News Column

More than 318,000 Borrowers in New York Will Benefit from President's Executive Action to Make Student Debt More Manageable

June 10, 2014



WASHINGTON, June 10 -- Rep. Paul D. Tonko, D-N.Y. (20th CD), issued the following news release:

Congressman Paul Tonko (D-NY) announced today that an additional 318,874 borrowers in New York will benefit from the executive action President Obama took yesterday to give up to five million additional borrowers the ability to cap their student loan payments at ten percent of their monthly income. The action opened this repayment option to millions of borrowers nationwide who were previously ineligible, including many borrowers with older loans.

"Student loan debt can fall like an avalanche on the purchasing power of our future leaders in the Capital Region," said Tonko."Recent college grads are entering the workforce with tens of thousands of dollars of debt, which hamstrings their ability to buy a house or a car - and even cuts down on everyday purchases like groceries and clothes that drive our local small businesses and national economic growth. I applaud this move by the President, and I am watching closely what the Senate will do with the Bank on Students Emergency Loan Refinancing Act. Should the Senate pass this legislation, it is my hope the House can put aside partisanship for once and stand up for the tens of millions in student debt in our country."

Under the President's action, a teacher earning about $39,000 with student debt of $26,500 would be able to reduce his or her payments by more than $1,500 a year, compared to the standard repayment plan.

In addition to the President's action, more must be done. Rep. Tonko also announced that 1,581,000 borrowers in New York would benefit by being able to refinance their student loans at lower interest rates if Congress passes the Bank on Students Emergency Loan Refinancing Act (S. 2432; H.R. 4582). The Senate is scheduled to hold a cloture vote on the bill (S. 2432) tomorrow, Wednesday, June 11. State-by-state numbers were made available by the Domestic Policy Council and the Council of Economic Advisers. For the full report, click here (https://demcom.house.gov/sites/default/files/Student%20Debt%20Report%2006%2010%2014.pdf).

Student loan debt recently hit a record $1.2 trillion. Nearly 85 percent of all student loans are government-backed. In New York State, 60% of graduates have debt and the average four year graduate debt in New York is $25,537.

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