Current through Register Vol. 35, No. 18, September 24, 2024
A. Program
purpose: The New Mexico alternative loan fund program (NMALF) is an alternative
loan program designed to supplement the educational financing needs of New
Mexico students attending eligible schools, or out of state students attending
New Mexico eligible schools, and their parents. The loan funds are intended to
pay for the estimated cost of attendance at eligible schools not met by
estimated financial assistance.
B.
Participants in the NMALF: Participants in the NMALF include:
(1) lender which provides the funds for the
loan and manages and operates the NMALF program;
(2) students, borrowers, and credit-worthy
individuals borrowing to assist students attending eligible schools;
(3) eligible schools.
C. Repayment:
(1) The borrower and/or cosigner under the
NMALF program are obligated to repay the lender the full amount borrowed, plus
interest, late fees, and collection costs, if any. Interest begins to accrue on
the day the loan is disbursed. The first payment of principal and interest is
due within 60 days of the date the loan is disbursed. The lender may schedule
the first payment to the first calendar day of the following month. The
repayment period is set forth in Paragraph 1-18 [now Subsection R. of 5.7.27.7
NMAC].
(2) If the borrower is also
the student, he/she has the choice to make interest only payments while in
school, for up to four consecutive years. The interest only payments begin
sixty days after the date of disbursement. The lender may schedule the first
payment to the first calendar day of the following month. Payment of principal
and interest begin sixty days after the student is no longer enrolled on at
least a half-time basis at an eligible school, or at the end of the fourth
year. If the student returns to school, he/she will still be obligated to make
principal and interest payments as the interest only option is only available
during the original in-school period.
(3) If the student to whom or on whose behalf
the loan was made has not been or will not be enrolled or attending an eligible
school after the loan is disbursed, the outstanding loan balance may be
accelerated with the total amount of interest and principal being immediately
due and payable.
(4) The obligation
to repay the loan will not be cancelled in the event of the borrower's and/or
the cosigner's death or total and permanent disability. The borrower, the
borrower's estate, the cosigner, the cosigner's estate remain liable on the
loan.
D. Interest rate:
Each promissory note will bear a fixed or variable rate of interest to be
established by the lender from time to time, and as otherwise set forth in the
promissory note.
E. Fee payable
upon origination. The lender will charge the borrower a five percent fee
payable upon origination as a condition of making the loan. This fee will be
paid out of the loan proceeds.
