New York Offers 2 Years of Student Loan Forgiveness
Jan 6th, 2016 @ 1:10 PM by Amber Nelson
The state of New York has instituted a new program to help struggling college graduates meet their student loan obligations. New York is the first state to offer an income-based loan-forgiveness program in an attempt to reduce the mounting student loan debt load on its citizens.
Called the “Get on Your Feet” program, the Andrew Cuomo administration opened state aid on December 31 to recent graduates who are having a hard time repaying their student loans. The state will pay up to two years’ worth of federal student loan bills. “Ensuring students are able pay for college and not saddled with debt is critical for both their individual success and the continued economic growth of New York State,” said Governor Cuomo.
In order to qualify for help, applicants must be U.S. citizens and must have been legal residents of New York for the past 12 months. Graduates must also have graduated from a New York high school and college or university. Applicants must have graduated no sooner than December 2014 and apply within two years of graduation. They must also already be enrolled in the federal income-based repayment plan and have an annual income less than $50,000. And they have to be current on all federal and New York state student loans. Only federal loans are eligible; no private loans will be repaid.
It is estimated that as many as 7,100 former students will enroll in the “Get on Your Feet” program by the end of 2016 with up to 24,000 participants by 2020. By that time the cost of the program will hit $41.7 million.
According to the Institute for College Access and Success, 61 percent of New York students graduated with outstanding student loans in 2014, a figure similar to those of students in most states around the country. And with job prospects and salaries only somewhat better than during the Great Recession, many graduates have found themselves without the means to repay their loans.
The New York loan forgiveness program aims to encourage New York residents to stay and contribute to the state economy.
While New York is the only state to offer income-based forgiveness, many other states offer forgiveness programs based on type of profession or working in under-served populations.
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.