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With the fate of the Biden administration’s sweeping student loan forgiveness plan uncertain and heading to the Supreme Court, borrowers in New York state may have another avenue for relief.
The Get On Your Feet loan forgiveness program, launched in 2015, is designed to “invest in young college grads with student loan debt who have chosen to invest their future in New York,” said Angela Liotta, public information officer and director of communications at the New York State Higher Education Services Corp.
Under the program, certain residents of the state may be eligible for student loan forgiveness for up to 24 monthly payments.
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According to higher education expert Mark Kantrowitz, there are about 2.5 million people in New York with federal student loan debt, who collectively owe nearly $100 billion.
Here’s what borrowers need to know about the program.
You must live in New York and have attended school
State relief is available to legal residents of New York who have lived in the state for at least 12 consecutive months. If you are employed, you must also work in the state.
Applicants must, among other things, have a New York high school diploma or equivalent diploma from New York State High School, attended a college or university in the state, and earned their bachelor’s degree on or after December 2014.
You must also apply to the program within two years of graduation.
An income-based repayment plan is required
To qualify for the program, borrowers must enroll in an income-based repayment plan, where their payments are generally capped at 10% of their discretionary income, such as the Earn (REPAYE) plan or the Income Based Repayment (IBR) plan.
Eligibility is limited by income and the type of loan
The program excludes those who have an adjusted gross income of more than $50,000 per year.
Not all student loans are eligible for state relief.
Subsidized and unsubsidized loans are eligible under the Direct Loan Scheme. Federal Family Education Loans (FFEL) may not qualify, although you may be able to consolidate these loans into the Direct program. Private student loans are not eligible.
Meanwhile, loans we took out while in graduate school are also typically exempt from government forgiveness, and to qualify for the program you need have no more than a bachelor’s degree at the time of application.
Not sure what type of student loan you’re holding? You can check Studentaid.gov.
Up to 24 months student loan payments available
Under the Get On Your Feet Loan Forgiveness program, New York State can cover your entire student loan bill for up to 24 months under a qualifying income-based repayment plan.
The state makes the payments directly to your student loan administrator.
The loan forgiveness could have tax implications. Recipients will receive a 1099 form from the state and are encouraged to contact a tax professional, the IRS, or the New York State Department of Taxation and Finance for additional information.
Federal student loan payments have been on hold since March 2020 due to pandemic-era policies and will be suspended until the Biden administration’s student loan writ plan litigation is resolved or until the end of August, whichever is earlier.
Although you can now apply for the Get on Your Feet Loan Forgiveness Program, applications will be reviewed for eligibility once state student payments resume, Liotta said. However, if you think you qualify, it’s a good idea to apply for the relief now, as you must apply within two years of graduation.
Don’t qualify for this program? New York has a list of other state and federal student loan forgiveness programs.