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A04515 Summary:

COSPNSRJean-Pierre, Gunther, Simon, Vanel, Eachus
MLTSPNSRCook, Lupardo
Amd §9-w, Bank L
Relates to including information concerning repayment of outstanding loans in the standard financial aid award letter.
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A04515 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
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 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: 2023 referred to assembly banks PASSED SENATE 2022 referred to assembly banks 2021 PASSED SENATE 2021 referred to assembly banks 2020 PASSED SENATE 2020 referred to assembly banks 2019 PASSED SENATE 2019 referred to assembly banks A8450 of 2017-18   FISCAL IMPLICATIONS TO STATE AND LOCAL GOVERNMENTS: None.   EFFECTIVE DATE: This act shall take effect immediately.
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A04515 Text:

                STATE OF NEW YORK
                               2023-2024 Regular Sessions
                   IN ASSEMBLY
                                    February 16, 2023
        Introduced  by  M.  of A. ZEBROWSKI, JEAN-PIERRE, GUNTHER, SIMON, VANEL,
          EACHUS -- Multi-Sponsored by -- M. of A. COOK, LUPARDO  --  read  once
          and referred to the Committee on Banks -- recommitted to the Committee
          on  Banks  in  accordance  with  Assembly  Rule 3, sec. 2 -- committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee
        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 actual terms,  expected  repayment  schedule
    20  and  payoff amounts or, where such information is not available or fixed
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 4515--A                          2
     1  in the loan agreement, a standard ten year repayment  term  and  assumed
     2  interest rate on the current amount of outstanding loans including total
     3  expected payoff amount inclusive of principal and interest, and expected
     4  monthly  payment,  and  (f)  any  other information as determined by the
     5  superintendent in consultation with the president. Such standard  letter
     6  shall  include a glossary of standard terms and definitions used on such
     7  standard letter. The superintendent shall  publish  and  make  available
     8  such  standard letter by December thirty-first, two thousand fifteen and
     9  thereafter. Each college, vocational institution, and any other institu-
    10  tion that offers an approved program as defined in section  six  hundred
    11  one of the education law shall utilize the standard letter issued by the
    12  department  of  financial  services  in  responding to all undergraduate
    13  financial aid applicants for  the  two  thousand  sixteen--two  thousand
    14  seventeen academic year and thereafter. The superintendent shall promul-
    15  gate regulations implementing this section.
    16    § 2. This act shall take effect immediately.
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