New Mexico Administrative Code
Title 5 - POST-SECONDARY EDUCATION
Chapter 7 - TUITION AND FINANCIAL AID
Part 28 - NEW MEXICO EDUCATIONAL ASSISTANCE FOUNDATION ALTERNATIVE LOAN FUND PROGRAM REGULATIONS OF THE SELF-INSURANCE PROGRAM
Section 5.7.28.9 - THE SELF-INSURANCE PROGRAM

Universal Citation: 5 NM Admin Code 5.7.28.9

Current through Register Vol. 35, No. 18, September 24, 2024

A. Loan Insurance Fund: The NMEAF shall establish, under the trust indenture and any supplemental trust indenture relating to the issuance of bonds under the act to finance the program (the "indenture") a loan insurance fund into which shall be deposited, at the election of the NMEAF or as required by the terms of any indenture, NMEAF funds (which may be derived from bond proceeds if permitted by the indenture) and insurance premiums collected from the borrower or netted from the proceeds of the student loan made to a borrower under the program. The loan insurance fund, to the extent of moneys available therein, shall be used to pay the unpaid principal balance and accrued and unpaid interest thereon (the "claim amount") with respect to any student loan made under the program upon the happening of any of the following events:

(1) if after 18 months in litigation against the borrower and any co-signer, the borrower has not resumed making regularly scheduled payments;

(2) if the NMEAF determines that litigation is inappropriate with regard to a specific student loan, after the student loan has been delinquent for a period of 150 days;

(3) the debt is discharged as a result of the bankruptcy of the borrower and/or the co-signer.

B. Insurance Premium: A nonrefundable premium equal to five percent of the principal amount of any student loan made under the program will be paid into the loan insurance fund at the time of origination of the student loan.

C. Certificate of Insurance. A certificate of insurance, in the form attached as Appendix A [now 5.7.28.11 NMAC], will be delivered to the trustee acting under any indenture at the time of initial disbursement of any student loan under the program.

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