Office of Planning & Budgeting

January 25, 2016

New York expands student loan forgiveness program to include lower earners

New York state has recently instituted the “Get on Your Feet” loan forgiveness program in an effort to keep young college graduates living and working in the state. The program, originally introduced as a part of Governor Cuomo’s 2015 Opportunity Agenda, is designed to help struggling recent graduates in the state pay back their student loan debt. Get on Your Feet is the most recent extension of NY state’s financial aid to its college graduates, which includes loan forgiveness for several public service professions and need-based state grant programs with awards of up to $5,165.

There are a number of eligibility stipulations for the program, including that the graduate be enrolled in the federal Income-Based Repayment plan or the Pay As You Earn plan, that they are making less than $50,000 per year, that they work and have graduated in-state, and that they have received their degree during or after the 2014-15 academic year. Get on Your Feet also only applies to federal loans; private loans are ineligible for relief through the program.

The plan, which has been covered by CNN Money, the Huffington Post, Forbes, and the Washington Post, is not without controversy – recent graduates who do not qualify for Get on Your Feet are upset because they feel they are paying for others’ college costs while reaping none of the benefits of the loan forgiveness. The program is financed through the state’s General Fund, for which the primary sources of revenue are in-state taxes.

The Washington Post article above (linked again here) lists some of the other states that have forms of student loan forgiveness. Forty-five states and the District of Columbia offer some form of loan forgiveness for its residents, according to the article, but New York is the only state that specifically targets lower-income graduates. Most programs in other states are concentrated in public-service industries; health, social work, teaching, and public law.

Washington state provides health-care professionals with loan forgiveness of up to $70,000 over two years (details here) and also gives financial assistance in the form of the State Need Grant (SNG), which distributes financial aid awards up to the price of in-state undergraduate tuition—$10,344 at UW—for Washington residents whose families meet the minimum income requirements.

Unfortunately, more than 33,500 students across Washington, 3,500 of whom attend the UW, are eligible to benefit from the SNG but do not because the program has not received sufficient funding from the state.