New Mexico Statutes 21-22A-6. Osteopathic medical student loans; contract terms;
repayment.
Terms Used In New Mexico Statutes 21-22A-6
- Contract: A legal written agreement that becomes binding when signed.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
A. Each applicant who is approved for a loan by the department may be granted a loan, in such amounts and for such periods as determined by the department, with which to defray expenses incurred in obtaining an osteopathic medical education at an accredited osteopathic medical school in New Mexico if the applicant files with the department a declaration of intent to practice as a licensed osteopathic physician or osteopathic physician’s assistant in a health professional shortage area.
B. The loan shall not exceed the necessary expenses incurred while attending a New Mexico 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 loan recipient completes an osteopathic 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 Osteopathic Medical Student Loan for Service Act shall not accrue interest until the department:
(1) determines the loan recipient has terminated the recipient’s osteopathic medical education prior to completion;
(2) determines the loan recipient has failed to fulfill the recipient’s obligation to serve in a health professional shortage area; or
(3) cancels a contract between a loan recipient and the department pursuant to Section 21-22A-9 N.M. Stat. Ann..
D. The loan shall be evidenced by a contract between the loan recipient and the 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 osteopathic medical education and shall be conditioned upon the repayment of the loan to the state over a period established by the department in consultation with the loan recipient 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 loan recipient’s education.
E. Loans made to loan recipients who fail to complete their osteopathic medical education shall become due immediately upon termination of their osteopathic medical education. The department, in consultation with the loan recipient, shall establish terms of repayment, alternate service or cancellation terms.
F. The contract shall provide that the department shall forgive a portion of the loan for each year that a loan recipient practices as a licensed osteopathic physician or osteopathic physician’s assistant in a health professional shortage area and shall require a period of four years of service in exchange for the loan. Ten percent of the loan shall be forgiven upon completion of the first year of service, twenty percent of the loan shall be forgiven upon completion of the second year of service, thirty percent of the loan shall be forgiven upon completion of the third year of service and the remainder of the loan shall be forgiven upon completion of the fourth year of service.
G. 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 department.
H. If a loan recipient completes a professional education and does not meet all requirements of this section, the department shall assess a penalty of up to three times the principal due, plus eighteen percent interest, unless the department finds acceptable extenuating circumstances for why the requirements should be waived. If the department does not find acceptable extenuating circumstances for the loan recipient’s failure to meet the requirements of this section, the department shall require immediate repayment of the loan plus the amount of any interest and penalty assessed pursuant to this section.
I. The department shall adopt rules to implement the provisions of this section. The rules may provide for the repayment of osteopathic medical student loans in annual or other periodic installments.