Governor Kathy Hochul just announced some good news for student loan borrowers in New York State today, October 13, 2022. If your loans are in default and have been sent to collections, Gov. Hochul just gave you a big break. The Gov. just signed legislation (S.7862B/A.10261) that puts an end the high fees debt collectors can charge you when collecting on loans from New York State for educational expenses.
Prior to the signing of this new law, a fee of 22 percent was added to the total amount of debt that was due. Gov. Hochul said,
When students across New York spoke up about the difficulties of digging out of debt, my administration listened. By signing this legislation, we are removing a barrier to higher education and ensuring that students can graduate without debilitating debt that has disproportionately hurt students least able to afford it. Every New Yorker deserves access to a quality education without fear of getting trapped in a cycle of debt.
The new legislation changes the state finance law and now prohibits debt collectors from charging you the fee. This new law gives New Yorkers who have been struggling to pay living expenses a break when it comes to paying off their student loans. Student Loan Hero says that the average New York resident has $35,638 in student loan debt. For someone who owes New York State that amount and it's in collections, the new law will save them approximately $7,840.36, simply by removing the 22 percent fee.
Attorney General Letitia James said,
Charging fees to students already struggling with debt only compounds the problem. This law addresses that inequity and is an important step in helping these New Yorkers become financially stable. I was proud to push for this legislation and commend the bill sponsors and Governor Hochul for taking this action.