NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4515A
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.
STATE OF NEW YORK
________________________________________________________________________
4515--A
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.
LBD04743-03-4
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.
