Prohibits state agencies from assessing an additional collection fee charge on outstanding debt where the sum due and owing any state agency results from tuition, fees, room and board, educational benefit overpayments, student loans, or other charges incurred by a student in furtherance of such student's education.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10261
SPONSOR: Rules (Zebrowski) TITLE OF BILL:
An act to amend the state finance law, in relation to prohibiting state
agencies from assessing certain additional collection fee charges on
certain outstanding student debts
PURPOSE OF BILL:
To remove the required twenty-two percent fee on student debt when a
student has defaulted on student loan payments owed to the State Univer-
sity of New York.
SUMMARY OF SPECIFIC PROVISIONS:
Section one of the bill amends section 18 of state finance law as it
relates to waiving the 22% collection fee on any debt associated with
the collection of student related debt.
JUSTIFICATION:
Student loan debt is a crisis many Americans are facing across this
nation. The COVID-19 pandemic has only exacerbated this crisis by
increasing the amount of student loan borrowers that have defaulted on
their student loan payments. In New York, the Office of the Attorney
General is responsible for collecting from students who default on money
owed to the State University of New York. Under current law, the Office
of the Attorney General is required to charge twenty-two percent inter-
est of the debt owed, plus an additional pre-judgment interest, when a
student defaults on payment.
These interest costs make it increasingly difficult for student borrow-
ers to pay back their student loans. This bill would help student
borrowers by prohibiting state agencies from assessing the additional
collection fee.
LEGISLATIVE HISTORY:
New Bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
This act shall take effect April 1, 2023.
STATE OF NEW YORK
________________________________________________________________________
10261
IN ASSEMBLY
May 13, 2022
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Zebrowski)
-- read once and referred to the Committee on Governmental Operations
AN ACT to amend the state finance law, in relation to prohibiting state
agencies from assessing certain additional collection fee charges on
certain outstanding student debts
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 18 of the state finance law is amended by adding a
2 new subdivision 5-a to read as follows:
3 5-a. Notwithstanding any contrary provision of this section, no state
4 agency shall assess the additional collection fee charge described in
5 subdivision five of this section on any debt subject to this section
6 owed by a debtor to a state agency for a liability resulting from
7 tuition, fees, room and board, educational benefit overpayments, student
8 loans, or other such charges incurred by a student in furtherance of
9 such student's education.
10 § 2. This act shall take effect April 1, 2023.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14086-03-2
