New Mexico Statutes 21-22E-6. Teacher 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 the commission [department] determines. The loan shall not exceed the necessary expenses incurred while attending a teacher preparation program.
Terms Used In New Mexico Statutes 21-22E-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.
B. A loan shall bear interest at the rate of:
(1) eighteen percent per year if the loan recipient completes his teacher preparation program and no portion of the principal and interest is forgiven pursuant to Subsection F of this section; or
(2) seven percent per year in all other cases.
C. Loans made pursuant to the Teacher Loan for Service Act shall not accrue interest until:
(1) the commission [department] determines the loan recipient has terminated the recipient’s teacher preparation program prior to completion;
(2) the commission [department] determines the loan recipient has failed to fulfill the recipient’s obligation to practice as a licensed teacher in New Mexico; or
(3) the commission [department] cancels a contract between a student and the commission [department] pursuant to Section 21-22E-9 N.M. Stat. Ann..
D. The loan shall be evidenced by a contract between the loan recipient 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 teacher preparation program and shall be conditioned on the repayment of the loan to the state over a period established by the commission [department] after the completion of the teacher preparation program and any postgraduate study or internship required to complete the loan recipient’s education.
E. A loan made to a recipient who fails to complete his teacher preparation program shall become due immediately upon termination of his teacher preparation program.
The commission [department], in consultation with the loan recipient, 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 the loan recipient practices his profession as a licensed teacher in New Mexico. The loan shall be forgiven as follows:
(1) loan terms of one year shall require one year of practice. 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 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. A loan recipient shall serve a complete contract 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 teacher preparation program and does not serve in a New Mexico public school, 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 that prevent the loan recipient from serving. If the commission [department] does not find acceptable extenuating circumstances for the loan recipient’s failure to carry out his declared intent to serve, the commission [department] shall require immediate repayment of the loan plus the amount of any interest and penalty assessed pursuant to this section.
I. The commission [department] shall adopt and promulgate rules to implement the provisions of this section. The rules may provide for the repayment of loans in annual or other periodic installments.