Notes to SEFA
The New Mexico Educational Assistance Foundation (NMEAF) dba New Mexico Student Loans was organized under the laws of the State of New Mexico on July 1, 1981, as a quasi-governmental, not-for-profit organization for the purpose of improving the educational opportunities of the residents of New Mexico and students who attend New Mexico post-secondary educational institutions. NMEAF’s primary purpose is to provide a program for making, financing, holding and purchasing federally insured educational loans. NMEAF also services loans and provides administrative support and other services for in-state educational and lending institutions; federal financial aid programs; and the New Mexico Student Loan Guarantee Corporation (NMSLGC), a not-for-profit entity designated to operate as a guarantee agency under the Federal Family Education Loan Program (FFELP).
a. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards includes all federal assistance to NMEAF that had activity during fiscal year 2025. This schedule has been prepared on the accrual basis of accounting. Revenues are recorded for financial reporting purposes when NMEAF has met the qualifications of the respective program. The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant activity of NMEAF under programs of the federal government for the year ended June 30, 2025. The information in this Schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Uniform Guidance. Because the Schedule presents only a selected portion of the operations of NMEAF, it is not intended to and does not present the financial positions, changes in financial position or cash flows of NMEAF. b. Federal Financial Assistance NMEAF receives interest subsidies on behalf of eligible students during qualified periods and special allowance on all qualifying loans. To receive payments of interest subsidies and special allowance, NMEAF must submit quarterly reports to the U.S. Department of Education. The Foundation provided services under the Rural Post-Secondary & Economic Development Grant, a four-year grant that started October 1, 2024, during the year. The purpose of this grant is to promote continuing education and completion rates in certain smaller rural areas in the state serviced by Eastern New Mexico University, Ruidoso. Due to inclement weather the revenues for this grant were budgeted at $610 thousand in fiscal year 2025 and only $88 thousand was spent. The Foundation is requesting from the Department of Education that the budget shortfall from fiscal year 2025 be moved to fiscal year 2026.
The U.S. Government pays NMEAF interest on eligible Stafford loans from the date of acquisition until the end of the grace period. In addition, for certain eligible loans, a special allowance is paid at the end of each quarter, which represents supplemental interest on outstanding insured loans. The special allowance is calculated using an annual rate, which is determined periodically and is based on the average interest rate for 91-day U.S. Treasury Bills, or the average 3-month commercial paper rate. Effective April 1, 2012, the Foundation elected to waive the 3-month commercial paper rate in favor of the 1-month LIBOR rate. At the beginning of fiscal year 2024, LIBOR was no longer an available rate for FFELP servicers and all servicers were transitioned to the 30-day Secured Overnight Financing Rate (SOFR) with a .11448 percent spread. Student loan notes originated or purchased by NMEAF have been guaranteed by the NMSLGC and reinsured by the U.S. government, provided applicable program requirements have been met by the original lender or NMEAF with respect to such loans. Guaranteed Student Loans Receivable, under Federal Family Education Loan Program is $131,927,012 at June 30, 2025. NMEAF did not originate any loans under Federal Family Education Loan Program during the fiscal year Ended June 30, 2025. The Foundation has elected to use the de Minimis indirect cost rate allowed under the Uniform Guidance with the Rural Post-Secondary Education grant.