Section 21-22C-6 - Allied health student loans; contract terms; repaymentA. Prior to receiving a loan, each applicant approved for a loan shall file with the commission [department] 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 F of this section; and(2) seven percent per year in all other cases.C. Loans made pursuant to the Allied Health Student Loan for Service Act shall not accrue interest until:(1) the commission [department] determines the loan recipient has terminated the recipient's allied health profession education prior to completion;(2) the commission [department] determines the loan recipient has failed to fulfill the recipient's obligation to practice as a licensed allied health professional in areas of New Mexico designated as underserved; or(3) the commission [department] cancels a contract between a student and the commission [department] pursuant to Section 21-22C-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 an allied health profession education and shall be conditioned on the repayment of the loan to the state over a period negotiated between the student and the commission [department] after completion of an allied health profession education.E. Loans made to students who fail to complete their allied health profession education shall become due immediately upon termination of that education. The commission [department], in consultation with the student, shall establish repayment terms, 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 an allied health profession in areas approved by the commission [department]. 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, 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 the required number of years 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 allied health student loans in annual or other periodic installments.Laws 1994, ch. 57, § 8; 1995, ch. 144, § 14; 2005, ch. 321, § 9; 2005, ch. 323, § 4.