Cuomo Proposes Four Steps to Protect Students From Loan DebtPosted: Updated:
Governor Andrew Cuomo's 16th proposal of his 2018 State of the State agenda is aimed to lessen the burden of growing student loan debt. This proposal builds off of the Excelsior Scholarship which made New York State's public universities tuition-free for middle-class families.
"Today, a college education is a necessity for a middle-class life, yet the crushing weight of student loan debt often keeps New Yorkers from buying homes, cars and ultimately limits their ability to save money and invest in their futures," said Cuomo.
Cuomo wants to create a Student Loan Ombudsman at the Department of Financial Services who will be an advocate to help resolve student complaints, mediate disputes, and educate borrowers about student loans. The position will also offer free financial counseling and assistance for students in debt.
In addition, the Governor wants to require all colleges to annually provide students with estimated amounts incurred for student loans including the amount of students loans incurred to date, a range of the total payoff amount including principal and interest, and the monthly repayment amount that the student may incur for the loan to date.
The proposal also includes ensuring that loan services or debt consultants can't mislead a borrower, misapply payments or provide credit reporting agencies with inaccurate information. The protections will also include banning upfront fees, requiring fair contracts and clear disclosures.
Lastly, Cuomo plans to propose legislation that prohibits the suspension of professional licenses of people behind or in default of their student loans. Currently, there are 19 states that allow this under the law.
Nationally, student loan debt is the second highest debt category in the United States after mortgage debt. It accounts for 10% of the debt balance and amounts to around $1.5 trillion nationwide. In New York, the average student has more than $30,000 in debt.