New York recently created a new student loan forgiveness program designed to help recent graduates repay their loans. The new program, called the “Get On Your Feet Loan Forgiveness Program,” was created by Governor Cuomo.
Although it’s called a “loan forgiveness” program, “Get On Your Feet” is technically a repayment assistance program whereby the state of New York will cover your federal student loan payments for up to two years – if you meet certain criteria:
- Income cap. Borrowers cannot earn more than $50,000 per year.
- In-state residence. If you don’t reside in the state of New York, you don’t qualify.
- In-state schooling. You must have graduated from a New York state high school, as well as a college or university located in New York.
- Graduation date restrictions. Borrowers must have graduated after December 2014, and they must apply within two years of receiving their degree.
- Undergraduates only. Borrowers with a degree higher than a Bachelor’s cannot apply.
- Income-Driven Repayment. Borrowers must be enrolled in an income-driven repayment plan such as Income-Based Repayment (IBR), Pay As You Earn (PAYE), or the new Revised Pay As You Earn (REPAYE) plan.
- Good standing. Borrowers cannot be in delinquency or default on their federal student loans or their New York State student loans.
Note that there might be tax consequences to participating in the program.
Private student loans are unfortunately ineligible for the program – which certainly does little to help borrowers struggling under the weight of private student loan payments. Furthermore, under income-driven repayment plans like IBR and PAYE, monthly payments will generally be quite low for borrowers making under the $50,000 annual income cap. For example, a single borrower making $25,000 per year would pay approximately $60/month under the PAYE and REPAYE plans. A borrower making $40,000 per year would pay approximately $190/month under the same plans.
Nevertheless, despite the program’s restrictions and limitations, this represents a major step by one of the largest states in the country to provide much needed relief to new borrowers struggling to find a steady job. It is encouraging to see states like New York take action while the federal government is largely gridlocked and student loan reform remains stalled.
To learn more about New York’s “Get On Your Feet” student loan forgiveness program, check out the New York State Higher Education Services Corporation’s informational website.
