senate Bill S7791

Establishes the New York student affordable refinancing for tomorrow program (New START)

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
view actions

actions

  • 09 / Jun / 2014
    • REFERRED TO HIGHER EDUCATION
  • 11 / Jun / 2014
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 11 / Jun / 2014
    • ORDERED TO THIRD READING CAL.1360
  • 12 / Jun / 2014
    • PASSED SENATE
  • 12 / Jun / 2014
    • DELIVERED TO ASSEMBLY
  • 12 / Jun / 2014
    • REFERRED TO HIGHER EDUCATION

Summary

Establishes the New York student affordable refinancing for tomorrow program (New START).

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Bill Details

Versions:
S7791
Legislative Cycle:
2013-2014
Current Committee:
Assembly Higher Education
Law Section:
Education Law
Laws Affected:
Add Art 14 Part VI §§694-c - 694-g, Ed L; add §99-w, St Fin L

Sponsor Memo

BILL NUMBER:S7791

TITLE OF BILL: An act to amend the education law and the state finance
law, in relation to establishing the New York student affordable refi-
nancing for tomorrow program (New START)

Purpose:

The purpose of this bill is to establish the New York student affordable
refinancing for tomorrow program (New Start), to authorize the state to
pay a certain about of a student's education loan debt and establish a
mechanism for such student to pay back the state at a low interest rate
and based on such student's income.

Summary of Provisions:

Section 1. Amends Article 14 of the education law to add five new
sections, 694-c-694-g, to establish the New York Student Affordable
Refinancing for Tomorrow Program (New Start);

694-c- provides definitions;

694-d -Creates the New Start program;

649-e- Provides for program eligibility;

649-f- Provides for program details;

649-g - Provides for program repayment requirements.

Section 2. amends the state finance law to establish the New York State
Affordable Refinancing for tomorrow fund.

Section 3. Provides for the effective date.

Justification:

This bill establishes a program to help alleviate the burden of student
loan debt. Eligible students who attend SUNY or CUNY and graduate with
student loan debt would be able to apply to the Higher Education
Services Corporation to have the state pay the students' private loan
debt in a lump sum to the lender, in an amount up to $35,000. The
student would then pay back the state over time based on their annual
salary and ability to pay.

Student loan debt has now surpassed credit card debt as the number one
source of debt in this country. It is becoming increasingly harder for
students and their families to afford a higher education. Many families
and students must take out private student loans in order to attend
college. Many private student loans have very high interest rates that
are difficult to pay back.

This bill would relieve student debt by directly paying an eligible
student's private student loan debt and establishing an affordable
repayment plan, with low interest rates that would be based upon a
student's yearly income.

Legislative History:

New bill

Fiscal Implications:

To be determined and pursuant to appropriation.

Effective Date:

This act shall take effect on the 120th day after it shall have become a
law, provided, however, that effective immediately, the addition, amend-
ment and/or repeal of any rule or regulation necessary for the implemen-
tation of this act on its effective date is authorized to be made an
completed on or before such date.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7791

                            I N  S E N A T E

                              June 9, 2014
                               ___________

Introduced  by  Sen. LAVALLE -- read twice and ordered printed, and when
  printed to be committed to the Committee on Higher Education

AN ACT to amend the education law and the state finance law, in relation
  to establishing the New York student affordable refinancing for tomor-
  row program (New START)

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Article 14 of the education law is amended by adding a new
part VI to read as follows:
                                  PART VI
                 NEW YORK STUDENT AFFORDABLE REFINANCING
                    FOR TOMORROW PROGRAM (NEW START)
SECTION 694-C. DEFINITIONS.
        694-D. NEW YORK  STUDENT  AFFORDABLE  REFINANCING  FOR  TOMORROW
                 PROGRAM (NEW START)
        694-E. PROGRAM ELIGIBILITY.
        694-F. PROGRAM.
        694-G. REPAYMENT.
  S  694-C.  DEFINITIONS. FOR PURPOSES OF THIS PART, THE FOLLOWING TERMS
SHALL HAVE THE FOLLOWING MEANINGS:  1. "EDUCATION LOAN" SHALL  MEAN  ANY
STUDENT  LOAN  THAT  THE  STATE  REFINANCES  UNDER  THE PROGRAM THAT WAS
OBTAINED BY A BORROWER FOR THE PURPOSES  OF  ATTENDING  COLLEGE  AT  THE
STATE  UNIVERSITY  OF  NEW  YORK  OR  THE  CITY  UNIVERSITY OF NEW YORK,
PROVIDED, HOWEVER, THAT LOANS PROVIDED BY  THE  FEDERAL  GOVERNMENT,  OR
LOANS  PROVIDED AT AN INTEREST RATE AT OR LOWER THAN THE CURRENT FEDERAL
LOAN INTEREST RATE SHALL NOT  BE  ELIGIBLE  FOR  REFINANCING  UNDER  THE
PROGRAM.
  2.  "PARTICIPANT"  SHALL  MEAN  AN INDIVIDUAL WHO HAS INCURRED STUDENT
LOAN DEBT FROM A LENDING INSTITUTION OR LENDER  TO  COVER  THE  COST  OF
TUITION  AT  THE  STATE UNIVERSITY OF NEW YORK OR THE CITY UNIVERSITY OF
NEW YORK AND HAS APPLIED TO PARTICIPATE AND BEEN ACCEPTED TO PARTICIPATE
IN THE PROGRAM.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14210-01-4

S. 7791                             2

  3. "LENDING INSTITUTION" OR "LENDER" SHALL MEAN ANY  ENTITY  THAT  HAS
ITSELF  OR  THROUGH  AN  AFFILIATE PROVIDED STUDENT LOANS TO AN ELIGIBLE
PARTICIPANT.
  4.  "PROGRAM"  SHALL  MEAN THE NEW YORK STUDENT AFFORDABLE REFINANCING
FOR TOMORROW PROGRAM (NEW START).
  5. "FUND" SHALL MEAN THE NEW YORK AFFORDABLE REFINANCING FOR  TOMORROW
PROGRAM  FUND  ESTABLISHED  BY SECTION NINTY-NINE-W OF THE STATE FINANCE
LAW.
  S 694-D. NEW YORK STUDENT AFFORDABLE REFINANCING FOR TOMORROW  PROGRAM
(NEW  START).   THE NEW YORK STUDENT AFFORDABLE REFINANCING FOR TOMORROW
PROGRAM (NEW START) IS HEREBY ESTABLISHED FOR THE PURPOSES OF  RELIEVING
STUDENT  DEBT  BY DIRECTLY PAYING AN ELIGIBLE PARTICIPANT'S LOAN DEBT TO
THE LENDING INSTITUTION OR LENDER AND PROVIDING A REPAYMENT PLAN WHEREBY
PAYMENTS WILL BE DEPOSITED IN THE FUND.
  1. THE CORPORATION SHALL PROMULGATE  RULES  AND  REGULATIONS  FOR  THE
ADMINISTRATION OF THIS PROGRAM AND SHALL MANAGE THE FUND IN CONSULTATION
WITH THE OFFICE OF THE COMPTROLLER.
  2.  THE CORPORATION SHALL DETERMINE ADDITIONAL REQUIREMENTS FOR ELIGI-
BLE PARTICIPANTS, OTHER THAN THOSE  SPECIFIED  IN  SECTION  SIX  HUNDRED
NINETY-FOUR-E  OF  THIS  PART,  SHALL  SET A FIXED INTEREST RATE FOR THE
REPAYMENT OF REFINANCED LOANS, WHICH SHALL BE  LOWER  THAN  THE  AVERAGE
MARKET  RATE  FOR PRIVATE STUDENT LOANS, AND SHALL ESTABLISH AN APPLICA-
TION PROCESS FOR THE PROGRAM.
  3. THE CORPORATION SHALL DETERMINE APPROPRIATE PAYMENT  DEFERMENT  AND
FORBEARANCE OPTIONS FOR LOSS OF EMPLOYMENT OR EXTREME HARDSHIP.
  S  694-E.  PROGRAM  ELIGIBILITY.  1. TO BE ELIGIBLE FOR THIS PROGRAM A
PARTICIPANT MUST:
  A. HAVE GRADUATED FROM THE STATE UNIVERSITY OF NEW YORK  OR  THE  CITY
UNIVERSITY OF NEW YORK WITHIN FOUR YEARS, OR FIVE YEARS IF ENROLLED IN A
PROGRAM NORMALLY REQUIRING FIVE YEARS;
  B. HAVE GRADUATED WITH A GRADE POINT AVERAGE AT OR ABOVE 3.0;
  C. HAVE INCURRED STUDENT LOAN DEBT;
  D.  BE GAINFULLY EMPLOYED FOR AT LEAST THREE MONTHS PRIOR TO FILING AN
APPLICATION TO PARTICIPATE IN THE PROGRAM;
  E. AGREE TO SIGN A CONTRACT WITH THE CORPORATION  TO  ALLOW  A  DIRECT
WITHDRAWAL  OF  PAYMENTS FROM THEIR PAY CHECKS UNTIL THE DEBT OBLIGATION
IS PAID IN FULL; AND
  F. MUST APPLY FOR THE PROGRAM WITHIN TWO YEARS  AFTER  COLLEGE  GRADU-
ATION.
  S  694-F.  PROGRAM. 1. THE CORPORATION SHALL MAKE LUMP SUM PAYMENTS TO
LENDING INSTITUTIONS OR LENDERS TO PAY ELIGIBLE PARTICIPANTS'  EDUCATION
LOANS OUT OF THE FUNDS APPROPRIATED TO THE FUND FOR THE PURPOSES OF THIS
PROGRAM  IN  AMOUNTS  NOT  TO  EXCEED  THIRTY-FIVE  THOUSAND DOLLARS PER
PARTICIPANT.
  2. LOANS THAT THE PARTICIPANT ACQUIRED FROM THE FEDERAL GOVERNMENT  OR
THOSE LOANS THAT HAVE A FIXED INTEREST RATE PROVIDED AT AN INTEREST RATE
AT  OR  LOWER  THAN  THE CURRENT FEDERAL LOAN INTEREST RATE SHALL NOT BE
ELIGIBLE FOR ACQUISITION UNDER THE PROGRAM.
  S 694-G. REPAYMENT. 1. PARTICIPANTS SHALL REPAY THE TOTAL COST OF  THE
DEBT OBLIGATION TO THE FUND AT AN INTEREST RATE DETERMINED BY THE CORPO-
RATION ACCORDING TO THE FOLLOWING:
  A.  DURING  THE  FIRST FIVE YEARS OF PARTICIPATION IN THE PROGRAM, THE
PARTICIPANT SHALL PAY THREE PERCENT OF THE SALARY EARNED PER YEAR DURING
EACH OF THOSE YEARS;

S. 7791                             3

  B. DURING THE NEXT FIVE YEARS OF PARTICIPATION  IN  THE  PROGRAM,  THE
PARTICIPANT  SHALL PAY FIVE PERCENT OF THE SALARY EARNED PER YEAR DURING
EACH OF THOSE YEARS;
  C.  DURING THE ELEVENTH YEAR OF PARTICIPATION AND EACH YEAR THEREAFTER
UNTIL THE DEBT OBLIGATION IS PAID IN FULL,  THE  PARTICIPANT  SHALL  PAY
EIGHT PERCENT OF THE SALARY EARNED PER YEAR DURING EACH OF THOSE YEARS.
  2.  THERE  SHALL  BE  NO  PRE-PAYMENT  PENALTIES UNDER THE PROGRAM AND
REPAYMENT SCHEDULES MAY BE CALCULATED AT A HIGHER  PERCENTAGE  RATE  PER
YEAR  OF  SALARY IF THE PARTICIPANT CHOOSES OR REQUESTS A FASTER RE-PAY-
MENT OPTION.
  S 2. The state finance law is amended by adding a new section 99-w  to
read as follows:
  S  99-W.  NEW YORK STUDENT AFFORDABLE REFINANCING FOR TOMORROW PROGRAM
FUND. 1. THERE IS HEREBY ESTABLISHED WITHIN THE CUSTODY OF THE NEW  YORK
STATE  HIGHER  EDUCATION  SERVICES CORPORATION, IN CONSULTATION WITH THE
STATE COMPTROLLER, OR HIS OR HER DESIGNEE, A FUND TO BE KNOWN AS THE NEW
YORK STUDENT AFFORDABLE REFINANCING FOR TOMORROW PROGRAM FUND.
  2. ALL MONIES RECEIVED PURSUANT TO THE  NEW  YORK  STUDENT  AFFORDABLE
REFINANCING FOR TOMORROW PROGRAM (NEW START) SHALL BE DEPOSITED INTO THE
FUND  AND  SHALL  BE MANAGED PURSUANT TO PART SIX OF ARTICLE FOURTEEN OF
THE EDUCATION LAW.
  3. ALL NECESSARY RULES AND REGULATIONS  FOR  THE  SUCCESSFUL  ADMINIS-
TRATION,  INVESTMENT AND MANAGEMENT OF SUCH FUND SHALL BE PROMULGATED BY
SUCH CORPORATION, IN CONSULTATION WITH THE STATE COMPTROLLER, OR HIS  OR
HER DESIGNEE.
  S 3. This act shall take effect on the one hundred twentieth day after
it shall have become a law, provided, however, that effective immediate-
ly,  the  addition,  amendment  and/or  repeal of any rule or regulation
necessary for the implementation of this act on its  effective  date  is
authorized to be made and completed on or before such date.

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