NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4515
SPONSOR: Zebrowski 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 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.
PRIOR LEGISLATIVE HISTORY:
A.5601 of 2021-22,
A.1932 of 2019-20,
A.8450 of 2017-18.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
4515
2023-2024 Regular Sessions
IN ASSEMBLY
February 16, 2023
___________
Introduced by M. of A. ZEBROWSKI, JEAN-PIERRE, GUNTHER, SIMON, VANEL --
Multi-Sponsored by -- M. of A. COOK, LUPARDO -- 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 [of
5 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-
23 mined by the superintendent in consultation with the president. Such
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04743-01-3
A. 4515 2
1 standard letter shall include a glossary of standard terms and defi-
2 nitions used on such standard letter. The superintendent shall publish
3 and make available such standard letter by December thirty-first, two
4 thousand fifteen and thereafter. Each college, vocational institution,
5 and any other institution that offers an approved program as defined in
6 section six hundred one of the education law shall utilize the standard
7 letter issued by the department of financial services in responding to
8 all undergraduate financial aid applicants for the two thousand
9 sixteen--two thousand seventeen academic year and thereafter. The super-
10 intendent shall promulgate regulations implementing this section.
11 § 2. This act shall take effect immediately.
