With the status of the Biden administration’s expansive student loan forgiveness scheme unknown and going to the Supreme Court, New York state borrowers may have another option for relief.
The ‘Get On Your Feet’ Loan Forgiveness Program, launched in 2015, is intended to “invest in recent college graduates with student loan debt who chose to invest their futures in New York,” according to Angela Liotta, public information officer and director of communications at the New York State Higher Education Services Corporation.
What You Should Know About Student Loan?
Certain inhabitants of the state may be eligible for student debt forgiveness for up to 24 months of payments under the program. You must have lived in New York and attended school there.
Legal New York residents who have lived in the state for 12 months or more are eligible for state relief. If you work, you must do so in the state as well.
Applicants must have graduated from a New York high school or gotten a New York state high school equivalency diploma, as well as having attended a state college or institution and achieved their undergraduate degree in or after December 2014.
In addition, you must apply for the program within two years of graduating.
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How To Calculate Monthly Payments?
Borrowers must be enrolled in an income-driven repayment plan in which their payments are generally capped at 10% of their discretionary income, such as the Pay as You Earn (PAYE) plan, the Revised Pay As You Earn (REPAYE) plan, or the Income Based Repayment (IBR) plan, to be eligible for the program.
Those with an annual adjusted gross income of more than $50,000 are not eligible for the program. Not all student loans are eligible for state assistance.
Subsidized and unsubsidized loans are both eligible for the Direct loan program. Federal Family Education Loans (FFEL) may not be eligible, but you may be able to consolidate them into the Direct program. Private student loans do not qualify.
New York state may cover your entire student loan cost for up to 24 months under a qualifying income-driven repayment plan under the Get On Your Feet Loan Forgiveness Program.
The payments are made directly to your student loan servicer by the state. The loan forgiveness could have tax consequences. Recipients will get a 1099 form from the state and are invited to seek additional information from a tax professional, the IRS, or the New York State Department of Taxation and Finance.
Currently, your monthly payments are limited to 10% of your discretionary income, which is the amount of money left over after covering fixed expenses.
The discretionary income is estimated at 150% of the federal poverty line. This means that, regardless of where you live in the country, your fixed expenses in 2023 are expected to be $21,870 per year, or 150% of the federal poverty level for a family of one.
The remainder of your earnings are deemed discretionary, and payments are limited to 10% of that total.
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