There is created in the state treasury the “student loan fund”. The state treasurer may use the student loan fund to:

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A. purchase, from the fiscal agent, loans guaranteed by the United States made to qualified students at participating institutions; and

B. purchase from lending agencies located in New Mexico student loan notes guaranteed by the United States made to qualified students who at the time of the loan were attending participating institutions and who are currently attending participating institutions and who are also borrowers from the student loan fund. The fiscal agent and the state board of educational finance [commission on higher education [higher education department]] shall approve the purchase of student loan notes. The purchased student loan notes shall be delivered to the state treasurer as collateral for the student loan fund.