NY State Senate Bill 2015-S4624

Senate Bill S4624

2015-2016 Legislative Session

Create an income driven repayment plan for private student loans held by New York state banking institutions

download bill text pdf

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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2016	referred to higher education
Apr 01, 2015	referred to higher education

2015-S4624 (ACTIVE) - Details

See Assembly Version of this Bill:: A6605
Current Committee:: Senate Higher Education
Law Section:: Education Law
Laws Affected:: Add §681-b, Ed L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S3411, A7318
2019-2020: S4893, A5182
2021-2022: S5216
2023-2024: S6372

2015-S4624 (ACTIVE) - Summary

Creates an income driven repayment plan for private student loans held by New York state banking institutions.

2015-S4624 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S4624

TITLE OF BILL:  An act to amend the education law, in relation to
creating an income driven repayment plan for private student loans
held by New York state banking institutions

PURPOSE OR GENERAL IDEA OF BILL:

Help recent college graduates who cannot find a job or are on a
limited income who are required to begin making payments on their
student loans immediately following graduation.

Modeled after President Obama's Income Driven Repayment Plans for
Federal Student Loans. Sets a monthly student loan payment at an
amount that is intended to be affordable based on income and family
size. Monthly payments are based on income and family size which may
result in no monthly payment.

SUMMARY OF SPECIFIC PROVISIONS:

This legislation amends the Education Law, in relation to creating an
income driven repayment plan for private student loans held by New
York State banking institutions.

This bill amends the Education Law by adding an income based repayment
plan. An eligible student loan is any outstanding loan made by a

private lender through a New York banking institution to a student who
is a resident of New York State and has attended an institution in New
York State or is a parent of such a student. It sets a monthly payment
at an amount that is income related based on the household income and
family size. The required payment under this plan must be lesser than
what it would otherwise be paid under the Standard Repayment Plan with
a ten year repayment period. Partial financial hardship shall mean
circumstances in which at the time the borrower files an individual
state tax return, the annual amount due on all the borrower's eligible
loans or at the time the borrower elects the income based repayment
plan, exceeds fifteen percent of the difference between the borrower's
AGI and one hundred fifty percent of the poverty guidelines for the
borrower's family size. The commissioner will make the determination
as to whether a borrower qualifies for partial hardship based on
disclosure of the AGI and other tax information as well as annually
certifying the borrower's family size. A borrower's aggregate income
based monthly loan payment may fluctuate, that is increase or decrease
annually based on changes to the AGI and family size.

To qualify for loan forgiveness after the ten years, a borrower must
have participated in the income based repayment plan and while
employed full time will have made one hundred twenty on-time and
separate monthly payments beginning October 1st, 2007, on the loans
for which forgiveness requalifies. Any amount that is forgiven may be
subject to the New York state income tax if there is a balance
remaining at the end of the repayment period.

JUSTIFICATION:

It is known that currently over seventy percent of students take out a
student loan so that they can attend college. A college graduate has


an average debt of $30,000.00. Student loan debt can be a road block
preventing a graduate from purchasing a home, purchasing a car,
building a savings for retirement forcing many students to reside with
their parents longer than they initially expected. This can also lead
to possible garnished wages and income tax returns seized by the
government or money taken from Social Security checks.

Statistics show over 40 million Americans have incurred a student loan
debt. Recent studies show that 1 out of every 7 students default on
their student loan within three years of beginning repayment. Many
recent college graduates find themselves to be underemployed
immediately following graduation. Securing a job becomes increasingly
difficult for recent graduates. For some if they do find a job they
are restricted to a low wage position or sometimes even working a part
time job. Statistics show the 56% of recent college graduates are
underemployed and working only on a part time basis. Education majors
and health majors have the lowest unemployment rate at 3 to 4%.
Architecture and construction majors have an unemployment rate of 8%.
Liberal arts and social sciences major face a 7 to 8% unemployment
rate. Studies show that for technology majors only 38% are working in
a job that required a bachelor's degree. Among communication, liberal
arts, business, and social sciences majors only 40 to 45% were working
in jobs that required a bachelor's degree.

A survey conducted on workers who graduated in the past 2 years showed
many recent graduates to hold a large amount of debt from their
student loans and are in jobs that do not require a college degree.
Only 53% of graduates were able to get a full time position in their
field of study. There is also a gap in regards to anticipated earning
upon graduation versus their actual salary. Fifteen percent of
graduates think they will earn less than $25,000.00 a year while one a
third of recent college graduates make that amount or less than that
amount. It's estimated that for borrowers who started repayment in
2011 650,000 have already defaulted on their student loans by 2013.

PRIOR LEGISLATIVE HISTORY:

None

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None

EFFECTIVE DATE:

This act shall take effect on the ninetieth day after it shall become
law.

2015-S4624 (ACTIVE) - Bill Text download pdf

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

                                  4624

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                              April 1, 2015
                               ___________

Introduced  by  Sen.  PARKER -- 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  creating  an  income
  driven repayment plan for private student loans held by New York state
  banking institutions

  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  681-b
to read as follows:
  S  681-B. INCOME-BASED REPAYMENT PLAN. 1. DEFINITIONS. AS USED IN THIS
SECTION:
  (A) "ADJUSTED GROSS INCOME" OR "AGI" SHALL  MEAN  THE  ADJUSTED  GROSS
INCOME  AS  REPORTED ON THE BORROWER'S LATEST AVAILABLE STATE INCOME TAX
RETURN SUBJECT TO ANY SUBSEQUENT AMENDMENTS OR REVISIONS. FOR A  MARRIED
BORROWER,  FILING JOINTLY, AGI INCLUDES BOTH THE BORROWER'S AND SPOUSE'S
INCOME. FOR A MARRIED BORROWER FILING SEPARATELY, AGI INCLUDES ONLY  THE
BORROWER'S INCOME.
  (B)  "ELIGIBLE LOAN" SHALL MEAN ANY OUTSTANDING LOAN MADE BY A PRIVATE
LENDER THROUGH A NEW YORK BANKING INSTITUTION TO  A  STUDENT  WHO  IS  A
RESIDENT OF AND HAS ATTENDED AN INSTITUTION IN THIS STATE OR A PARENT OF
SUCH A STUDENT.
  (C) "FAMILY SIZE" SHALL MEAN THE NUMBER THAT IS DETERMINED BY COUNTING
THE  BORROWER,  THE  BORROWER'S  SPOUSE,  AND  THE  BORROWER'S CHILDREN,
INCLUDING UNBORN CHILDREN WHO WILL BE BORN DURING THE YEAR THE  BORROWER
CERTIFIES  FAMILY  SIZE,  IF  THE  CHILDREN RECEIVE MORE THAN HALF THEIR
SUPPORT FROM THE BORROWER. A BORROWER'S FAMILY SIZE INCLUDES OTHER INDI-
VIDUALS IF, AT THE TIME THE BORROWER CERTIFIES FAMILY  SIZE,  THE  OTHER
INDIVIDUALS:
  (I) LIVE WITH THE BORROWER; AND
  (II)  RECEIVE  MORE THAN HALF THEIR SUPPORT FROM THE BORROWER AND WILL
CONTINUE TO RECEIVE THIS SUPPORT FROM THE  BORROWER  FOR  THE  YEAR  THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09842-01-5

S. 4624                             2

BORROWER  CERTIFIES  FAMILY  SIZE. SUPPORT INCLUDES MONEY, GIFTS, LOANS,
HOUSING, FOOD, CLOTHES, CARE, MEDICAL AND DENTAL CARE,  AND  PAYMENT  OF
COLLEGE COSTS.
  (D) "PARTIAL FINANCIAL HARDSHIP" SHALL MEAN A CIRCUMSTANCE IN WHICH:
  (I) FOR AN UNMARRIED BORROWER OR A MARRIED BORROWER WHO FILES AN INDI-
VIDUAL  STATE  TAX  RETURN,  THE ANNUAL AMOUNT DUE ON ALL THE BORROWER'S
ELIGIBLE LOANS, AS CALCULATED UNDER A TEN-YEAR STANDARD  REPAYMENT  PLAN
USING  THE  GREATER OF THE AMOUNT DUE AT THE TIME THE BORROWER INITIALLY
ENTERED REPAYMENT OR AT THE TIME THE BORROWER  ELECTS  THE  INCOME-BASED
REPAYMENT  PLAN,  EXCEEDS  FIFTEEN PERCENT OF THE DIFFERENCE BETWEEN THE
BORROWER'S AGI AND ONE HUNDRED FIFTY PERCENT OF  THE  POVERTY  GUIDELINE
FOR THE BORROWER'S FAMILY SIZE; OR
  (II)  FOR  A MARRIED BORROWER WHO FILES A STATE TAX RETURN WITH HIS OR
HER SPOUSE, THE ANNUAL AMOUNT DUE ON  ALL  OF  THE  BORROWER'S  ELIGIBLE
LOANS  AND,  IF  APPLICABLE,  THE SPOUSE'S ELIGIBLE LOANS, AS CALCULATED
UNDER A TEN-YEAR STANDARD REPAYMENT  PLAN,  USING  THE  GREATER  OF  THE
AMOUNT  DUE  AT THE TIME THE LOANS INITIALLY ENTERED REPAYMENT OR AT THE
TIME THE BORROWER OR SPOUSE  ELECTS  THE  INCOME-BASED  REPAYMENT  PLAN,
EXCEEDS  FIFTEEN  PERCENT  OF  THE DIFFERENCE BETWEEN THE BORROWER'S AND
SPOUSE'S AGI, AND ONE HUNDRED FIFTY PERCENT OF THE POVERTY GUIDELINE FOR
THE BORROWER'S FAMILY SIZE.
  (E) "POVERTY GUIDELINE" SHALL MEAN THE INCOME CATEGORIZED BY THE STATE
AND FAMILY SIZE IN THE POVERTY  GUIDELINES  PUBLISHED  ANNUALLY  BY  THE
UNITED  STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES AND POSTED ON THE
NEW YORK STATE DEPARTMENT OF HEALTH'S WEBSITE.
  2. QUALIFICATIONS. (A) THE  COMMISSIONER  SHALL  DETERMINE  WHETHER  A
BORROWER   HAS   A   PARTIAL  FINANCIAL  HARDSHIP  TO  QUALIFY  FOR  THE
INCOME-BASED REPAYMENT PLAN FOR THE YEAR THE BORROWER SELECTS  THE  PLAN
AND  FOR  EACH SUBSEQUENT YEAR THAT THE BORROWER REMAINS ON THE PLAN. TO
MAKE THIS DETERMINATION, THE COMMISSIONER SHALL REQUIRE THE BORROWER TO:
  (I)(A) PROVIDE WRITTEN CONSENT FOR THE DISCLOSURE OF THE AGI AND OTHER
TAX RETURN INFORMATION BY THE DEPARTMENT OF TAXATION AND FINANCE TO  THE
COMMISSIONER.  THE  BORROWER  SHALL PROVIDE CONSENT BY SIGNING A CONSENT
FORM AND RETURNING IT TO THE COMMISSIONER;
  (B) IF A BORROWER'S AGI IS NOT AVAILABLE OR THE COMMISSIONER  BELIEVES
THAT THE BORROWER'S REPORTED AGI DOES NOT REASONABLY REFLECT THE BORROW-
ER'S  CURRENT  INCOME,  THE  COMMISSIONER  MAY  USE  OTHER DOCUMENTATION
PROVIDED BY THE BORROWER TO VERIFY INCOME; AND
  (II) ANNUALLY CERTIFY THE BORROWER'S  FAMILY  SIZE.  IF  THE  BORROWER
FAILS  TO CERTIFY FAMILY SIZE, THE COMMISSIONER ASSUMES A FAMILY SIZE OF
ONE FOR THAT YEAR.
  (B) A BORROWER'S AGGREGATE MONTHLY LOAN PAYMENT BASED ON  THE  BORROW-
ER'S  INCOME-BASED  REPAYMENT PLAN MAY INCREASE OR DECREASE ANNUALLY DUE
TO CHANGES IN THE BORROWER'S AGI AND FAMILY SIZE.
  3. TERMS OF REPAYMENT PLAN. (A) A BORROWER MAY SELECT THE INCOME-BASED
REPAYMENT PLAN ONLY IF THE BORROWER HAS A  PARTIAL  FINANCIAL  HARDSHIP.
THE  BORROWER'S  AGGREGATE  MONTHLY LOAN PAYMENTS ARE LIMITED TO NO MORE
THAN THE ANNUAL AMOUNT DUE BASED ON A TEN-YEAR STANDARD REPAYMENT  PERI-
OD.
  (B) IF A BORROWER'S AGGREGATE MONTHLY LOAN PAYMENTS BECOME LARGER THAN
THOSE  CALCULATED  ON  A  TEN-YEAR STANDARD REPAYMENT PLAN, A BORROWER'S
AGGREGATE MONTHLY LOAN PAYMENT SHALL NO LONGER BE  CALCULATED  ACCORDING
TO  THE BORROWER'S AGI AND FAMILY SIZE. THE BORROWER'S AGGREGATE MONTHLY
LOAN PAYMENT WILL BE CALCULATED UNDER THE  TEN-YEAR  STANDARD  REPAYMENT
PLAN,  THE  AMOUNT  OF  WHICH SHALL BE EQUAL TO THE BORROWER'S AGGREGATE

S. 4624                             3

MONTHLY LOAN PAYMENT AT THE TIME THE  BORROWER  INITIALLY  SELECTED  THE
INCOME-BASED REPAYMENT PLAN.
  4.  LOAN  FORGIVENESS.  (A)  TO QUALIFY FOR LOAN FORGIVENESS AFTER TEN
YEARS, A BORROWER MUST HAVE PARTICIPATED IN THE  INCOME-BASED  REPAYMENT
PLAN AND SATISFIED THE FOLLOWING CONDITIONS DURING THAT PERIOD:
  (I)  WHILE  EMPLOYED  FULL  TIME, THE BORROWER MADE ONE HUNDRED TWENTY
ON-TIME AND SEPARATE MONTHLY PAYMENTS AFTER OCTOBER FIRST, TWO  THOUSAND
SEVEN ON THE LOANS WHICH THE BORROWER IS REQUESTING TO BE FORGIVEN.
  (II) ALL PAYMENTS MUST HAVE BEEN MADE NO LATER THAN FIFTEEN DAYS AFTER
THE  REQUIRED  DUE  DATE  AND MUST HAVE BEEN PAID FOR THE FULL SCHEDULED
AMOUNT.
  (B) ANY AMOUNT THAT IS FORGIVEN MAY  BE  SUBJECT  TO  NEW  YORK  STATE
INCOME  TAX  IF THERE IS A BALANCE REMAINING AT THE END OF THE REPAYMENT
PERIOD.
  S 2. This act shall take effect on the ninetieth day  after  it  shall
have become a law.

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