Relates to the truth in lending clearinghouse program and the student lending transparency program.
Ayes (63): Adams, Addabbo, Avella, Ball, Bonacic, Boyle, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Espaillat, Farley, Felder, Flanagan, Fuschillo, Gallivan, Gianaris, Gipson, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Hoylman, Kennedy, Klein, Krueger, Lanza, Larkin, Latimer, LaValle, Libous, Little, Marcellino, Marchione, Martins, Maziarz, Montgomery, Nozzolio, O'Brien, O'Mara, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Sampson, Sanders, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Tkaczyk, Valesky, Young, Zeldin
TITLE OF BILL: An act to amend the financial services law, in relation to the truth in student lending clearinghouse program; and to amend the financial services law and the education law, in relation to the student lending transparency program
PURPOSE: To establish the Student Lending Transparency Program to require the Department of Financial Services to compile data on student loans and make certain information available to the public.
SUMMARY OF PROVISIONS:
Section 1. Amends paragraphs 6 and 7 of subsection (c) of section 301 of the financial services law to authorize the Superintendent to establish and administer the "Student Lending Transparency Program.
Section 2. Amends the financial services law to create a new article 6 to establish the student lending transparency program.
Section 3. Amends section 655 of the education law to add a new subdivision 13 to create a link on the Higher Education Services Corporation's website to the Department of Financial Services' website.
Section 4. Amends the education law to add a new article 14-b to establish the student lending transparency program to ensure that colleges provide the most accurate and transparent information with regard to student loans.
Section 5. Sets forth the effective date.
JUSTIFICATION: This bill would add a new article 6 to the financial services law, and a new article 14-b to the education law, to establish a Student Lending Transparency Program. Pursuant to this program, the Department of Financial Services would be required to compile data on student loans for the purpose of comparing loan rates and repayment plans. The superintendent would be required to take such data and create a list of private lenders who provide the best loan rates and repayment options on student loans and place such list on an easily accessible website with links to the Higher Education Services Corporation's website as well as the websites of other colleges and universities. The list and the website maintained by the department would be updated monthly.
Additionally, colleges and universities would be required to provide prospective and newly enrolled students with clearly outlined and easy to understand information pertaining to the total cost of attendance at their institution. Such information would include the total amount of debt the student would incur and the approximate monthly bill the student would be required to pay upon graduation.
LEGISLATIVE HISTORY: This bill was included as part C of the college affordability package, S.7449A of 2012.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect on the 180th day after it shall have become law.
STATE OF NEW YORK ________________________________________________________________________ 4598 2013-2014 Regular Sessions IN SENATE April 12, 2013 ___________Introduced by Sen. LAVALLE -- read twice and ordered printed, and when printed to be committed to the Committee on Banks AN ACT to amend the financial services law, in relation to the truth in student lending clearinghouse program; and to amend the financial services law and the education law, in relation to the student lending transparency program THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraphs 6 and 7 of subsection (c) of section 301 of the financial services law are amended and a new paragraph 8 is added to read as follows: (6) providing technical assistance to local governments and not-for- profits in the development of consumer protection measures with respect to financial products and services;
[and](7) continuing and expanding the detection, investigation and prevention of insurance fraud [.]; AND (8) ESTABLISHING AND ADMINISTERING THE "STUDENT LENDING TRANSPARENCY PROGRAM" PURSUANT TO ARTICLE SIX OF THIS CHAPTER. S 2. The financial services law is amended by adding a new article 6 to read as follows: ARTICLE 6 STUDENT LENDING TRANSPARENCY PROGRAM SECTION 601. DEFINITIONS. 602. STUDENT LENDING TRANSPARENCY PROGRAM. 603. RULES AND REGULATIONS. S 601. DEFINITIONS. THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEAN- INGS WHEN USED IN THIS ARTICLE: A. "PRIVATE STUDENT LOANS" SHALL MEAN A PRIVATE LOAN ISSUED BY A PRIVATE LENDING INSTITUTION FOR THE PURPOSES OF PAYING FOR OR FINANCING HIGHER EDUCATION EXPENSES.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD09564-01-3 S. 4598 2
B. "PRIVATE LENDING INSTITUTIONS" OR "PRIVATE LENDERS" SHALL MEAN ANY PRIVATE ENTITY THAT ITSELF OR THROUGH AN AFFILIATE MAKES AVAILABLE STUDENT LOANS TO PAY FOR OR FINANCE HIGHER EDUCATION EXPENSES. C. "STUDENT BORROWER" SHALL MEAN ANY INDIVIDUAL WHO BORROWS MONEY FROM A PRIVATE LENDING INSTITUTION TO FINANCE HIGHER EDUCATION EXPENSES. D. "HIGHER EDUCATION EXPENSES" SHALL INCLUDE THE FOLLOWING: (I) TUITION AND FEES; (II) BOOKS AND SUPPLIES; AND (III) ROOM AND BOARD. S 602. STUDENT LENDING TRANSPARENCY PROGRAM. 1. THE SUPERINTENDENT SHALL ESTABLISH A PROGRAM TO COMPILE DATA RELATED TO PRIVATE STUDENT LOANS FOR THE PURPOSE OF COMPARING PRIVATE LENDING INSTITUTION'S STUDENT LOAN INTEREST RATES AND REPAYMENT PLANS, INCLUDING POLICIES RELATING TO DEFERMENT AND FORBEARANCE, DEFAULT POLICIES AND PENALTIES, AND ANY OTHER INFORMATION THAT THE SUPERINTENDENT DEEMS RELEVANT FOR THE PURPOSE OF CREATING A LIST OF PRIVATE LENDERS WHO PROVIDE THE LOWEST RATES AND BEST REPAYMENT OPTIONS ON STUDENT LOANS. SUCH LIST SHALL BE CREATED AND MAIN- TAINED BY THE SUPERINTENDENT OR HIS DESIGNEE AND SHALL BE PLACED ON AN EASILY ACCESSIBLE WEBSITE THAT SHALL BE MADE AVAILABLE TO BE LINKED TO THE WEBSITE OF THE HIGHER EDUCATION SERVICES CORPORATION PURSUANT TO SUBDIVISION THIRTEEN OF SECTION SIX HUNDRED FIFTY-FIVE OF THE EDUCATION LAW AND TO COLLEGES AND UNIVERSITIES WEBSITES PURSUANT TO ARTICLE FOUR- TEEN-B OF THE EDUCATION LAW. 2. SUCH WEBSITE SHALL BE UPDATED ON A MONTHLY BASIS TO ENSURE THAT THE STUDENT LOAN INFORMATION IS CURRENT AND ACCURATE. THE SUPERINTENDENT OR HIS OR HER DESIGNEE SHALL COMPILE A LIST OF THE TOP TEN BEST PRIVATE LENDING INSTITUTIONS BASED UPON RATES AND POLICIES THAT ARE MOST FAVORA- BLE TO THE STUDENT BORROWER. THE SUPERINTENDENT MAY ALSO CONSIDER THE PRIVATE LENDING INSTITUTIONS POLICIES FOR ALLOWING A STUDENT BORROWER TO BORROW MORE THAN TEN PERCENT OVER SUCH STUDENT BORROWER'S TOTAL COST OF HIGHER EDUCATION EXPENSES WHEN DETERMINING IF A PRIVATE LENDING INSTITU- TION SHOULD BE PLACED ON SUCH LIST. INFORMATION PERTAINING TO LENDING INSTITUTIONS THAT DO NOT MAKE THE TOP TEN LIST SHALL ALSO BE POSTED ON SUCH WEBSITE AND THOSE LENDING INSTITUTIONS THAT PROVIDE THE WORST RATES AND STRICTEST REPAYMENT OPTIONS SHALL BE CLEARLY INDICATED. S 603. RULES AND REGULATIONS. THE SUPERINTENDENT SHALL PROMULGATE ALL RULES AND REGULATIONS NECESSARY FOR THE IMPLEMENTATION OF THIS ARTICLE. S 3. Section 655 of the education law is amended by adding a new subdivision 13 to read as follows: 13. TO CREATE A LINK ON THE CORPORATION'S WEBSITE TO THE DEPARTMENT OF FINANCIAL SERVICES WEBSITE PURSUANT TO SUBDIVISION ONE OF SECTION SIX HUNDRED TWO OF THE FINANCIAL SERVICES LAW. S 4. The education law is amended by adding a new article 14-B to read as follows: ARTICLE 14-B STUDENT LENDING TRANSPARENCY PROGRAM SECTION 697. CREATION OF PROGRAM. 698. ACCESS TO INFORMATION. 699. LINKS TO DEPARTMENT OF FINANCIAL SERVICES. S 697. CREATION OF PROGRAM. THE STUDENT LENDING TRANSPARENCY PROGRAM IS HEREBY ESTABLISHED TO ENSURE THAT NEW YORK STATE COLLEGES PROVIDE THE MOST ACCURATE AND TRANSPARENT INFORMATION WITH REGARD TO STUDENT LOANS. S 698. ACCESS TO INFORMATION. NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION TO THE CONTRARY, NEW YORK STATE COLLEGES AS DEFINED IN SECTION SIX HUNDRED ONE OF ARTICLE THIRTEEN OF THE EDUCATION LAW, SHALL BE REQUIRED THROUGH THEIR FINANCIAL AID OFFICES TO PROVIDE TO PROSPEC-S. 4598 3
TIVE OR NEWLY ACCEPTED STUDENTS AND PARENTS CLEARLY OUTLINED AND EASY TO UNDERSTAND INFORMATION PERTAINING TO THE TOTAL COST OF ATTENDANCE AT THEIR INSTITUTION, THE APPROXIMATE OR ACTUAL TOTAL AMOUNT OF FINANCIAL AID THEY WOULD RECEIVE FROM SUCH INSTITUTION AND THE APPROXIMATE OR ACTUAL TOTAL AMOUNT OF STUDENT LOAN DEBT THEY WOULD ACCUMULATE OVER THE COURSE OF FOUR YEARS IF THEY ATTENDED SUCH COLLEGE. THE INFORMATION PROVIDED MUST ALSO INCLUDE STUDENT LOAN RATES, INFORMATION ON REPAYMENT PLANS AND DEFAULT RATES AND THE ACTUAL COST OF THE AVERAGE MONTHLY PAYMENT THAT WOULD BE REQUIRED UPON GRADUATION WHEN SUCH LOANS WOULD BECOME DUE. S 699. LINKS TO DEPARTMENT OF FINANCIAL SERVICES. NEW YORK STATE COLLEGES THAT MAINTAIN AN OFFICIAL COLLEGE WEBSITE SHALL ALSO BE REQUIRED TO ADD A LINK ON EACH OF THEIR WEBSITES TO THE DEPARTMENT OF FINANCIAL SERVICES WEBSITE ON STUDENT LENDING TRANSPARENCY CREATED PURSUANT TO ARTICLE SIX OF THE FINANCIAL SERVICES LAW. S 5. This act shall take effect on the one hundred eightieth day after it shall have become a law.