty percent of the principal | 0022| plus accrued interest shall be forgiven upon completion of the first year of service, thirty percent | 0023| of the principal plus accrued interest shall be forgiven upon completion of the second year of | 0024| service and the remainder of the principal plus accrued interest shall be forgiven upon | 0025| completion of the third year of service; and | 0001| (4) the commission may establish other forgiveness terms for | 0002| professionals providing service in serious shortage areas. | 0003| F. Loan recipients shall serve a complete year in order to receive credit for that | 0004| year. The minimum credit for a year shall be established by the commission. | 0005| G. If a student completes his professional education and does not return to New | 0006| Mexico to practice his profession, the commission shall assess a penalty of up to three times the | 0007| principal due, plus eighteen percent interest, unless the commission finds acceptable extenuating | 0008| circumstances for why the student cannot serve. If the commission does not find acceptable | 0009| extenuating circumstances for the student's failure to carry out his declared intent to practice his | 0010| profession in New Mexico, the commission shall require immediate repayment of the unpaid | 0011| principal amount of the loan plus accrued interest owed the state plus the amount of any penalty | 0012| assessed pursuant to this subsection. | 0013| H. The commission may provide by regulation for the repayment of student | 0014| exchange program loans in annual or other periodic installments. | 0015| Section 4. COMMISSION POWERS AND DUTIES--CONTRACTS.-- | 0016| A. The commission may: | 0017| (1) arrange with other agencies for the performance of services required | 0018| by the provisions of Section 3 of the WICHE Loan for Service Act; | 0019| (2) sue in its own name for any balance due the state from a student on a | 0020| contract; | 0021| (3) cancel a contract made between it and a student for a reasonable cause | 0022| deemed sufficient by the commission; and | 0023| (4) adopt regulations to implement the provisions of the WICHE Loan for | 0024| Service Act. | 0025| B. The commission shall make an annual report to the governor and the | 0001| legislature prior to the regular session of its activities pursuant to the WICHE Loan for Service | 0002| Act, including loans granted and paid back or fulfilled through the practice of a profession in | 0003| New Mexico; a list of the schools or colleges attended by those receiving loans; and any other | 0004| information the commission deems pertinent. | 0005| C. The general form of the contract provided for in Section 3 of the WICHE Loan | 0006| for Service Act shall be prepared and approved by the attorney general and signed by the student | 0007| and a designee of the commission on behalf of the state. | 0008| Section 5. FUND CREATED--METHOD OF PAYMENT.--The "WICHE loan for | 0009| service fund" is created in the state treasury. All money appropriated for loans to students | 0010| participating in the student exchange program of the western interstate commission on higher | 0011| education shall be credited to the fund. All payments of principal and interest on loans made | 0012| pursuant to the WICHE Loan for Service Act shall be credited to the fund. All payments of | 0013| money for loans shall be made upon vouchers signed by the designated representative of the | 0014| commission and warrants drawn by the secretary of finance and administration. | 0015| For the 1997-98 fiscal year, seventy thousand dollars ($70,000) is appropriated from the | 0016| nursing-loan-for-service fund to the commission on higher education from collections generated | 0017| in excess of the amount received and budgeted for the 1997-98 fiscal year. This appropriation | 0018| shall be used to support the operation and administration of the program, including paying | 0019| support fees for students currently enrolled in the WICHE program. | 0020| Section 6. CANCELLATION.--The commission may cancel a contract with a student for | 0021| reasonable cause deemed sufficient by the commission. | 0022| Section 7. APPROPRIATION.--Four hundred thousand dollars ($400,000) is | 0023| appropriated from the general fund to the board of regents of the university of New Mexico for | 0024| expenditure in fiscal year 1998 to supplement funding of the student exchange program of the | 0025| western interstate commission on higher education. | 0001| Section 8. APPLICABILITY.--The WICHE Loan for Service Act applies to contracts | 0002| entered into with students on or after the effective date of that act. | 0003| Section 9. EFFECTIVE DATE.--The effective date of the provisions of this act is | 0004| July 1, 1997. |