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With the end of the Biden administration’s student loan forgiveness plan uncertain and heading to the Supreme Court, borrowers may have other options for relief. loans in New York state.
The ‘Walk on Your Feet’ loan forgiveness program, launched in 2015, is designed to “invest in recent graduates with student loan debt who choose to invest in their futures.” those in New York,” said Angela Liotta, chief information officer and director of the New York State Higher Education Services Corp.
Under the program, some state residents may be eligible for student loan forgiveness for up to 24 months.
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There are about 2.5 million people with federal student loan debt in New York, who owe nearly $100 billion, said higher education expert Mark Kantrowitz.
Here’s what borrowers need to know about the program.
You must live and study in New York
State aid is available to legal New York residents who have lived in the state for 12 months or more. If you work, you also need to work for the state.
Among other requirements, applicants must have graduated from a New York high school, or the equivalent of a New York high school, and have attended an in-state college or university and earned a degree -Bachelor degree in December 2014.
You also need to apply to the program within two years of graduation.
An income-driven repayment plan is required
To qualify for the program, borrowers must enroll in a repayment plan, where payments are typically capped at 10% of their income, such as a Pay as You plan. Earn (PAYE), the Revised Pay As You. Get a plan (REPAYE) or a repayment plan (IBR).
Eligibility is limited by income, type of loan
The program excludes those with a gross income of more than $50,000 per year.
Not all student loans qualify for state relief.
Under the direct loan program, both available and unsecured loans are eligible. You may not qualify for Federal Family Education Loans (FFEL), although you may be able to consolidate these loans into the Direct program. Private student loans are not eligible.
At the same time, the loans we took during high school are not included in the forgiveness from the state, and to get the program you need to have a bachelor’s degree at the time of application.
Not sure what type of loan you can get? You can check Studentaid.gov.
Student loan repayments are up to 24 months
Under the Your Foot Loan Forgiveness Program, New York State may cover student loan payments for up to 24 months under an eligible repayment plan.
The state makes payments directly to student loan servicers.
Exemption can 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 Department of Taxation and Finance for more information.
Federal student loan payments have been suspended since March 2020, due to the pandemic policy, and will remain until the court completes the debt forgiveness plan. students in the Biden administration, or at the end of August – whichever comes sooner.
Although you can apply for the Loan Forgiveness Program now, applications will be reviewed once federal student payments begin, Liotta said. However, if you think you qualify, it’s a good idea to apply for relief now because of your eligibility requirements within two years of graduation.
Not eligible for this program? New York has a list of other federal and state student loan forgiveness programs.