Legislation ‘removes barriers’ to accessing federal public service loan forgiveness program by clarifying key terms, allowing employers to certify employment
√ Announces statewide outreach effort to help eligible New Yorkers take advantage of federal time-limited public service loan forgiveness waiver
Gov. Kathy Hochul on Thursday signed legislation, her team said, “to expand and simplify access to the federal public service loan forgiveness program statewide. The new legislation 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.”
Hochul said, "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. 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 toward 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.
Hochul’s team said, “Legislation (S.8389-C/A.9523-B) addresses several well-documented barriers to accessing PSLF” 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 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.
•Allowing public service employers to certify employment on behalf of individuals or groups of employees directly with the U.S. Department of Education.
On Oct. 6, 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.
Assemblymember Harvey Epstein said, "There's over half a million public servants in New York with student loan debt. Just 10,000 have had their loans cancelled through the public service loan forgiveness (PSLF) program – we are working to raise that number significantly. A limited waiver that allows borrowers to receive credit for past periods of repayment that would otherwise not qualify for PSLF is in effect until Oct. 31, 2022. This legislation maximizes New Yorkers' opportunity to benefit from the waiver, and PSLF generally. From applying a multiplier to teachers' in-class hours so that hours worked outside of class are more accurately reflected, to ensuring that agencies can transmit paperwork on behalf of workers to the federal government, our legislation will help more New Yorkers get their loans forgiven faster.”
Hochul also announced a statewide effort to inform New Yorkers of the PSLF waiver and encourage eligible workers to apply for loan forgiveness before the end of the PSLF waiver period. The Department of Financial Services has secured commitments from organizations representing more than 8,500 public and not-for-profit employers to distribute information to their workforces in the coming weeks and assist them in applying to the PSLF program before the waiver expires. Groups joining this outreach pledge include the United Federation of Teachers, Human Services Council, Nonprofit New York, New York Council of Nonprofits, New York Conference of Mayors, and NYS Association of Counties. DFS will also be offering PSLF workshops across the state in the coming weeks.
Hochul’s team said, “In August, based on trends identified in DFS examinations of student loan servicers, the department issued first-in-the-nation guidance outlining expectations for informing borrowers about the PSLF program and best practices to follow. New Yorkers can visit dfs.ny.gov to learn more.”
Department of Financial Services Superintendent Adrienne A. Harris said, "The Department of Financial Services is committed to protecting and empowering borrowers and families across the state. Our employees stand ready to help New Yorkers by answering questions and addressing complaints regarding student loans, including the PSLF program."
U.S. Sen. Chuck Schumer said, "For too long student debt has been an anchor on young people and families, weighing them down in nearly every aspect of life. That is why I fought nonstop for years to convince President Biden to give millions of Americans the relief they need to realize their full potential and keep our economy growing. The positive impacts of this move will be felt across New York and the nation, particularly in minority communities, with at least $16 billion being put back into working families' wallets in the Empire State. Gov. Hochul's bold action today will help ensure every eligible New Yorker is able to get access this critical federal relief and take advantage of the public service loan forgiveness programs to remove this anchor, help rebuild the middle class, and give people the debt-free future they deserve."
U.S. Rep. Adriano Espaillat said, "Teachers, firefighters, and law enforcement officers provide essential services critical to our daily lives. We have made tremendous progress securing student loan debt for public servants, and I commend Gov. Hochul on today's announcement to help strengthen our efforts to remove barriers to the federal public service loan forgiveness program and exempt student debt forgiveness and cancellation from state taxes. This legislation will ease the debt burden of public service workers and go a long way towards repaying the debt that we collectively owe to the men and women in public service."
Professional Staff Congress President James Davis said, "Thank you to Gov. Hochul, Majority Leader Stewart-Cousins, Speaker Heastie, Sen. Kevin Thomas, Assembly member Harvey Epstein and all the legislators for recognizing the contributions that adjunct faculty make to the higher education workforce and for prioritizing higher education workers in the public service loan forgiveness program. The work of adjuncts who staff a majority of our classes often goes unrecognized in our two-tiered academic labor system. Many adjuncts work the equivalent of full-time, but have been overlooked because only their classroom hours were counted. This legislation changes that and is a major step forward to fixing the student debt crisis that prevents so many New Yorkers from living their best lives."
United University Professions President Dr. Fred Kowal said, "We are grateful and thrilled that Gov. Hochul will sign this important bill into law, which will help thousands of state public employees struggling with student debt get some or all of it forgiven through the federal public service loan forgiveness program. Thank you as well to Sen. Kevin Thomas and Assembly member Harvey Epstein, the bill's sponsors. UUP was a leading proponent of this bill during session because it expands PSLF eligibility, qualifying many SUNY adjuncts who were previously excluded from the program. Nearly 40% of UUP members are adjuncts. Thank you, governor, for your strong support for SUNY. This is a huge win for our members, as well as public employees across the state."