NY State Senate Bill 2015-S3924

Senate Bill S3924

2015-2016 Legislative Session

Establishes, within the New York state higher education services corporation, the New York state college graduate loan forgiveness incentive program

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Archive: Last Bill Status - In Senate Committee Higher Education Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2016	referred to higher education
Feb 20, 2015	referred to higher education

co-Sponsors

2015-S3924 (ACTIVE) - Details

Current Committee:: Senate Higher Education
Law Section:: Education Law
Laws Affected:: Add §679-g, Ed L; amd §612, Tax L

2015-S3924 (ACTIVE) - Summary

Establishes, within the New York state higher education services corporation, the New York state college graduate loan forgiveness incentive program; such program provides awards to residents of the state who received a bachelor or graduate degree from a college or university in the state, and who subsequently are employed by a governmental or not-for profit agency for certain periods of time; awards shall be used to pay down the principal on the recipient's outstanding college loans; and establishes a reduction of federal adjusted gross income, for state personal income tax purposes, for interest paid on undergraduate college loans for taxpayers earning $75,000 or less.

2015-S3924 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S3924

TITLE OF BILL:  An act to amend the education law, in relation to
establishing the New York state college graduate loan forgiveness
incentive program; and to amend the tax law, in relation to reducing
federal adjusted gross income, for purposes of state personal income
taxes, by the amount of interest on indebtedness incurred for tuition
and fees paid for undergraduate education

PURPOSE:

To address the growing problem of student loan debt load being carried
by recent college and post-graduate school graduates by creating a
grant program for graduates of New York colleges and universities that
go to work in public service in New York State and by creating a tax
deduction for interest on student debt that matches the federal
deduction for persons making up to $75,000 per year.

SUMMARY OF PROVISIONS:

Section 1. Amends Education Law § 679 by adding subdivision (g), which
creates the New York State college graduate loan forgiveness incentive
program. In order to be eligible for this program, an applicant must
have obtained a bachelor's degree or graduate degree from a college or
university located within NYS during or after the 2015-2016 academic
year. The applicant must be employed in NYS, and work for a federal,

state, or local governmental agency, entity, or organization, or with
a qualifying not-for-profit organization.  Eligible applicants will
receive an award of $1,000 after 36 months of qualifying employment,
$1,500 after 60 months of qualifying employment, and $2,000 after 80
months of qualifying employment. The awards will be applied by HESC
directly to the balance of a school loan of the applicant's choice.

Section 2: Amends § 612 of the Tax Law by adding paragraph 42, which
creates a tax deduction for interest on undergraduate student loans in
accordance with the federal deduction, for applicants earning up to
$75,000 per year.

Section 3: Sets the effective date.

EXISTING LAW:

New Law

JUSTIFICATION:

Over the last decade, the cost of tuition has increased faster than
both inflation and average wages, which has led to tuition becoming
one of the biggest financial challenges faced by college bound
students and their families. While students and their families are
amassing college debts at unprecedented rates, not enough is done to
help ease this burden.  By creating this grant program, those
graduates of New York colleges and graduate schools who desire to
enter into a career in public service will have an opportunity to help
the people of New York State while also receiving the benefit of
lessening their significant loan debt.


Further, this bill also creates a tax credit deduction for student
loan interest. Currently, the federal government allows a tax
deduction for student loan interest, capped at $2,500. This bill
matches the federal loan deduction at $2,500 for applicants earning
less than $75,000 per year, meaning that those people with large
student loan debts will now be eligible to receive a total of up to
$5,000 in tax deductions for interest payments on student loans, which
will go a long way in helping to ease the significant burden of
student loan debts for many of New York's citizens.

LEGISLATIVE HISTORY:

New bill

FISCAL IMPLICATIONS:

Loan Forgiveness Incentive Program: $30.5 million in the first year
(2017-2018), growing to and annualizing at $137.5 million beginning in
2021-2022.

Tax Deduction: $33 million

EFFECTIVE DATE:

Immediately; provided that if this act shall become a law after April
1, 2015, section one shall be deemed to have been in full force and
effect on and after April 1, 2015; section two shall apply to the tax
year in which it takes effect, and all subsequent tax years

2015-S3924 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3924

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            February 20, 2015
                               ___________

Introduced  by  Sen.  KLEIN  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Higher Education

AN ACT to amend the education law, in relation to establishing  the  New
  York state college graduate loan forgiveness incentive program; and to
  amend  the  tax  law,  in  relation to reducing federal adjusted gross
  income, for purposes of state personal income taxes, by the amount  of
  interest on indebtedness incurred for tuition and fees paid for under-
  graduate education

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The education law is amended by adding a new section  679-g
to read as follows:
  S  679-G.  NEW  YORK STATE COLLEGE GRADUATE LOAN FORGIVENESS INCENTIVE
PROGRAM. 1. PURPOSE. THE PRESIDENT SHALL GRANT STUDENT LOAN  FORGIVENESS
AWARDS FOR THE PURPOSE OF ALLEVIATING THE BURDEN OF STUDENT LOAN INDEBT-
EDNESS FOR RESIDENTS WHO HAVE GRADUATED FROM COLLEGE.
  2. ELIGIBILITY. TO BE  ELIGIBLE FOR AN AWARD PURSUANT TO THIS SECTION,
AN  APPLICANT  SHALL:  (A)  HAVE  GRADUATED AND OBTAINED A BACHELOR'S OR
GRADUATE DEGREE DURING THE TWO THOUSAND FIFTEEN -- TWO THOUSAND  SIXTEEN
OR  ANY  SUBSEQUENT  ACADEMIC  YEAR FROM A COLLEGE OR UNIVERSITY LOCATED
WITHIN THE STATE; (B) HAVE AN OUTSTANDING LOAN DEBT FROM OBTAINING  SUCH
DEGREE;  (C) OBTAINED QUALIFYING EMPLOYMENT WITHIN ONE YEAR OF OBTAINING
SUCH DEGREE; (D) MAINTAINED QUALIFYING EMPLOYMENT  FOR  THE  PERIODS  OF
TIME ESTABLISHED IN SUBDIVISION FOUR OF THIS SECTION; AND (E) BE A RESI-
DENT OF THE STATE AT THE TIME OF EMPLOYMENT.
  3.  QUALIFYING EMPLOYMENT. FOR THE PURPOSES OF THIS SECTION, "QUALIFY-
ING EMPLOYMENT" SHALL MEAN ANY EMPLOYMENT, WITHIN THE STATE, BY A FEDER-
AL, STATE OR  MUNICIPAL  AGENCY,  ENTITY  OR  ORGANIZATION,  OR  WITH  A
NOT-FOR-PROFIT  ORGANIZATION  THAT  HAS BEEN DESIGNATED AS TAX-EXEMPT BY
THE INTERNAL REVENUE SERVICE IN ACCORDANCE WITH SECTION 501(C)(3) OF THE
INTERNAL REVENUE CODE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09131-02-5

S. 3924                             2

  4. AWARDS. AN ELIGIBLE APPLICANT SHALL RECEIVE AN AWARD OF  ONE  THOU-
SAND DOLLARS AFTER COMPLETION OF THIRTY-SIX MONTHS OF QUALIFYING EMPLOY-
MENT;  AN AWARD OF ONE THOUSAND FIVE HUNDRED DOLLARS AFTER COMPLETION OF
SIXTY MONTHS OF QUALIFYING EMPLOYMENT; AND  AN  AWARD  OF  TWO  THOUSAND
DOLLARS AFTER COMPLETION OF EIGHTY-FOUR MONTHS OF QUALIFYING EMPLOYMENT.
ALL  SUCH  AWARDS  SHALL  BE  APPLIED BY THE CORPORATION DIRECTLY TO THE
OUTSTANDING PRINCIPAL OF ONE OR MORE OF THE RECIPIENT'S COLLEGE LOANS OF
SUCH RECIPIENT'S CHOOSING.
  5. RULES AND REGULATIONS. THE CORPORATION IS AUTHORIZED TO PROMULGATE,
INCLUDING ON AN EMERGENCY BASIS, SUCH RULES AND REGULATIONS AS SHALL  BE
NECESSARY FOR THE IMPLEMENTATION OF THE PROVISIONS OF THIS SECTION.
  S 2. Subsection (c) of section 612 of the tax law is amended by adding
a new paragraph 42 to read as follows:
  (42) INTEREST ON INDEBTEDNESS INCURRED OR CONTINUED TO PAY TUITION AND
FEES  FOR UNDERGRADUATE EDUCATION TO THE EXTENT SUCH INTEREST IS DEDUCT-
IBLE, IN ACCORDANCE WITH 26 U.S.C. S 221, FOR FEDERAL TAX PURPOSES,  AND
ONLY  WHEN  THE TAXPAYER'S FEDERAL ADJUSTED GROSS INCOME IS SEVENTY-FIVE
THOUSAND DOLLARS OR LESS.
  S 3. This act shall take effect immediately; provided that if this act
shall become a law after April 1, 2015, section one of this act shall be
deemed to have been in full force and effect on and after April 1, 2015;
and provided, further, that section two of this act shall apply  to  the
tax year in which it takes effect, and all subsequent tax years.

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Senate Bill S3924

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Sponsored By

Jeffrey D. Klein