BILL NUMBER: S5048

SPONSOR: GOUNARDES
 
TITLE OF BILL:  An act to amend the labor law, in relation to student
loan repayment information

 
PURPOSE OR GENERAL IDEA OF BILL:

To require employers to provide newly hired employees with a notice
detailing student loan repayment options that may be available to
borrowers.

 
SUMMARY OF PROVISIONS:

Section one amends section 217-a of the Labor Law to require the Commis-
sioner of Labor, the !Commissioner of Education, and the Superintendent
of Financial Services, to develop a notice outlining student loan repay-
ment options, including ways to consolidate federal loans and income-
based repayment options and the website for the Department of Financial
Services' Student Lending Resource Center. The section stipulates that
every new employer shall be required to provide this notice to any
              

employee hired on or after the effective date.

Section two states that the act shall take effect on the 180th day after
it shall have become law.

 
JUSTIFICATION:

The American student loan crisis is one of epic proportions. According
to a 2019 NYC Department of Consumer Affairs' report "Student Loan Debt
Distress Across NYC Neighborhoods," total student loan debt in the US
has reached a staggering $1.5 trillion. The debt load for 2016 college
graduates nationally averaged more than $30,000, and in New York, the
problem is even worse: the State Comptroller estimates that between 2006
and 2015, the delinquency rate among New York borrowers rose more than a
third, with debt averaging more than $32,0000 per borrower. The inabili-
ty to repay student loans and build future assets carries many conse-
quences, forcing the borrower to forego other purchases such as a car or
a home, or interfering with the decision to get married and start a
family. Additionally, defaulting on a loan can cause an enormous amount
of stress, anxiety, and depression for a borrower that sees no way out
of the financial hole they're in.

It is long past time the state devised creative and effective solutions
to help residents begin to dig themselves out of that hole.  This bill
serves that purpose by requiring all employers to provide new employees
with a brief summary of the various student loan repayment options
available to them, including consolidation of federal loans and income-
driven plans. Providing this briefing at the onset of employment, when
employees are already opting into a number of other programs such as
health insurance, health savings accounts, transit benefits, and retire-
ment plans, is an opportune way to ensure that student loan repayment
plans are seriously examined by a potential borrower and naturally fold-
ed into his/her financial planning. This bill represents a thoughtful
and feasible approach to addressing the student loan debt crisis.

 
PRIOR LEGISLATIVE HISTORY:

New bill.
 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
This act shall take effect on the 180th day after it shall have become
law.