N.Y. expands public servants' access to student loan forgiveness

ALBANY | Gov. Kathy Hochul has signed legislation to expand and simplify access to the federal Public Service Loan Forgiveness program statewide. The new legislation- signed into law Sept. 15- establishes uniformity around what qualifies as full-time employment for the purposes of accessing PSLF and allows public service employers to certify employment on behalf of workers, eliminating substantial barriers to applying for and accessing PSLF. "If you spend your days working for the people of New York, you shouldn't spend your nights worrying about how to pay us back. This legislation acknowledges the significant contributions of our public servants, first responders, educators and more, by helping unlock federal loan forgiveness for countless members of New York's workforce," Gov. Hochul said. "From the workers who ushered us through the pandemic to the everyday heroes who keep New York moving, public-sector and not-for-profit workers deserve to make the most of this benefit - but without headaches, delays, or confusion. I'm proud to sign this legislation that ensures public servants have the clarity and the support they need to access federal loan forgiveness, and I thank my partners in the Legislature for their thoughtfulness on this bill." PSLF is a federal program that rewards and incentivizes public service work by cancelling a portion of borrowers' federal student loans. The program requires borrowers to be full-time employees of an eligible public service employer and make 120 qualifying payments towards their student loan, after which the remainder of their federal student loan debt is forgiven. Any student loan debt that is forgiven under this program will not be subject to tax under New York State tax law. Currently, approximately 2.7 million people in New York work in the public or nonprofit sectors. Since 2007, the transformative PSLF program has helped eligible public service workers receive an average of $61,402 in debt relief - providing public servants the opportunity to spend on a mortgage, monthly payments for a car, basic necessities like groceries and gas. Legislation (S.8389-C/A.9523-B) addresses several barriers by: -Clarifying the legal definitions of key terms such as, "certifying employment," "employee," "full-time," "public service employer," "public service loan forgiveness form," and "Public service loan forgiveness program;" -Setting a standard hourly threshold for full-time employment at thirty (30) hours per week for the purposes of accessing PSLF and clarifying standardized prep time to be included in such calculation for faculty and teachers; and -Allowing public service employers to certify employment on behalf of individuals or groups of employees directly with the U.S. Department of Education. In October 2021, the Department of Education announced time-limited changes to the PSLF program to make it easier for eligible borrowers to have their federal loans forgiven ("PSLF Waiver"). The PSLF Waiver allows borrowers to count payments made on all federal loan programs or repayment plans toward forgiveness, including loan types and payment plans that were not previously eligible. New Yorkers working in public service - in government or at a not-for-profit - with outstanding student loans may be eligible for forgiveness under the PSLF Waiver even if they were previously denied. Borrowers only have until Oct. 31 to take advantage of the PSLF Waiver.

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N.Y. expands public servants' access to student loan forgiveness

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