The "Student Loan Bill of Rights Act" establishes a comprehensive regulatory framework for student loan servicers in New Mexico, requiring them to obtain a license from the Financial Institutions Division. The bill outlines the responsibilities of servicers, including the obligation to offer alternative repayment options, provide rights for cosigners, and ensure the discharge of private education loans in cases of permanent disability. It also introduces a student loan ombud position to assist borrowers and a Student Loan Bill of Rights Fund to support enforcement efforts. The act defines violations as unfair trade practices, allowing for private legal action and judicial enforcement, while also detailing the licensing process and compliance requirements for servicers.

Additionally, the bill mandates that servicers respond to borrower inquiries within specified timeframes and allocate payments in the borrower's best interest. It prohibits deceptive practices and ensures that cosigners have access to relevant loan documents and are released from obligations upon notification of total and permanent disability. The legislation emphasizes compliance with federal laws and allows the director to monitor the student loan market, impose penalties for violations, and seek judicial enforcement. The provisions will take effect on January 1, 2026, and apply to private education loans issued from that date forward.

Statutes affected:
introduced version: 57-12-2