What's happening
This bill creates a New York State program to consolidate and refinance student loans at lower interest rates for eligible borrowers.
Why it matters
Potential for Reduced Borrower Costs. By capping the interest rate for refinanced loans at 5.5% or lower, the program could significantly reduce monthly payments and total interest paid over time for many borrowers, making student debt more manageable.
Public Oversight and Transparency. The annual reporting requirement—detailing loan volumes, interest rates, borrower demographics, and administrative costs—means the public and lawmakers can monitor the program’s effectiveness, equity, and fiscal health.
Borrower Protections in Hardship. The bill requires the program to review and possibly modify payments if a borrower becomes delinquent due to financial hardship, introducing a safety net that could help prevent defaults and additional financial distress.
Self-Sustaining Funding Model. By covering administrative costs through application fees and interest surcharges, the program aims to avoid drawing on general state funds, potentially making it more sustainable and less reliant on taxpayer subsidies.
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Who cares
Headline styles
Lower Student Loan Interest
Plain English, a few words. Used as the page title.
Sponsors
36 Co-sponsors
- Joseph Morelle
- Luis R. Sepúlveda
- Victor M. Pichardo
- Philip Ramos
- Jose Rivera
- Carmen E. Arroyo
- Erik Dilan
- Robert J. Rodriguez
- Carmen De La Rosa
- Steven Englebright
- Michael Blake
- Aileen Gunther
- Jaime R. Williams
- Steven Cymbrowitz
- John T. McDonald III
- Jo Anne Simon
- Rodneyse Bichotte Hermelyn
- Kenneth Zebrowski
- Latoya Joyner
- Shelley Mayer
- Charles Lavine
- Michael G. Miller
- Walter T. Mosley
- Barbara Lifton
- Fred Thiele
- Kevin Cahill
- William Colton
- J. Gary Pretlow
- Crystal Peoples-Stokes
- Gary Finch
- Brian F. Curran
- Kenneth Blankenbush
- David McDonough
- Dean Murray
- Richard Gottfried
- Brian Barnwell
History
- Referred to higher education
- Referred to higher education
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Refinance Student Loan Debt
In Senate Committee · Higher Education · Sponsor Jesse Hamilton
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3498
2017-2018 Regular Sessions
IN ASSEMBLY
January 27, 2017
Introduced by M. of A. CRESPO, SEPULVEDA, PICHARDO, RAMOS, RIVERA, ARROYO, DILAN, RODRIGUEZ, MOYA, DE LA ROSA -- read once and referred to the Committee on Higher Education
AN ACT to amend the education law, in relation to establishing the New York state higher education debt consolidation and refinancing program
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Article 14 of the education law is amended by adding a new part VI to read as follows:
PART VI
NEW YORK STATE HIGHER EDUCATION DEBT CONSOLIDATION AND
REFINANCING PROGRAM Section 694-j. New York state higher education debt consolidation and
refinancing program.
§ 694-j. New York state higher education debt consolidation and refinancing program. 1. The corporation shall have the authority to issue up to five hundred million dollars in bonds, to consolidate and refinance the education loans of eligible borrowers at a lower interest rate, provided, however if the corporation determines it needs to issue more than five hundred million dollars in bonds to operate the program effectively, the corporation shall make the determination by January fifteen of the year subsequent to when the program goes into effect.
2. The corporation shall consolidate and refinance the education loans of eligible borrowers and interest shall accrue upon all student loan payments made by eligible borrowers to the corporation at a rate per annum that is equal to or less than 5.5%. Interest shall accrue from the time the eligible borrower commences repayment under this section, and shall accrue only during the period over which the eligible borrower is required to make such repayment.
3. Should an eligible borrower fail to pay to the division any amounts owed under this section within thirty days of the due date, the corpo-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08267-01-7
A. 3498 2
ration shall review the eligible borrower's financial circumstances in order to determine whether the delinquency is a result of a change in the eligible borrower's financial circumstances. If such a determination is made, the corporation may modify the eligible borrower's required payments. If failure to pay is not determined to be due to a material deterioration in the eligible borrower's financial circumstances, the corporation shall terminate and take any legal action necessary to enforce the terms of the loan.
4. The program's operating and administrative costs shall be covered by the fees charged to apply for the refinancing and the interest rate surcharge.
5. The corporation shall submit an annual report on the program to the governor and the legislature and the report shall be published on the corporation's website. The report shall include but not be limited to the following:
(a) The amount of bonds floated to cover the student debt refinancing;
(b) The number of loans refinanced;
(c) The breakdown of the refinancing rates charged to refinance;
(d) The gender, race and ethnicity of the person refinancing;
(e) The total debt load refinanced by each racial or ethnic group; and
(f) The total administrative costs for operating the refinancing program and the projected total refinancing costs incurred till debt is paid for each racial and ethnic group.
6. The corporation is authorized to promulgate rules and regulations necessary for the implementation of the provisions of this section.
7. Under this section "eligible borrower" and "education loan" shall mean as defined under section six hundred ninety of this article.
§ 2. This act shall take effect on the one hundred twentieth day after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.