S07791 Summary:

BILL NOS07791
 
SAME ASNo same as
 
SPONSORLAVALLE
 
COSPNSR
 
MLTSPNSR
 
Add Art 14 Part VI SS694-c - 694-g, Ed L; add S99-w, St Fin L
 
Establishes the New York student affordable refinancing for tomorrow program (New START).
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S07791 Actions:

BILL NOS07791
 
06/09/2014REFERRED TO HIGHER EDUCATION
06/11/2014COMMITTEE DISCHARGED AND COMMITTED TO RULES
06/11/2014ORDERED TO THIRD READING CAL.1360
06/12/2014PASSED SENATE
06/12/2014DELIVERED TO ASSEMBLY
06/12/2014referred to higher education
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S07791 Floor Votes:

There are no votes for this bill in this legislative session.
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S07791 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          7791
 
                    IN SENATE
 
                                      June 9, 2014
                                       ___________
 
        Introduced  by  Sen. LAVALLE -- read twice and ordered printed, and when
          printed to be committed to the Committee on Higher Education
 
        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:
 
     1    Section  1. Article 14 of the education law is amended by adding a new
     2  part VI to read as follows:
     3                                    PART VI
     4                   NEW YORK STUDENT AFFORDABLE REFINANCING
     5                      FOR TOMORROW PROGRAM (New START)
     6  Section 694-c. Definitions.
     7          694-d. New York  student  affordable  refinancing  for  tomorrow
     8                   program (New START)
     9          694-e. Program eligibility.
    10          694-f. Program.
    11          694-g. Repayment.
    12    §  694-c.  Definitions. For purposes of this part, the following terms
    13  shall have the following meanings:  1. "Education loan" shall  mean  any

    14  student  loan  that  the  state  refinances  under  the program that was
    15  obtained by a borrower for the purposes  of  attending  college  at  the
    16  state  university  of  New  York  or  the  city  university of New York,
    17  provided, however, that loans provided by  the  federal  government,  or
    18  loans  provided at an interest rate at or lower than the current federal
    19  loan interest rate shall not  be  eligible  for  refinancing  under  the
    20  program.
    21    2.  "Participant"  shall  mean  an individual who has incurred student
    22  loan debt from a lending institution or lender  to  cover  the  cost  of
    23  tuition  at  the  state university of New York or the city university of
    24  New York and has applied to participate and been accepted to participate

    25  in the program.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14210-01-4

        S. 7791                             2
 
     1    3. "Lending institution" or "lender" shall mean any  entity  that  has
     2  itself  or  through  an  affiliate provided student loans to an eligible
     3  participant.
     4    4.  "Program"  shall  mean the New York student affordable refinancing
     5  for tomorrow program (New START).
     6    5. "Fund" shall mean the New York affordable refinancing for  tomorrow
     7  program  fund  established  by section ninty-nine-w of the state finance
     8  law.

     9    § 694-d. New York student affordable refinancing for tomorrow  program
    10  (New  START).   The New York student affordable refinancing for tomorrow
    11  program (New START) is hereby established for the purposes of  relieving
    12  student  debt  by directly paying an eligible participant's loan debt to
    13  the lending institution or lender and providing a repayment plan whereby
    14  payments will be deposited in the fund.
    15    1. The corporation shall promulgate  rules  and  regulations  for  the
    16  administration of this program and shall manage the fund in consultation
    17  with the office of the comptroller.
    18    2.  The corporation shall determine additional requirements for eligi-
    19  ble participants, other than those  specified  in  section  six  hundred

    20  ninety-four-e  of  this  part,  shall  set a fixed interest rate for the
    21  repayment of refinanced loans, which shall be  lower  than  the  average
    22  market  rate  for private student loans, and shall establish an applica-
    23  tion process for the program.
    24    3. The corporation shall determine appropriate payment  deferment  and
    25  forbearance options for loss of employment or extreme hardship.
    26    §  694-e.  Program  eligibility.  1. To be eligible for this program a
    27  participant must:
    28    a. have graduated from the state university of New York  or  the  city
    29  university of New York within four years, or five years if enrolled in a
    30  program normally requiring five years;
    31    b. have graduated with a grade point average at or above 3.0;

    32    c. have incurred student loan debt;
    33    d.  be gainfully employed for at least three months prior to filing an
    34  application to participate in the program;
    35    e. agree to sign a contract with the corporation  to  allow  a  direct
    36  withdrawal  of  payments from their pay checks until the debt obligation
    37  is paid in full; and
    38    f. must apply for the program within two years  after  college  gradu-
    39  ation.
    40    §  694-f.  Program. 1. The corporation shall make lump sum payments to
    41  lending institutions or lenders to pay eligible participants'  education
    42  loans out of the funds appropriated to the fund for the purposes of this
    43  program  in  amounts  not  to  exceed  thirty-five  thousand dollars per
    44  participant.

    45    2. Loans that the participant acquired from the federal government  or
    46  those loans that have a fixed interest rate provided at an interest rate
    47  at  or  lower  than  the current federal loan interest rate shall not be
    48  eligible for acquisition under the program.
    49    § 694-g. Repayment. 1. Participants shall repay the total cost of  the
    50  debt obligation to the fund at an interest rate determined by the corpo-
    51  ration according to the following:
    52    a.  During  the  first five years of participation in the program, the
    53  participant shall pay three percent of the salary earned per year during
    54  each of those years;

        S. 7791                             3
 

     1    b. During the next five years of participation  in  the  program,  the
     2  participant  shall pay five percent of the salary earned per year during
     3  each of those years;
     4    c.  During the eleventh year of participation and each year thereafter
     5  until the debt obligation is paid in full,  the  participant  shall  pay
     6  eight percent of the salary earned per year during each of those years.
     7    2.  There  shall  be  no  pre-payment  penalties under the program and
     8  repayment schedules may be calculated at a higher  percentage  rate  per
     9  year  of  salary if the participant chooses or requests a faster re-pay-
    10  ment option.
    11    § 2. The state finance law is amended by adding a new section 99-w  to
    12  read as follows:

    13    §  99-w.  New York student affordable refinancing for tomorrow program
    14  fund. 1. There is hereby established within the custody of the New  York
    15  state  higher  education  services corporation, in consultation with the
    16  state comptroller, or his or her designee, a fund to be known as the New
    17  York student affordable refinancing for tomorrow program fund.
    18    2. All monies received pursuant to the  New  York  student  affordable
    19  refinancing for tomorrow program (New START) shall be deposited into the
    20  fund  and  shall  be managed pursuant to part six of article fourteen of
    21  the education law.
    22    3. All necessary rules and regulations  for  the  successful  adminis-
    23  tration,  investment and management of such fund shall be promulgated by

    24  such corporation, in consultation with the state comptroller, or his  or
    25  her designee.
    26    § 3. This act shall take effect on the one hundred twentieth day after
    27  it shall have become a law, provided, however, that effective immediate-
    28  ly,  the  addition,  amendment  and/or  repeal of any rule or regulation
    29  necessary for the implementation of this act on its  effective  date  is
    30  authorized to be made and completed on or before such date.
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