S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5182
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 7, 2019
                                ___________
 
 Introduced by M. of A. ARROYO -- read once and referred 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:
   § 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.
              

                                                            LBD06027-02-9

 A. 5182                             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

 A. 5182                             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.
   § 2. This act shall take effect on the ninetieth day  after  it  shall
 have become a law.