Enacts various legislation designed to make college more affordable for the citizens of the state

Summary of provisions

Part A: The Stay in New York Tax Credit

This bill would amend section 606 of the Tax Law to establish the Stay in New York Tax Credit. In order to retain the graduates from New York colleges and universities, such credit would allow college graduates a credit equal to their college expenses over four years. This credit would be capped at $3,000 per year, and would apply to those graduates who live and work in New York, subsequent to graduation, and complete community service while they are attending college.

The Tuition Tax Credit

This bill would further amend section 606 of the Tax Law to improve New York's Tuition Tax Credit. In order to increase college affordability, the current tuition tax credit would be amended to:

Double the amount of qualified college expenses that can be claimed from $10,000 to $20,000 over five years;

Double the maximum amount of the credit allowed from $400 to $800 over five years; and

Index the qualified expenses and credit to the rate of inflation of the Higher Education Price Index.

Part B: The Student Loan Linked Deposit Program

This bill would additionally add a new article 15-A to the State Finance Law to establish the Student Loan Linked Deposit Program. Modeled off of the highly successful linked deposit program for economic development, this new student loan program would provide

low-cost student loans by means of authorizing the comptroller to place state deposits with participating lenders at a decreased interest rate, in order to offer students reduced rate student loans, at up to 3 points below market rates.

This Part would designate $100 million dollars for this program, with repaid loan amounts revolving back into available deposits and loans. Loans would be available for students of in state colleges, for qualified educational expenses (tuition, fees, books, supplies, room and board), in the maximum amount of $7,500 per academic year, and a maximum total amount of S30,000.

Part C: The Student Lending Transparency Program

This bill would also add a new Article 6 to the Financial Services Law, and a new Article 14-8 to the Education Law, to establish a Student Lending Transparency Program. Pursuant to this program, the Department of Financial Services would be required to compile data on student loans for the purpose of comparing loan rates and repayment plans. The superintendent would be required to take such data and create a list of private lenders who provide the best loan rates and repayment options on student loans, and place such list on an easily accessible website with links to the Higher Education Services Corporation's website as well as the websites of other colleges and universities. The list and the website maintained by the department would be updated monthly.

Pursuant to this Part, colleges and Universities would further be required to provide prospective and newly enrolled students with clearly outlined and easy to understand information pertaining to the total cost of attendance at their institution. Such information would include the total amount of debt, and the payments thereon, the student would incur.

Part D: The Pre-Paid Tuition Program

This bill would also add a new sections 355-d of the education law, and 99-u of the state finance law, and amend section 612 of the tax law, to establish a New York State Pre-pay tuition savings program. Such program would allow participants to prepay college tuition at SUNY or CUNY institutions by paying one third of the annual total cost of their college education for a period of twelve years. Payments would be made through a fund administered by the Comptroller, in consultation with the Chancellor of the State University of New York and the Chancellor of the City University of New York.

Justification

The cost of a college education is becoming more and more a financial burden unable to be borne by a college student during their college tenure. As a result parents or students are either forced to bear crushing financial circumstances or incur huge amounts of debt in order to obtain a college education.

Since the enactment of the tuition tax credit/deduction in SFY 2000-01, tuition and fees at public and private colleges throughout the State have increased by over 47 percent. However, the amount of

tuition expenses that a taxpayer can claim as a credit or deduction has not.

Accordingly this bill seeks to address this problem, through a three part program. First, tax credits to make paying college tuition more affordable for those who are educated and stay in New York State, second lower cost student loans through a linked deposit student loan program, and third, increased transparency and information to allow consumer students to shop more wisely when purchasing a college education.

In the new age of global competitiveness, it is especially important for our state to provide the educational opportunities necessary for the people of New York to succeed. Higher education opens the doors of opportunity, and this bill will permit many more people to not only open the door, but also walk through it, without an unbearable cost or debt burden that will impair their future.

By its terms this bill seeks to ensure that rapidly escalating tuition costs don't place the dreams of an outstanding higher education out-of-reach for hardworking, middle class families across our State. It seeks to offer New York's young graduates an opportunity to better manage their finances when they leave college and begin their careers. By its terms, this bill will help lower the cost of a higher education for middle class families and students, encourage young New Yorkers to stay and begin their careers here at home in the Empire State, and reduce overall higher education expenditures by encouraging students to graduate more quickly and with less outstanding debt.

Legislative history

2012 S.7449A

Fiscal implications

Part A: The Stay in New York Tax Credit and the improved Tuition Tax Credit will save taxpayers $212 million by 2016. Part B: The Linked Deposit Student Loan Program provides for a $100 million investment of state deposits. Part C: None Noted Part D: None noted, as participant contributions would cover the cost of the program.

Effective date

This act shall take effect immediately provided, however, that the applicable effective date of Parts A through D of this act shall be as specifically set forth in the last section of such Parts.