BUFFALO, N.Y. (WIVB) — In-state college graduates saddled with big student loans can find some relief under a new state loan forgiveness program. It is called “Get On Your Feet”, and it is designed to do just that–help new college graduates get off to a fresh start by removing loan payments from their family income equation.
Just as student loan debt has been shown to be a drag on the U.S. economy, student loans are also slowing down young people in New York from buying cars, homes, and adding to the state’s prosperity.
To give recent New York graduates a boost, Gov. Andrew Cuomo rolled out the “Get On Your Feet” program earlier this year, and state lawmakers inserted the loan forgiveness measure into the $142 billion state budget that was approved early Wednesday morning.
Noelle Carter, a counselor for Consumer Credit Counseling Service of Buffalo, thinks loan forgiveness is a good idea.
“I think it is a win-win, both for graduates and New York State,” she said.
But Get On Your Feet has limitations. It can only be used by New York residents who graduate from in-state schools, and they must be enrolled in the federal “Pay As You Earn” program, which sets monthly loan payments to a graduate’s annual income.
Pay As You Earn only works for paying back government or government-backed loans. The participant’s annual income is capped at $50,000 dollars, and the graduate has to live in New York for two years after finishing school.
Carter says “Get On Your Feet” will make the grad’s monthly payments toward the federal Pay As You Earn program.
“Whatever you owe after being enrolled into the ‘Pay As You Earn’ program, on a monthly basis, the state will then cover that monthly payment that is required.”
Buffalo State College financial aid advisor Melissa Miller says the loan forgiveness program is a good start, but they try to emphasize responsible borrowing, and encourage students to apply for grants and scholarships, which reduces the amount of money they have to borrow.
“We also have a number of outside scholarships that we administer through the Financial Aid Office, and we promote them, and students don’t apply,” she said.
State Assemblywoman Crystal Peoples-Stokes says helping young middle class families with their debt is a good use of tax dollars.
“Student loans have a huge negative impact on middle class families who struggle to send their kids to school,” Peoples-Stokes added, saying loan forgiveness really can help young families get on their feet. “Young people who end up with enormous debt that makes it more difficult to stabilize their lives financially.”
Because Get On Your Feet is just getting started, Gov. Cuomo estimates about 7,100 graduates can use it this year, but when it is fully rolled out in 5 years, state officials project as many as 24,000 New Yorkers can take advantage of the program. College graduates of 2015 and later are eligible.
College students have several options for obtaining financial aid for college, including loans, scholarships, and grants. There are also programs to help pay back college loans. The U.S. Department of Education offers a student financial aid website that can get help families make the right call.