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Student-Loan Forgiveness for New York Borrowers Just Got Easier

Student-Loan Forgiveness for New York Borrowers Just Got Easier
Written by Publishing Team

  • New York Governor Cathy Hochhol announced plans to protect student loan borrowers in the state.
  • These plans include an easier application process for public service loan forgiveness and discontinuation of withholding of registration.
  • It comes amid a nearly two-year hiatus on student loan payments during the pandemic.

New York Gov. Cathy Hochhol has some good news for student borrowers in the state.

Five months into office, Hochul on Tuesday released a 200-page state report for 2022, which outlines policies and plans to improve the lives of New Yorkers, from expanding the health care workforce to accelerating climate action. It also included plans to improve access to relief for the 2.4 million student loan borrowers in New York.

“In order to better support New Yorkers facing high debt burdens, Governor Hoechul will invest in effective student debt assistance programs, with an emphasis on helping New Yorkers navigate their student loan repayment system,” the report said. “With this investment, Governor Hochul will help ensure that more New Yorkers can finally say, ‘I am a debt-free student.

According to the report, Hochul plans to protect student loan borrowers in four ways, three of which are intended to facilitate access to loan forgiveness:

  1. Attract students to healthcare by offering free tuition, covering educational costs, and providing stipends for lost income while in school to prevent student debt from accumulating.
  2. Automate “as much as possible” the application process for borrowers seeking to participate in the Public Service Loan Forgiveness Program (PSLF), which relieves students of public server debt, such as teachers and nonprofit workers, after ten years of eligible payments.
  3. Propose legislation to stop withholding transcripts from students who owe small amounts of money, such as tuition fees or parking tickets.
  4. Exemption from loans from the Higher Education Services Corporation, which grants graduates in certain fields such as social work and legal services, tax credits.

As noted in Hochul’s report, since the first round of borrowers became eligible for relief under the PSLF in 2017, the federal program has achieved a 98% national rejection rate due to administrative complexities, such as paperwork errors, leaving many public servants without the comfort that they were on her. a promise. Although the program is federal, Hochul is reforming it at the state level by proposing legislation to allow the state to share employee records with the Department of Education so that borrowers don’t have to do it themselves.

In October, President Joe Biden announced a series of reforms to the program, including a temporary relief to allow borrowers to count payments from any federal loan programs or repayment plans toward loan forgiveness through the PSLF, including programs and plans that were not previously eligible. Hochul’s plans will add to this relief.

Additionally, her proposal to stop blocking transcripts is something a number of colleges across the country have worked to end during the pandemic. Institutional student debt – the type referred to as hochul – is debt owed by students to schools, and can take the form of late education bills and other smaller fines. Colleges can keep students’ transcripts as security for debt and prevent enrollment in classes until the debt is paid, making it difficult to prepare for graduate life.

The changes come amid a pause in student loan payments, with interest waived, that Biden recently extended for the third time until May 1. While this federal relief is welcome for 43 million borrowers nationwide, some progressive lawmakers still want student debt eliminated completely, so reforms like the Hochul reform would not be warranted at all.

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