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

                                 522--A

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 7, 2015
                               ___________

Introduced  by  Sen. LAVALLE -- read twice and ordered printed, and when
  printed to be committed to the Committee on Higher Education -- recom-
  mitted to the Committee on Higher Education in accordance with  Senate
  Rule  6,  sec.  8  --  committee  discharged,  bill  amended,  ordered
  reprinted as amended and recommitted to said committee

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.

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

                                                           LBD03381-02-6

S. 522--A                           2

  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.
  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-Y 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:

S. 522--A                           3

  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;
  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-y  to
read as follows:
  S  99-Y.  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.