|SAME AS||No Same As|
|COSPNSR||Ortiz, Jaffee, Jean-Pierre, Gunther, Simon, Raia, Mosley, Crespo, Vanel, Gjonaj, Blake, Galef, Harris|
|MLTSPNSR||Cook, Lupardo, Magee|
|Amd §9-w, Bank L|
|Relates to including information concerning repayment of outstanding loans in the standard financial aid award letter.|
|06/16/2017||referred to banks|
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NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8450 SPONSOR: Zebrowski (MS)
TITLE OF BILL: An act to amend the banking law, in relation to including information concerning repayment of outstanding loans in the standard financial aid award letter   PURPOSE OR GENERAL IDEA OF THE BILL: This bill will require standard financial aid award letters to include the estimated cost of repayment of all outstanding loans including expected monthly payments.   SUMMARY OF PROVISIONS: Section one of the bill amends section 9-W of the banking law as it relates to including additional information in the standard financial aid award letter. The standard financial aid award letter will include the estimated loan repayment for the student's outstanding loans using a standard ten year repayment term. Section two of the bill relates to the effective date.   JUSTIFICATION: Debt from student loans has continued to grow over the last two decades with an estimated $1.3 trillion in outstanding debt. The enhancements to annual financial aid award letter will provide students with detailed information on their repayment including the estimated monthly payment amount. The goal is to better educate students so they are prepared for the debt burden after they graduate. A similar program was started in Indiana University and resulted in a decrease in student borrowing of 16% in the first two years of implementation. This additional informa- tion will help students make informed decisions on their borrowing behavior by estimating their repayment options.   LEGISLATIVE HISTORY: New Bill.   FISCAL IMPLICATIONS TO STATE AND LOCAL GOVERNMENTS: Minimal.   EFFECTIVE DATE: This act shall take effect immediately.
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STATE OF NEW YORK ________________________________________________________________________ 8450 2017-2018 Regular Sessions IN ASSEMBLY June 16, 2017 ___________ Introduced by M. of A. ZEBROWSKI, ORTIZ, JAFFEE, JEAN-PIERRE, GUNTHER, SIMON, RAIA, MOSLEY, CRESPO, VANEL, SIMANOWITZ, GJONAJ, BLAKE, GALEF -- Multi-Sponsored by -- M. of A. COOK, LUPARDO, MAGEE -- read once and referred to the Committee on Banks AN ACT to amend the banking law, in relation to including information concerning repayment of outstanding loans in the standard financial aid award letter The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 9-w of the banking law, as amended by section 1 of 2 part CC of chapter 54 of the laws of 2016, is amended to read as 3 follows: 4 § 9-w. Standard financial aid award letter. The superintendent [ of5 financial services] in consultation with the president of the higher 6 education services corporation shall develop a standard financial aid 7 award letter which shall clearly delineate (a) the estimated cost of 8 attendance, including but not limited to, the cost of tuition and fees, 9 room and board, books, and transportation. Such standard letter shall 10 provide the estimated cost of attendance for the current academic year 11 as well as estimates for each academic year that the student would need 12 to attend to earn a degree at such institution with a disclaimer that 13 the cost of attendance for years other than the current academic year 14 are estimates and may be subject to change, (b) all financial aid 15 offered from the federal government, the state, and the institution with 16 an explanation as to which components will require repayment, (c) any 17 expected student and/or family contribution, (d) campus-specific gradu- 18 ation, median borrowing, and loan default rates, [ and] (e) the estimated 19 loan repayment impact using a standard ten year repayment term and 20 assumed interest rate on the current amount of outstanding loans includ- 21 ing total expected payoff amount inclusive of principal and interest, 22 and expected monthly payment, and (f) any other information as deter- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13073-01-7A. 8450 2 1 mined by the superintendent in consultation with the president. Such 2 standard letter shall include a glossary of standard terms and defi- 3 nitions used on such standard letter. The superintendent shall publish 4 and make available such standard letter by December thirty-first, two 5 thousand fifteen and thereafter. Each college, vocational institution, 6 and any other institution that offers an approved program as defined in 7 section six hundred one of the education law shall utilize the standard 8 letter issued by the department of financial services in responding to 9 all undergraduate financial aid applicants for the two thousand 10 sixteen--two thousand seventeen academic year and thereafter. The super- 11 intendent shall promulgate regulations implementing this section. 12 § 2. This act shall take effect immediately.