NM Stat § 21-22-6 (2021)
2021 New Mexico Statutes|Chapter 21 - State and Private Education Institutions|Article 22 - Medical Student Loans|Section 21-22-6 - Medical student loans; contract terms; repayment.

A. Each applicant who is approved for a loan by the commission [department] may be granted a loan, in such amounts and for such periods as determined by the commission [department], 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 [department] 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 F of this section; and (2) seven percent per year in all other cases. C. Loans made pursuant to the Medical Student Loan for Service Act shall not accrue interest until: (1) the commission [department] determines the loan recipient has terminated the recipient's medical education prior to completion; (2) the commission [department] determines the loan recipient has failed to fulfill the recipient's obligation to serve in a health professional shortage area; or (3) the commission [department] cancels a contract between a student and the commission [department] pursuant to Section 21-22-9 NMSA 1978. D. The loan shall be evidenced by a contract between the student and the commission [department] 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 over a period established by the commission [department] in consultation with the student after completion of medical school and any period of internship or residency required to complete the student's education. E. Loans made to students who fail to complete their medical education shall become due immediately upon termination of their medical education. The commission [department], in consultation with the student, shall establish terms of repayment, alternate service or cancellation terms. F. The contract shall provide that the commission [department] shall forgive a portion of the loan for each year that a loan recipient practices his profession as a licensed physician or physician assistant in areas approved by the commission [department] as not being adequately served by medical practitioners. 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 [department]. H. If a loan recipient completes his professional education and does not serve in a health professional shortage area, the commission [department] shall assess a penalty of up to three times the principal due, plus eighteen percent interest, unless the commission [department] finds acceptable extenuating circumstances for why the student cannot serve. If the commission [department] 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 [department] shall require immediate repayment of the loan plus the amount of any interest and penalty assessed pursuant to this subsection. I. The commission [department] 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. History: 1953 Comp., § 73-38A-6, enacted by Laws 1975, ch. 244, § 6; 1982, ch. 34, § 4; 1991, ch. 262, § 32; 1994, ch. 57, § 1; 1995, ch. 144, § 3; 2005, ch. 321, § 2; 2005, ch 323, § 1. ANNOTATIONSBracketed material. — The bracketed material was inserted by the compiler and is not part of the law. For designation of the commission on higher education as the higher education department, see 9-25-4.1 NMSA 1978. 2005 Multiple Amendments. — Laws 2005, ch. 321, § 2 and Laws 2005, ch. 323, § 1 enacted different amendments to this section that can be reconciled. Pursuant to 12-1-8 NMSA 1978, Laws 2005, ch. 323, § 1, as the last act signed by the governor, is set out above and incorporates both amendments. The amendments enacted by Laws 2005, ch. 321, § 2 and Laws 2005, ch. 323, § 1 are described below. To view the session laws in their entirety, see the 2005 session laws on NMOneSource.com. Laws 2005, ch. 323, § 1, effective June 17, 2005, added Subsections C(1) through (3); deleted former references to repayment of the loan "together with interest" and loan "principal and interest"; in Subsection D, deleted the former provision which provided that the contract shall provide that immediately upon completion or termination of the student's medical education, all interest then accrued shall be capitalized; changed "principal plus accrued interest" to "loan"; and in Subsection H, provided that if the commission does not find acceptable circumstances for a student's failure to serve in a health professional shortage area, the commission shall require repayment of the loan plus the amount of any interest. Laws 2005, ch. 321, § 2, effective June 17, 2005, in Subsection E, changed "health professional advisory committee" to "commission". The 1995 amendment, effective July 1, 1995, in Subsection E, substituted "health profession advisory committee" for "New Mexico medical shortage area committee", substituted Paragraphs (1) to (3) for a formula forgiving forty percent of the principal in the first year and thirty percent in the second and third years, regardless of the loan term, and made a stylistic change; redesignated the last two sentences of Subsection E as Subsection F; redesignated former Subsections F and G as Subsections G and H; and substituted "health professional shortage" for "medical shortage" in two places in Subsection G. The 1994 amendment, effective July 1, 1994, substituted "if the applicant" for "providing the applicant" in Subsection A and "shall" for "may" in the first two sentences in Subsection E, added present Subsection F, and redesignated former Subsection F as present Subsection G. The 1991 amendment, effective June 14, 1991, substituted "commission" for "board" throughout the section; inserted "or physician assistant" near the end of Subsection A and in the first sentence in Subsection E; in Subsection C, substituted "established by the commission in consultation with the student" for "not to exceed four years, negotiated between the student and the state" in the first sentence and added the final sentence; rewrote the second sentence in Subsection D which read "These students shall negotiate with the state a term of repayment not to exceed four years"; in Subsection E, rewrote the formula in the second sentence which read "forty percent for the first year served, thirty percent for the second year and thirty percent for the third year" and substituted "established by the commission" for "six thousand dollars ($6,000) in principal plus accrued interest" at the end of the final sentence; and made minor stylistic changes throughout the section. Am. Jur. 2d, A.L.R. and C.J.S. references. — Constitutionality of statute authorizing state to loan money or engage in business of a private nature, 14 A.L.R. 1151, 115 A.L.R. 1456. 81A C.J.S. States §§ 155, 208, 225.