S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  2554--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             January 13, 2017
                                ___________
 
 Introduced  by  Sens. LAVALLE, AKSHAR, HELMING, MURPHY -- read twice and
   ordered printed, and when printed to be committed to the Committee  on
   Higher  Education  -- recommitted 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  commit-
   tee
 
 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.
   § 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.
              

                                                            LBD07977-03-8

 S. 2554--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 NINETY-NINE-BB OF THE STATE FINANCE
 LAW.
   § 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.
   §  694-E.  PROGRAM  ELIGIBILITY.  TO  BE  ELIGIBLE  FOR THIS PROGRAM A
 PARTICIPANT MUST:
   1. 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;
   2. HAVE GRADUATED WITH A GRADE POINT AVERAGE AT OR ABOVE 3.0;
   3. HAVE INCURRED STUDENT LOAN DEBT;
   4.  BE GAINFULLY EMPLOYED FOR AT LEAST THREE MONTHS PRIOR TO FILING AN
 APPLICATION TO PARTICIPATE IN THE PROGRAM;
   5. 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
   6. MUST APPLY FOR THE PROGRAM WITHIN TWO YEARS  AFTER  COLLEGE  GRADU-
 ATION.
   §  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.
   § 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. 2554--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.
   § 2. The state finance law is amended by adding a new section 99-bb to
 read as follows:
   § 99-BB. 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.
   § 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 are
 authorized to be made and completed on or before such date.