Gov. Andrew M. Cuomo’s idea to help those saddled with student debt sounds promising. It at least recognizes the need to relieve a heavy burden that hinders countless young people from starting their adult lives.
The governor presented his “student loan relief” plan in his State of the State speech last month.
Some recent graduates continuing to live in New York State would pay nothing on their student loans for the first two years out of school. The plan would supplement the federal Pay as You Earn income-based loan repayment program.
The student loan relief program would be restricted to graduates who attend college in the state and also live here following graduation and earn less than $50,000 per year.
The qualifications shouldn’t be too tough to reach for most recent grads, especially in earnings. While the economy has seen improvement of late, there is no guarantee of a job, much less one paying a high-flying salary. It is quite possible even a fledgling suburban teacher would find herself making less than $50,000 to start. Of course, salaries also would depend upon where recent grads look for jobs.
Here in Western New York, someone could manage more than a livable wage on quite a bit less than $50,000. However, that is not the case in downstate areas where the cost of living is sky-high.
According to the governor’s website, New York State will pay the difference between what the federal government covers and the individual’s total loan payment. That means 100 percent of a graduate’s loan payments for two years are covered. And, as the statement continued, the program would relieve recent graduates from the burden of overwhelming debt. Officials estimate 7,100 graduates will be enrolled in the program in its first year, basing it on the total number of undergraduates per year in the state, the percentage of those who meet program eligibility criteria for residency and the percentage of those with qualifying loan debt and with salaries under $50,000.
State officials expect more than 24,000 participants annually by 2019-20 and when fully phased in, the program is expected to cost approximately $41.7 million.
Indeed, the governor’s proposal is innovative and reminiscent of one started a few years ago in Niagara Falls, in which the city agreed to pay the student loan debt of recent college graduates for two years if they relocate to a specific neighborhood a couple of blocks from the falls.
The brainchild of Community Development Director Seth A. Piccirillo, who wanted to help stop the exodus from a city with a population near 50,000, the idea is rooted in attracting young professionals while reigniting the economy. Preference is given to Niagara Falls residents.
There are currently 11 participants in the Niagara Falls program, which is capped at 20 participants and has a staggered enrollment. The city is processing three new applicants. Three of the participants have completed a full year of the program, while the rest are in their first year.
Piccirillo accurately praises the governor’s plan for addressing the problem of student debt and how it adversely affects lives from a statewide level and, therefore, potentially affects even more lives and economies. Given how crippling student loan debt can be for a young person wanting to buy a home or start a family or contribute to the local economy, the governor’s student loan forgiveness plan holds the right kind of promise.