New York State Governor Kathy Hochul signed legislation that ended the practice of charging those with student loans an additional fee when collecting outstanding debts.
The legislation (S.7862B/A.10261) ends the 22% fee which was added by states in addition to the total amount of debt due. Before this law, state law said that the Attorney General’s Civil Recoveries Bureau recover its costs of pursuing collections of education-related debt by means of the additional fee.
“When students across New York spoke up about the difficulties of digging out of debt, my administration listened,” Governor Hochul said on Oct. 13. “By signing this legislation, we are removing a barrier to higher education and ensuring that students can graduate without debilitating debt that has disproportionately hurt students least able to afford it. Every New Yorker deserves access to a quality education without fear of getting trapped in a cycle of debt.”
Several state agencies practice debt collection owed to the state from educational debt, and when they were unable to collect the debts through traditional means, these debts were then referred to the Civil Recoveries Bureau. Now, New Yorkers with student debt will be able to maintain a more regulated amount of their debt without substantial increases from fees.
“Student debt should not be a barrier preventing students from meeting their full potential, yet, far too often, students are forced to take on crushing debt to pursue opportunities in higher education,” said bill sponsor, State Senator Jamaal T. Bailey on Thursday. “This legislation will remove the additional fees and costs that pile onto a student’s total debt, decrease the amount of money borrowers pay overtime, and eliminate the additional burden to students who are already struggling to pay massive amounts of debt.”