Bill Text: NY S07791 | 2013-2014 | General Assembly | Introduced
Bill Title: Establishes the New York student affordable refinancing for tomorrow program (New START).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2014-06-12 - referred to higher education [S07791 Detail]
Download: New_York-2013-S07791-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
7791
I N S E N A T E
June 9, 2014
___________
Introduced by Sen. LAVALLE -- read twice and ordered printed, and when
printed to be committed to the Committee on Higher Education
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 S 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.
21 2. "PARTICIPANT" SHALL MEAN AN INDIVIDUAL WHO HAS INCURRED STUDENT
22 LOAN DEBT FROM A LENDING INSTITUTION OR LENDER TO COVER THE COST OF
23 TUITION AT THE STATE UNIVERSITY OF NEW YORK OR THE CITY UNIVERSITY OF
24 NEW YORK AND HAS APPLIED TO PARTICIPATE AND BEEN ACCEPTED TO PARTICIPATE
25 IN THE PROGRAM.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14210-01-4
S. 7791 2
1 3. "LENDING INSTITUTION" OR "LENDER" SHALL MEAN ANY ENTITY THAT HAS
2 ITSELF OR THROUGH AN AFFILIATE PROVIDED STUDENT LOANS TO AN ELIGIBLE
3 PARTICIPANT.
4 4. "PROGRAM" SHALL MEAN THE NEW YORK STUDENT AFFORDABLE REFINANCING
5 FOR TOMORROW PROGRAM (NEW START).
6 5. "FUND" SHALL MEAN THE NEW YORK AFFORDABLE REFINANCING FOR TOMORROW
7 PROGRAM FUND ESTABLISHED BY SECTION NINTY-NINE-W OF THE STATE FINANCE
8 LAW.
9 S 694-D. NEW YORK STUDENT AFFORDABLE REFINANCING FOR TOMORROW PROGRAM
10 (NEW START). THE NEW YORK STUDENT AFFORDABLE REFINANCING FOR TOMORROW
11 PROGRAM (NEW START) IS HEREBY ESTABLISHED FOR THE PURPOSES OF RELIEVING
12 STUDENT DEBT BY DIRECTLY PAYING AN ELIGIBLE PARTICIPANT'S LOAN DEBT TO
13 THE LENDING INSTITUTION OR LENDER AND PROVIDING A REPAYMENT PLAN WHEREBY
14 PAYMENTS WILL BE DEPOSITED IN THE FUND.
15 1. THE CORPORATION SHALL PROMULGATE RULES AND REGULATIONS FOR THE
16 ADMINISTRATION OF THIS PROGRAM AND SHALL MANAGE THE FUND IN CONSULTATION
17 WITH THE OFFICE OF THE COMPTROLLER.
18 2. THE CORPORATION SHALL DETERMINE ADDITIONAL REQUIREMENTS FOR ELIGI-
19 BLE PARTICIPANTS, OTHER THAN THOSE SPECIFIED IN SECTION SIX HUNDRED
20 NINETY-FOUR-E OF THIS PART, SHALL SET A FIXED INTEREST RATE FOR THE
21 REPAYMENT OF REFINANCED LOANS, WHICH SHALL BE LOWER THAN THE AVERAGE
22 MARKET RATE FOR PRIVATE STUDENT LOANS, AND SHALL ESTABLISH AN APPLICA-
23 TION PROCESS FOR THE PROGRAM.
24 3. THE CORPORATION SHALL DETERMINE APPROPRIATE PAYMENT DEFERMENT AND
25 FORBEARANCE OPTIONS FOR LOSS OF EMPLOYMENT OR EXTREME HARDSHIP.
26 S 694-E. PROGRAM ELIGIBILITY. 1. TO BE ELIGIBLE FOR THIS PROGRAM A
27 PARTICIPANT MUST:
28 A. HAVE GRADUATED FROM THE STATE UNIVERSITY OF NEW YORK OR THE CITY
29 UNIVERSITY OF NEW YORK WITHIN FOUR YEARS, OR FIVE YEARS IF ENROLLED IN A
30 PROGRAM NORMALLY REQUIRING FIVE YEARS;
31 B. HAVE GRADUATED WITH A GRADE POINT AVERAGE AT OR ABOVE 3.0;
32 C. HAVE INCURRED STUDENT LOAN DEBT;
33 D. BE GAINFULLY EMPLOYED FOR AT LEAST THREE MONTHS PRIOR TO FILING AN
34 APPLICATION TO PARTICIPATE IN THE PROGRAM;
35 E. AGREE TO SIGN A CONTRACT WITH THE CORPORATION TO ALLOW A DIRECT
36 WITHDRAWAL OF PAYMENTS FROM THEIR PAY CHECKS UNTIL THE DEBT OBLIGATION
37 IS PAID IN FULL; AND
38 F. MUST APPLY FOR THE PROGRAM WITHIN TWO YEARS AFTER COLLEGE GRADU-
39 ATION.
40 S 694-F. PROGRAM. 1. THE CORPORATION SHALL MAKE LUMP SUM PAYMENTS TO
41 LENDING INSTITUTIONS OR LENDERS TO PAY ELIGIBLE PARTICIPANTS' EDUCATION
42 LOANS OUT OF THE FUNDS APPROPRIATED TO THE FUND FOR THE PURPOSES OF THIS
43 PROGRAM IN AMOUNTS NOT TO EXCEED THIRTY-FIVE THOUSAND DOLLARS PER
44 PARTICIPANT.
45 2. LOANS THAT THE PARTICIPANT ACQUIRED FROM THE FEDERAL GOVERNMENT OR
46 THOSE LOANS THAT HAVE A FIXED INTEREST RATE PROVIDED AT AN INTEREST RATE
47 AT OR LOWER THAN THE CURRENT FEDERAL LOAN INTEREST RATE SHALL NOT BE
48 ELIGIBLE FOR ACQUISITION UNDER THE PROGRAM.
49 S 694-G. REPAYMENT. 1. PARTICIPANTS SHALL REPAY THE TOTAL COST OF THE
50 DEBT OBLIGATION TO THE FUND AT AN INTEREST RATE DETERMINED BY THE CORPO-
51 RATION ACCORDING TO THE FOLLOWING:
52 A. DURING THE FIRST FIVE YEARS OF PARTICIPATION IN THE PROGRAM, THE
53 PARTICIPANT SHALL PAY THREE PERCENT OF THE SALARY EARNED PER YEAR DURING
54 EACH OF THOSE YEARS;
S. 7791 3
1 B. DURING THE NEXT FIVE YEARS OF PARTICIPATION IN THE PROGRAM, THE
2 PARTICIPANT SHALL PAY FIVE PERCENT OF THE SALARY EARNED PER YEAR DURING
3 EACH OF THOSE YEARS;
4 C. DURING THE ELEVENTH YEAR OF PARTICIPATION AND EACH YEAR THEREAFTER
5 UNTIL THE DEBT OBLIGATION IS PAID IN FULL, THE PARTICIPANT SHALL PAY
6 EIGHT PERCENT OF THE SALARY EARNED PER YEAR DURING EACH OF THOSE YEARS.
7 2. THERE SHALL BE NO PRE-PAYMENT PENALTIES UNDER THE PROGRAM AND
8 REPAYMENT SCHEDULES MAY BE CALCULATED AT A HIGHER PERCENTAGE RATE PER
9 YEAR OF SALARY IF THE PARTICIPANT CHOOSES OR REQUESTS A FASTER RE-PAY-
10 MENT OPTION.
11 S 2. The state finance law is amended by adding a new section 99-w to
12 read as follows:
13 S 99-W. NEW YORK STUDENT AFFORDABLE REFINANCING FOR TOMORROW PROGRAM
14 FUND. 1. THERE IS HEREBY ESTABLISHED WITHIN THE CUSTODY OF THE NEW YORK
15 STATE HIGHER EDUCATION SERVICES CORPORATION, IN CONSULTATION WITH THE
16 STATE COMPTROLLER, OR HIS OR HER DESIGNEE, A FUND TO BE KNOWN AS THE NEW
17 YORK STUDENT AFFORDABLE REFINANCING FOR TOMORROW PROGRAM FUND.
18 2. ALL MONIES RECEIVED PURSUANT TO THE NEW YORK STUDENT AFFORDABLE
19 REFINANCING FOR TOMORROW PROGRAM (NEW START) SHALL BE DEPOSITED INTO THE
20 FUND AND SHALL BE MANAGED PURSUANT TO PART SIX OF ARTICLE FOURTEEN OF
21 THE EDUCATION LAW.
22 3. ALL NECESSARY RULES AND REGULATIONS FOR THE SUCCESSFUL ADMINIS-
23 TRATION, INVESTMENT AND MANAGEMENT OF SUCH FUND SHALL BE PROMULGATED BY
24 SUCH CORPORATION, IN CONSULTATION WITH THE STATE COMPTROLLER, OR HIS OR
25 HER DESIGNEE.
26 S 3. This act shall take effect on the one hundred twentieth day after
27 it shall have become a law, provided, however, that effective immediate-
28 ly, the addition, amendment and/or repeal of any rule or regulation
29 necessary for the implementation of this act on its effective date is
30 authorized to be made and completed on or before such date.
