According to reports, the Biden administration sees sweeping student loan forgiveness plan uncertainly. But, the borrowers in New York may have some options for relief. Five million people with federal student loan debt in New York collectively owe almost dollars 100 billion, according to Mark Kantrowitz, the higher education expert.
The public information officer and director of communications at the New York State Higher Education Services Corp, Angela Liotta, said that the ‘Get On Your Feet’ Loan Forgiveness Program, which rolled out in 2015, is meant to invest in recent college graduates with student loan debt. But, this is for those who opted to invest their futures in New York. Under this program, some state residents can be eligible for student loan forgiveness for up to 24 months of payments.
Information that borrowers need to know about the program
Here is some information that borrowers need to know about the program. One must live and have attended school in New York. The relief is available to legal residents of New York. These are for those who have lived in the state for 12 consecutive months and more.
NYPD members said that no threats are known now, but everyone should remain vigilant. So, if you are employed, you must also work in the state. The applicants must have graduated from a New York high school. Or, at least, should have received a New York state high school equivalent diploma and attended a college or university. Plus, have earned their undergraduate degree in or after 2014 (December).
Also, one must apply for the program within two years of graduating. An income-driven repayment plan is also required to qualify for the program. So, borrowers must be enrolled in an income-driven repayment plan, and their payments are generally capped at 10 percent of their discretionary income, like the PAYE (Pay as You Earn) plan, the REPAYE (Revised Pay As You Earn) plan, or the IBR (Income-Based Repayment) plan.
Interestingly, the program excludes those with a gross income of more than $ 50,000 a year. Not all student loans can qualify for State relief. However, subsidized and unsubsidized loans are possible under the Direct loan program. But, FFEL (Federal Family Education Loans) may not qualify. However, you can bring these loans into the Direct program. Also, private student loans are now ineligible.
Further news on the student loan forgiveness program
1. Loans taken during graduate school are also excluded from the state forgiveness. Also, to qualify for the program, one needs to have a bachelor’s degree when applying. To know what kind of student loans you can hold, you may check Studentaid.gov.
2. Under the – Get On Your Feet Loan Forgiveness Program, the New York state may cover the full student loan bill for up to 2 years or 24 months under a qualifying income-driven repayment plan.
3. The state makes the payments directly to your student loan servicer.
4. Loan forgiveness can have tax implications. Recipients shall get a 1099 form from the state. And so you are encouraged to contact a tax professional. You can know better by reading the rules and regulations of the IRS or the New York State Department of Taxation and Finance for more information.