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 and to provide rights for cosigners, such as access to loan information and the possibility of cosigner release. It also introduces protections for borrowers, including provisions for the discharge of private education loans in cases of permanent disability and restrictions on certain acceleration practices. The act defines key terms related to student loans and details the licensing process, including application requirements and exemptions for certain entities.

Additionally, the bill creates the position of a Student Loan Ombud and establishes the Student Loan Bill of Rights Fund to support enforcement efforts. It defines violations of the act as unfair trade practices, allowing for judicial enforcement and penalties. The legislation mandates that servicers respond to borrower inquiries within specified timeframes and prohibits deceptive practices, ensuring transparency and fair treatment for borrowers and cosigners. The bill also emphasizes compliance with federal laws and allows individuals harmed by noncompliance to pursue legal action. 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