ALBANY -- New York State would pay the first two years of college loans for about 7,100 college graduates earning up to $50,000 a year under a Cuomo administration proposal.
Gov. Andrew M. Cuomo's Get On Your Feet Loan Forgiveness Program would cover just a fraction of the 199,000 graduates of two- and four-year public and private colleges in New York State each year. Graduates could participate in the $41.7 million state program if they are enrolled in the federal Pay as You Earn Program, which reduces the costs of loan payments to eligible students.
"We have a crisis in this country of kids coming out of college -- high debt and low wages," Cuomo said Monday. "The cost of education has skyrocketed and the job market in some cases has plummeted, and that disconnect is affecting an entire generation."
Cuomo's idea was greeted by higher education advocates as an important step in reducing the rapidly rising cost of a college education. The measure requires legislative approval.
When fully implemented beginning in the 2019-20 academic year, more than 24,000 graduates in New York would be eligible each year, Cuomo officials said Monday.
Here's how it would work: A New York graduate with $20,000 in student loan debt making $35,000 a year would face an annual debt of $2,554 in a typical 10-year student loan. The federal program could cut that cost to $1,225 a year. The state program would eliminate that payment completely for the first two years.
A federal report says the average New York graduate faces more than $27,000 in student loan debt.
A state official said Monday that every resident who graduates from a college in New York, stays in New York earning $50,000 or less, qualifies for the federal program and applies for the state program would receive the benefit.
The New York Public Interest Research Group, which is partly funded and staffed by college students, supports the measure, even though the group said more financial help is needed to lower the cost of education.
"Governor Cuomo deserves extra credit for offering a plan to help reduce the loan payments for college graduates who are not making a lot of money," NYPIRG's Blair Horner said.
To participate, state residents must graduate in 2015 or later and enroll in the federal Pay As You Earn income-based loan repayment program. Under the federal program, graduates pay about 10 percent of what is determined to be their discretionary income.
Once in the federal program, state residents who graduate from state schools would be eligible for the Get On Your Feet program, subject to annual income verification. The two-year period in which the state pays a student's loan would begin after the six-month grace period already part of the law.
Cuomo's proposal "is a win for students across the state and a model for the country," said Laura L. Anglin, president of the Commission on Independent Colleges and Universities, which represents private schools.
"This proposal provides yet another incentive for SUNY alums to stay in New York State after graduation and help us build a skilled workforce that will drive the state's economy," said Nancy L. Zimpher, SUNY's chancellor.