Establishes, within the New York state higher education services corporation, the New York state college graduate loan forgiveness incentive program; such program provides awards to residents of the state who received a bachelor or graduate degree from a college or university in the state, and who subsequently are employed by a governmental or not-for profit agency for certain periods of time; awards shall be used to pay down the principal on the recipient's outstanding college loans; and establishes a reduction of federal adjusted gross income, for state personal income tax purposes, for interest paid on undergraduate college loans for taxpayers earning $75,000 or less.
STATE OF NEW YORK
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3924
2015-2016 Regular Sessions
IN SENATE
February 20, 2015
___________
Introduced by Sen. KLEIN -- read twice and ordered printed, and when
printed to be committed to the Committee on Higher Education
AN ACT to amend the education law, in relation to establishing the New
York state college graduate loan forgiveness incentive program; and to
amend the tax law, in relation to reducing federal adjusted gross
income, for purposes of state personal income taxes, by the amount of
interest on indebtedness incurred for tuition and fees paid for under-
graduate education
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The education law is amended by adding a new section 679-g
2 to read as follows:
3 § 679-g. New York state college graduate loan forgiveness incentive
4 program. 1. Purpose. The president shall grant student loan forgiveness
5 awards for the purpose of alleviating the burden of student loan indebt-
6 edness for residents who have graduated from college.
7 2. Eligibility. To be eligible for an award pursuant to this section,
8 an applicant shall: (a) have graduated and obtained a bachelor's or
9 graduate degree during the two thousand fifteen -- two thousand sixteen
10 or any subsequent academic year from a college or university located
11 within the state; (b) have an outstanding loan debt from obtaining such
12 degree; (c) obtained qualifying employment within one year of obtaining
13 such degree; (d) maintained qualifying employment for the periods of
14 time established in subdivision four of this section; and (e) be a resi-
15 dent of the state at the time of employment.
16 3. Qualifying employment. For the purposes of this section, "qualify-
17 ing employment" shall mean any employment, within the state, by a feder-
18 al, state or municipal agency, entity or organization, or with a not-
19 for-profit organization that has been designated as tax-exempt by the
20 Internal Revenue Service in accordance with section 501(c)(3) of the
21 Internal Revenue Code.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09131-02-5
S. 3924 2
1 4. Awards. An eligible applicant shall receive an award of one thou-
2 sand dollars after completion of thirty-six months of qualifying employ-
3 ment; an award of one thousand five hundred dollars after completion of
4 sixty months of qualifying employment; and an award of two thousand
5 dollars after completion of eighty-four months of qualifying employment.
6 All such awards shall be applied by the corporation directly to the
7 outstanding principal of one or more of the recipient's college loans of
8 such recipient's choosing.
9 5. Rules and regulations. The corporation is authorized to promulgate,
10 including on an emergency basis, such rules and regulations as shall be
11 necessary for the implementation of the provisions of this section.
12 § 2. Subsection (c) of section 612 of the tax law is amended by adding
13 a new paragraph 42 to read as follows:
14 (42) Interest on indebtedness incurred or continued to pay tuition and
15 fees for undergraduate education to the extent such interest is deduct-
16 ible, in accordance with 26 U.S.C. § 221, for federal tax purposes, and
17 only when the taxpayer's federal adjusted gross income is seventy-five
18 thousand dollars or less.
19 § 3. This act shall take effect immediately; provided that if this act
20 shall become a law after April 1, 2015, section one of this act shall be
21 deemed to have been in full force and effect on and after April 1, 2015;
22 and provided, further, that section two of this act shall apply to the
23 tax year in which it takes effect, and all subsequent tax years.
