Bill Text: NY S02554 | 2017-2018 | General Assembly | Amended
Bill Title: Establishes the New York student affordable refinancing for tomorrow program (New START) for the purpose of relieving student debt by directly paying an eligible participant's loan debt to the lending institution or lender and providing a repayment plan whereby payments will be deposited in the fund.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Engrossed - Dead) 2018-01-22 - REPORTED AND COMMITTED TO FINANCE [S02554 Detail]
Download: New_York-2017-S02554-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 2554--A 2017-2018 Regular Sessions IN SENATE January 13, 2017 ___________ Introduced by Sens. LAVALLE, AKSHAR, HELMING, MURPHY -- read twice and ordered printed, and when printed to be committed to the Committee on Higher Education -- recommitted to the Committee on Higher Education in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee AN ACT to amend the education law and the state finance law, in relation to establishing the New York student affordable refinancing for tomor- row program (New START) The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Article 14 of the education law is amended by adding a new 2 part VI to read as follows: 3 PART VI 4 NEW YORK STUDENT AFFORDABLE REFINANCING 5 FOR TOMORROW PROGRAM (New START) 6 Section 694-c. Definitions. 7 694-d. New York student affordable refinancing for tomorrow 8 program (New START) 9 694-e. Program eligibility. 10 694-f. Program. 11 694-g. Repayment. 12 § 694-c. Definitions. For purposes of this part, the following terms 13 shall have the following meanings: 1. "Education loan" shall mean any 14 student loan that the state refinances under the program that was 15 obtained by a borrower for the purposes of attending college at the 16 state university of New York or the city university of New York, 17 provided, however, that loans provided by the federal government, or 18 loans provided at an interest rate at or lower than the current federal 19 loan interest rate shall not be eligible for refinancing under the 20 program. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD07977-03-8S. 2554--A 2 1 2. "Participant" shall mean an individual who has incurred student 2 loan debt from a lending institution or lender to cover the cost of 3 tuition at the state university of New York or the city university of 4 New York and has applied to participate and been accepted to participate 5 in the program. 6 3. "Lending institution" or "lender" shall mean any entity that has 7 itself or through an affiliate provided student loans to an eligible 8 participant. 9 4. "Program" shall mean the New York student affordable refinancing 10 for tomorrow program (New START). 11 5. "Fund" shall mean the New York affordable refinancing for tomorrow 12 program fund established by section ninety-nine-bb of the state finance 13 law. 14 § 694-d. New York student affordable refinancing for tomorrow program 15 (New START). The New York student affordable refinancing for tomorrow 16 program (New START) is hereby established for the purposes of relieving 17 student debt by directly paying an eligible participant's loan debt to 18 the lending institution or lender and providing a repayment plan whereby 19 payments will be deposited in the fund. 20 1. The corporation shall promulgate rules and regulations for the 21 administration of this program and shall manage the fund in consultation 22 with the office of the comptroller. 23 2. The corporation shall determine additional requirements for eligi- 24 ble participants, other than those specified in section six hundred 25 ninety-four-e of this part, shall set a fixed interest rate for the 26 repayment of refinanced loans, which shall be lower than the average 27 market rate for private student loans, and shall establish an applica- 28 tion process for the program. 29 3. The corporation shall determine appropriate payment deferment and 30 forbearance options for loss of employment or extreme hardship. 31 § 694-e. Program eligibility. To be eligible for this program a 32 participant must: 33 1. have graduated from the state university of New York or the city 34 university of New York within four years, or five years if enrolled in a 35 program normally requiring five years; 36 2. have graduated with a grade point average at or above 3.0; 37 3. have incurred student loan debt; 38 4. be gainfully employed for at least three months prior to filing an 39 application to participate in the program; 40 5. agree to sign a contract with the corporation to allow a direct 41 withdrawal of payments from their pay checks until the debt obligation 42 is paid in full; and 43 6. must apply for the program within two years after college gradu- 44 ation. 45 § 694-f. Program. 1. The corporation shall make lump sum payments to 46 lending institutions or lenders to pay eligible participants' education 47 loans out of the funds appropriated to the fund for the purposes of this 48 program in amounts not to exceed thirty-five thousand dollars per 49 participant. 50 2. Loans that the participant acquired from the federal government or 51 those loans that have a fixed interest rate provided at an interest rate 52 at or lower than the current federal loan interest rate shall not be 53 eligible for acquisition under the program. 54 § 694-g. Repayment. 1. Participants shall repay the total cost of the 55 debt obligation to the fund at an interest rate determined by the corpo- 56 ration according to the following:S. 2554--A 3 1 a. During the first five years of participation in the program, the 2 participant shall pay three percent of the salary earned per year during 3 each of those years; 4 b. During the next five years of participation in the program, the 5 participant shall pay five percent of the salary earned per year during 6 each of those years; 7 c. During the eleventh year of participation and each year thereafter 8 until the debt obligation is paid in full, the participant shall pay 9 eight percent of the salary earned per year during each of those years. 10 2. There shall be no pre-payment penalties under the program and 11 repayment schedules may be calculated at a higher percentage rate per 12 year of salary if the participant chooses or requests a faster re-pay- 13 ment option. 14 § 2. The state finance law is amended by adding a new section 99-bb to 15 read as follows: 16 § 99-bb. New York student affordable refinancing for tomorrow program 17 fund. 1. There is hereby established within the custody of the New York 18 state higher education services corporation, in consultation with the 19 state comptroller, or his or her designee, a fund to be known as the New 20 York student affordable refinancing for tomorrow program fund. 21 2. All monies received pursuant to the New York student affordable 22 refinancing for tomorrow program (New START) shall be deposited into the 23 fund and shall be managed pursuant to part six of article fourteen of 24 the education law. 25 3. All necessary rules and regulations for the successful adminis- 26 tration, investment and management of such fund shall be promulgated by 27 such corporation, in consultation with the state comptroller, or his or 28 her designee. 29 § 3. This act shall take effect on the one hundred twentieth day after 30 it shall have become a law, provided, however, that effective immediate- 31 ly, the addition, amendment and/or repeal of any rule or regulation 32 necessary for the implementation of this act on its effective date are 33 authorized to be made and completed on or before such date.
