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Sponsors
1 Co-sponsor
History
- Referred to higher education
- Referred to higher education
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S3924
Title of bill
An act to amend the education law, in relation to establishing the New York state college graduate loan forgiveness incentive program; and to amend the tax law, in relation to reducing federal adjusted gross income, for purposes of state personal income taxes, by the amount of interest on indebtedness incurred for tuition and fees paid for undergraduate education
Purpose
To address the growing problem of student loan debt load being carried by recent college and post-graduate school graduates by creating a grant program for graduates of New York colleges and universities that go to work in public service in New York State and by creating a tax deduction for interest on student debt that matches the federal deduction for persons making up to $75,000 per year.
Read the full memo (601 words)
Summary of provisions
Section 1. Amends Education Law § 679 by adding subdivision (g), which creates the New York State college graduate loan forgiveness incentive program. In order to be eligible for this program, an applicant must have obtained a bachelor's degree or graduate degree from a college or university located within NYS during or after the 2015-2016 academic year. The applicant must be employed in NYS, and work for a federal, state, or local governmental agency, entity, or organization, or with a qualifying not-for-profit organization. Eligible applicants will receive an award of $1,000 after 36 months of qualifying employment, $1,500 after 60 months of qualifying employment, and $2,000 after 80 months of qualifying employment. The awards will be applied by HESC directly to the balance of a school loan of the applicant's choice.
Section 2: Amends § 612 of the Tax Law by adding paragraph 42, which creates a tax deduction for interest on undergraduate student loans in accordance with the federal deduction, for applicants earning up to $75,000 per year.
Section 3: Sets the effective date.
Existing law
New Law
Justification
Over the last decade, the cost of tuition has increased faster than both inflation and average wages, which has led to tuition becoming one of the biggest financial challenges faced by college bound students and their families. While students and their families are amassing college debts at unprecedented rates, not enough is done to help ease this burden. By creating this grant program, those graduates of New York colleges and graduate schools who desire to enter into a career in public service will have an opportunity to help the people of New York State while also receiving the benefit of lessening their significant loan debt.
Further, this bill also creates a tax credit deduction for student loan interest. Currently, the federal government allows a tax deduction for student loan interest, capped at $2,500. This bill matches the federal loan deduction at $2,500 for applicants earning less than $75,000 per year, meaning that those people with large student loan debts will now be eligible to receive a total of up to $5,000 in tax deductions for interest payments on student loans, which will go a long way in helping to ease the significant burden of student loan debts for many of New York's citizens.
Legislative history
New bill
Fiscal implications
Loan Forgiveness Incentive Program: $30.5 million in the first year (2017-2018), growing to and annualizing at $137.5 million beginning in 2021-2022.
Tax Deduction: $33 million
Effective date
Immediately; provided that if this act shall become a law after April 1, 2015, section one shall be deemed to have been in full force and effect on and after April 1, 2015; section two shall apply to the tax year in which it takes effect, and all subsequent tax years
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.