State plans to improve partial student loan forgiveness programs
ALBANY — Governor Kathy Hochul and the state legislature are looking for ways to address high student loan debt, which has squeezed household budgets, forced students to drop out and made chosen careers in essential jobs unaffordable. public service.
The state’s partial loan forgiveness programs are narrow and apply to only a few careers for low-income New Yorkers who are employed in specific public service careers in underserved communities.
These programs are available to experienced attorneys who become attorneys or advocates for indigent clients; registered social workers in a “critical human services area”; physicians in rural or inner city communities; young farmers who agree to farm full-time in New York State for five years and graduates of the “Get on Your Feet” program who live in the state, earn less than $50,000 a year and already participate in the federal Pay As You Earnings or Income Contingent Reimbursement Programs.
They are also available to professors of nursing and adjunct clinical professors who teach nursing, child welfare workers in state agencies, and teachers working in high-needs school districts or in subjects experiencing a shortage of teachers.
A 2021 study shows that 59% of college-educated New Yorkers had student loan debt that averaged $37,600, according to the Rockefeller Institute of Government. On Long Island, the average student debt was $35,100 in 2018. Statewide, 2.4 million New Yorkers had student loan debt in 2020, with an estimated debt of $90.3 billion. , according to the study.
The state’s eight major student loan forgiveness programs are offering scholarships to 2,141 graduates this year at a cost of $6.2 million, as part of the state’s current budget of $212 billion. The federal government also has a loan forgiveness program for direct student loans that can be used by income-eligible graduates working in specific government and nonprofit jobs after making monthly payments for 10 years.
But these programs serve few graduates, and funding is low compared to many graduates’ debt. For example, the most recent state report shows that qualified nurses received an average of $7,926 in one year, with a maximum of $40,000, and doctors received an average of $10,000, with no maximum indicated. The most widely used program, the Get On Your Feet Loan Forgiveness program, serves 1,098 graduates who received an average of $910.
“Some of the graduate student professions with massive loans,” said Sen. Toby Ann Stavisky (D-Queens), chair of the Senate Committee on Higher Education. “It’s as if they are mortgaging their careers and spending a lot of time repaying their student loans.
In the state budget being negotiated, the Senate and Assembly tentatively agreed in their separate budget proposals to Hochul’s proposed tax exemption that would end a frustrating hurdle in student loan forgiveness programs.
Currently, New Yorkers find that their forgiveness allowance is treated as part of their adjusted gross income “resulting in an increase in tax liability and ultimately the exchange of a debt problem against another,” according to the State Budget Division. Hochul’s proposal would exempt the student loan forgiveness benefit from being considered income and could expand the use of loan forgiveness programs.
The Senate is also supporting a related Hochul proposal that would allow the state to share education and employment records to expedite the process of student debt relief for state employees who qualify for state programs. ‘State.
Treating the grant as taxable income “obviously undermines the benefit itself,” said Blair Horner, executive director of the New York Public Interest Research Group which has lobbied for more student aid and loan forgiveness. “The governor’s proposal makes sense.”
The Commission on Independent Colleges and Universities also supports the interim budget agreement.
“These programs are important for students working in critical fields like social work and nursing, among others,” said Lola W. Brabham, president of CICU. She called on governments to provide more student aid to reduce borrowing.
Hochul is also offering a new student loan repayment program for nurses who agree to work in underserved areas for three consecutive years. The Assembly supports the proposal and wants to expand the types of nurses and locations that would be eligible to benefit from Hochul’s Nurses Across New York program.
While this kind of tripartite support bodes well at this stage of the budget process, final deals will not be sealed until the full budget has been approved. The deadline is April 1.
Additionally, there are more than a dozen active bills that would extend student loan forgiveness to more New Yorkers. The bills could be voted on after the budget is passed and before the end of the legislative session scheduled for June 2.
Active proposals include competitive grants of up to $5,000 per year for 10 years for State University of New York or City University of New York graduates working in the state or local government. Others are aimed at engineering graduates who stay in the state, employees who work for small companies; agricultural instructors; faculty of dentistry; mental health workers; alcohol and drug counsellors; lawyers for local governments; child care providers and seniors.
The bills emphasize the benefit is to provide the skilled labor needed to grow the economy and prevent educated New Yorkers from joining an exodus to cheaper states.
“The high debt that people have when they graduate hurts society,” said NYPIRG’s Horner. “It limits a person’s ability to buy a house, the kinds of jobs they can get, and it takes away the reason to go to college.”