What's happening
This bill creates a New York State program to help eligible borrowers consolidate and refinance student loans at lower interest rates.
Why it matters
Offers lower, fixed interest rates (maximum 5.5%) for eligible borrowers. , which could significantly reduce the long-term cost of student loans for New Yorkers compared to many current private and federal rates.
Includes borrower protections for those who fall behind on payments. , requiring the state to review financial circumstances and potentially modify payment terms before taking legal action, which may prevent defaults and lessen financial hardship.
Funds the program through application fees and a small interest surcharge. , aiming to make the initiative self-sustaining and not a direct burden on taxpayers, while still providing tangible financial relief.
Requires detailed annual reporting with demographic breakdowns. , increasing transparency and enabling policymakers and the public to track how the program serves different communities and whether it helps address racial and gender disparities in student debt.
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Who cares
Headline styles
Refinance Student Loan Debt
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to higher education
- Referred to higher education
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1244
2025-2026 Regular Sessions
IN ASSEMBLY
January 9, 2025
Introduced by M. of A. SIMON, SEAWRIGHT, GONZALEZ-ROJAS, JACKSON, REYES -- 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 6 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 corporation shall review the eligible borrower's financial circumstances in
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02860-01-5
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.