S T A T E O F N E W Y O R K
________________________________________________________________________
2554--A
2017-2018 Regular Sessions
I N S E N A T E
January 13, 2017
___________
Introduced by Sens. LAVALLE, AKSHAR, HELMING, MURPHY -- read twice and
ordered printed, and when printed to be committed to the Committee on
Higher Education -- recommitted to the Committee on Higher Education
in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
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:
Section 1. Article 14 of the education law is amended by adding a new
part VI to read as follows:
PART VI
NEW YORK STUDENT AFFORDABLE REFINANCING
FOR TOMORROW PROGRAM (NEW START)
SECTION 694-C. DEFINITIONS.
694-D. NEW YORK STUDENT AFFORDABLE REFINANCING FOR TOMORROW
PROGRAM (NEW START)
694-E. PROGRAM ELIGIBILITY.
694-F. PROGRAM.
694-G. REPAYMENT.
§ 694-C. DEFINITIONS. FOR PURPOSES OF THIS PART, THE FOLLOWING TERMS
SHALL HAVE THE FOLLOWING MEANINGS: 1. "EDUCATION LOAN" SHALL MEAN ANY
STUDENT LOAN THAT THE STATE REFINANCES UNDER THE PROGRAM THAT WAS
OBTAINED BY A BORROWER FOR THE PURPOSES OF ATTENDING COLLEGE AT THE
STATE UNIVERSITY OF NEW YORK OR THE CITY UNIVERSITY OF NEW YORK,
PROVIDED, HOWEVER, THAT LOANS PROVIDED BY THE FEDERAL GOVERNMENT, OR
LOANS PROVIDED AT AN INTEREST RATE AT OR LOWER THAN THE CURRENT FEDERAL
LOAN INTEREST RATE SHALL NOT BE ELIGIBLE FOR REFINANCING UNDER THE
PROGRAM.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07977-03-8
S. 2554--A 2
2. "PARTICIPANT" SHALL MEAN AN INDIVIDUAL WHO HAS INCURRED STUDENT
LOAN DEBT FROM A LENDING INSTITUTION OR LENDER TO COVER THE COST OF
TUITION AT THE STATE UNIVERSITY OF NEW YORK OR THE CITY UNIVERSITY OF
NEW YORK AND HAS APPLIED TO PARTICIPATE AND BEEN ACCEPTED TO PARTICIPATE
IN THE PROGRAM.
3. "LENDING INSTITUTION" OR "LENDER" SHALL MEAN ANY ENTITY THAT HAS
ITSELF OR THROUGH AN AFFILIATE PROVIDED STUDENT LOANS TO AN ELIGIBLE
PARTICIPANT.
4. "PROGRAM" SHALL MEAN THE NEW YORK STUDENT AFFORDABLE REFINANCING
FOR TOMORROW PROGRAM (NEW START).
5. "FUND" SHALL MEAN THE NEW YORK AFFORDABLE REFINANCING FOR TOMORROW
PROGRAM FUND ESTABLISHED BY SECTION NINETY-NINE-BB OF THE STATE FINANCE
LAW.
§ 694-D. NEW YORK STUDENT AFFORDABLE REFINANCING FOR TOMORROW PROGRAM
(NEW START). THE NEW YORK STUDENT AFFORDABLE REFINANCING FOR TOMORROW
PROGRAM (NEW START) IS HEREBY ESTABLISHED FOR THE PURPOSES OF RELIEVING
STUDENT DEBT BY DIRECTLY PAYING AN ELIGIBLE PARTICIPANT'S LOAN DEBT TO
THE LENDING INSTITUTION OR LENDER AND PROVIDING A REPAYMENT PLAN WHEREBY
PAYMENTS WILL BE DEPOSITED IN THE FUND.
1. THE CORPORATION SHALL PROMULGATE RULES AND REGULATIONS FOR THE
ADMINISTRATION OF THIS PROGRAM AND SHALL MANAGE THE FUND IN CONSULTATION
WITH THE OFFICE OF THE COMPTROLLER.
2. THE CORPORATION SHALL DETERMINE ADDITIONAL REQUIREMENTS FOR ELIGI-
BLE PARTICIPANTS, OTHER THAN THOSE SPECIFIED IN SECTION SIX HUNDRED
NINETY-FOUR-E OF THIS PART, SHALL SET A FIXED INTEREST RATE FOR THE
REPAYMENT OF REFINANCED LOANS, WHICH SHALL BE LOWER THAN THE AVERAGE
MARKET RATE FOR PRIVATE STUDENT LOANS, AND SHALL ESTABLISH AN APPLICA-
TION PROCESS FOR THE PROGRAM.
3. THE CORPORATION SHALL DETERMINE APPROPRIATE PAYMENT DEFERMENT AND
FORBEARANCE OPTIONS FOR LOSS OF EMPLOYMENT OR EXTREME HARDSHIP.
§ 694-E. PROGRAM ELIGIBILITY. TO BE ELIGIBLE FOR THIS PROGRAM A
PARTICIPANT MUST:
1. HAVE GRADUATED FROM THE STATE UNIVERSITY OF NEW YORK OR THE CITY
UNIVERSITY OF NEW YORK WITHIN FOUR YEARS, OR FIVE YEARS IF ENROLLED IN A
PROGRAM NORMALLY REQUIRING FIVE YEARS;
2. HAVE GRADUATED WITH A GRADE POINT AVERAGE AT OR ABOVE 3.0;
3. HAVE INCURRED STUDENT LOAN DEBT;
4. BE GAINFULLY EMPLOYED FOR AT LEAST THREE MONTHS PRIOR TO FILING AN
APPLICATION TO PARTICIPATE IN THE PROGRAM;
5. AGREE TO SIGN A CONTRACT WITH THE CORPORATION TO ALLOW A DIRECT
WITHDRAWAL OF PAYMENTS FROM THEIR PAY CHECKS UNTIL THE DEBT OBLIGATION
IS PAID IN FULL; AND
6. MUST APPLY FOR THE PROGRAM WITHIN TWO YEARS AFTER COLLEGE GRADU-
ATION.
§ 694-F. PROGRAM. 1. THE CORPORATION SHALL MAKE LUMP SUM PAYMENTS TO
LENDING INSTITUTIONS OR LENDERS TO PAY ELIGIBLE PARTICIPANTS' EDUCATION
LOANS OUT OF THE FUNDS APPROPRIATED TO THE FUND FOR THE PURPOSES OF THIS
PROGRAM IN AMOUNTS NOT TO EXCEED THIRTY-FIVE THOUSAND DOLLARS PER
PARTICIPANT.
2. LOANS THAT THE PARTICIPANT ACQUIRED FROM THE FEDERAL GOVERNMENT OR
THOSE LOANS THAT HAVE A FIXED INTEREST RATE PROVIDED AT AN INTEREST RATE
AT OR LOWER THAN THE CURRENT FEDERAL LOAN INTEREST RATE SHALL NOT BE
ELIGIBLE FOR ACQUISITION UNDER THE PROGRAM.
§ 694-G. REPAYMENT. 1. PARTICIPANTS SHALL REPAY THE TOTAL COST OF THE
DEBT OBLIGATION TO THE FUND AT AN INTEREST RATE DETERMINED BY THE CORPO-
RATION ACCORDING TO THE FOLLOWING:
S. 2554--A 3
A. DURING THE FIRST FIVE YEARS OF PARTICIPATION IN THE PROGRAM, THE
PARTICIPANT SHALL PAY THREE PERCENT OF THE SALARY EARNED PER YEAR DURING
EACH OF THOSE YEARS;
B. DURING THE NEXT FIVE YEARS OF PARTICIPATION IN THE PROGRAM, THE
PARTICIPANT SHALL PAY FIVE PERCENT OF THE SALARY EARNED PER YEAR DURING
EACH OF THOSE YEARS;
C. DURING THE ELEVENTH YEAR OF PARTICIPATION AND EACH YEAR THEREAFTER
UNTIL THE DEBT OBLIGATION IS PAID IN FULL, THE PARTICIPANT SHALL PAY
EIGHT PERCENT OF THE SALARY EARNED PER YEAR DURING EACH OF THOSE YEARS.
2. THERE SHALL BE NO PRE-PAYMENT PENALTIES UNDER THE PROGRAM AND
REPAYMENT SCHEDULES MAY BE CALCULATED AT A HIGHER PERCENTAGE RATE PER
YEAR OF SALARY IF THE PARTICIPANT CHOOSES OR REQUESTS A FASTER RE-PAY-
MENT OPTION.
§ 2. The state finance law is amended by adding a new section 99-bb to
read as follows:
§ 99-BB. NEW YORK STUDENT AFFORDABLE REFINANCING FOR TOMORROW PROGRAM
FUND. 1. THERE IS HEREBY ESTABLISHED WITHIN THE CUSTODY OF THE NEW YORK
STATE HIGHER EDUCATION SERVICES CORPORATION, IN CONSULTATION WITH THE
STATE COMPTROLLER, OR HIS OR HER DESIGNEE, A FUND TO BE KNOWN AS THE NEW
YORK STUDENT AFFORDABLE REFINANCING FOR TOMORROW PROGRAM FUND.
2. ALL MONIES RECEIVED PURSUANT TO THE NEW YORK STUDENT AFFORDABLE
REFINANCING FOR TOMORROW PROGRAM (NEW START) SHALL BE DEPOSITED INTO THE
FUND AND SHALL BE MANAGED PURSUANT TO PART SIX OF ARTICLE FOURTEEN OF
THE EDUCATION LAW.
3. ALL NECESSARY RULES AND REGULATIONS FOR THE SUCCESSFUL ADMINIS-
TRATION, INVESTMENT AND MANAGEMENT OF SUCH FUND SHALL BE PROMULGATED BY
SUCH CORPORATION, IN CONSULTATION WITH THE STATE COMPTROLLER, OR HIS OR
HER DESIGNEE.
§ 3. This act shall take effect on the one hundred twentieth day after
it shall have become a law, provided, however, that effective immediate-
ly, the addition, amendment and/or repeal of any rule or regulation
necessary for the implementation of this act on its effective date are
authorized to be made and completed on or before such date.