Establishes the New York student affordable refinancing for tomorrow program (New START)

Title of bill

An act to amend the education law and the state finance law, in relation to establishing the New York student affordable refinancing for tomorrow program (New START)

Purpose

To establish the New York student affordable refinancing for tomorrow program (New Start), to authorize the State to pay a certain amount of a student's education loan debt and establish a mechanism for such student to pay back the State at a low interest rate and based on such student's income.

Summary of provisions

Section 1. Amends Article 14 of the education law to add five new sections 694-c 694-g, to establish the New York Student Affordable Refinancing for Tomorrow Program (New Start);

694-c provides definition; 694-d creates the New Start program; 694-e provides for program eligibility; 694-f provides for program details; 694-g provides for program repayment requirements.

Section 2. Amends the state finance law to establish the New York State Affordable Refinancing for tomorrow fund.

Section 3. Provides for the effective date.

Justification

This bill establishes a program to help alleviate the burden of student loan debt. Eligible students who attend SUNY or CUNY and graduate with student loan debt would be able to apply to the Higher Education Services Corporation to have the State pay the students' private loan debt in a lump sum to the lender, in an amount up to $35,000. The student would then pay back the State over time based on their annual salary and ability pay.

Student loan debt has now surpassed credit card debt as the number one source of debt in this country. It is becoming increasingly harder for students and their families to afford a higher education. Many families and students must take out private student loans in order to attend college. Many private student loans have very high interest rates that are difficult to pay back.

This bill would relieve student debt by directly paying an eligible student's private student loan debt and establishing an affordable repayment plan with low interest rates that would be based upon a student's yearly income.

Legislative history

2014 S.7791

Fiscal implications

To be determined and pursuant to appropriation.

Effective date

This act shall take effect on the 120th day after it shall have become a law, provided, however, that effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date is authorized to be made and completed on or before such date.