Senate Bill S1673

                                 
BILL NUMBER: S1673

SPONSOR: GOUNARDES
 
TITLE OF BILL:

An act to amend the labor law, in relation to student loan repayment
information

 
PURPOSE OR GENERAL IDEA OF BILL:

To require employers to provide newly hired employees with a notice
detailing student loan repayment options that may be available to
borrowers.

 
SUMMARY OF PROVISIONS:

Section one adds a new section 217-a to the Labor Law to require the
Commissioner of Labor, the Commissioner of Education, and the Super-
intendent of Financial Services to develop a notice outlining student
loan repayment options, including ways to consolidate federal loans and
income-based repayment options and the website for the Department of
Financial Services' Student Lending Resource Center.  The section stipu-
              

lates that every new employer shall be required to provide this notice
to any employee hired for a post-graduate internship or entry-level
position of employment that requires an associate's degree or higher.

Section two states that the act shall take effect on the 180th day after
it shall have become law.

 
JUSTIFICATION:

The American student loan crisis is one of epic proportions. According
to a 2019 NYC Department of Consumer Affairs' report "Student Loan Debt
Distress Across NYC Neighborhoods," total student loan debt in the US
has reached a staggering $1.5 trillion. The debt load for 2016 college
graduates nationally averaged more than $30,000, and in New York, the
problem is even worse: the State Comptroller estimates that between 2006
and 2015, the delinquency rate among New York borrowers rose more than a
third, with debt averaging more than $32,0000 per borrower. The inabili-
ty to repay student loans and build future assets carries many conse-
quences, forcing the borrower to forego other purchases such as a car or
a home, or interfering with the decision to get married and start a
family. Additionally, defaulting on a loan can cause an enormous amount
of stress, anxiety, and depression for a borrower that sees no way out
of the financial hole they're in.

It is past time the state devised creative and effective solutions to
help residents dig themselves out of that hole. This bill serves that
purpose by requiring all employers to provide certain new employees with
a brief summary of the various student loan repayment options available
to them, including consolidation of federal loans and income-driven
plans. Providing this information at the onset of employment, when
employees are already opting into a number of other programs such as
health insurance, health savings accounts, transit benefits, and retire-
ment plans, is an opportune way to ensure that student loan repayment
plans are seriously examined by a potential borrower and naturally fold-
ed into their financial planning. This bill represents a thoughtful and
feasible approach to addressing the student loan debt crisis.

 
PRIOR LEGISLATIVE HISTORY:

2024: S346 - Passed Senate, died in Assembly

2023: S346 - Passed Senate, died in Assembly

2021-2022: S859 - Passed Senate, died in Assembly

2019-2020: S5048 - Referred t o Labor

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
This act shall take effect on the 180th day after it shall have become
law.