New York’s student loan forgiveness program covers 24 monthly payments. Here’s what borrowers need to know

With the fate of the Biden administration’s sweeping student loan forgiveness plan uncertain and headed to the Supreme Court, borrowers in New York state may have another option for relief.

The ‘Get On Your Feet’ Loan Forgiveness Program, rolled out in 2015, is meant to “invest in recent college graduates with student loan debt who opted to invest their futures in New York,” said Angela Liotta, public information officer and director of communications at the New York State Higher Education Services Corp.

Under the program, certain residents of the state may be eligible for student loan forgiveness on up to 24 months of payments.

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There are around 2.5 million people with federal student loan debt in New York, who collectively owe almost $100 billion, according to higher education expert Mark Kantrowitz.

Here’s what borrowers need to know about the program.

The state relief is available to legal residents of New York who have lived in the state for 12 consecutive months or more. If you’re employed, you need to be working in the state, too.

Among other requirements, applicants must have graduated from a New York high school, or have received a New York state high school equivalency diploma, as well as attended a college or university in the state and earned their undergraduate degree in or after December 2014.

You also need to apply for the program within two years of graduating.

To qualify for the program, 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.

The program excludes those who have an adjusted gross income of more than $50,000 a year.

Not all student loans qualify for the state relief.

Under the Direct loan program, subsidized and unsubsidized loans are eligible. Federal Family Education Loans (FFEL) may not qualify, although you might be able to consolidate these loans into the Direct program. Private student loans are ineligible.

Meanwhile, loans taken our during graduate school are also typically excluded from the state forgiveness, and to qualify for the program you need to have no more than a bachelor’s degree at the time of applying.

Unsure of what kind of student loans you hold? You can check on Studentaid.gov.

Under the Get On Your Feet Loan Forgiveness Program, New York state may cover your full student loan bill for up to 24 months under a qualifying income-driven repayment plan.

The state makes the payments directly to your student loan servicer.

The loan forgiveness could have tax implications. Recipients will get a 1099 form from the state, and are encouraged to contact a tax professional, the IRS or the New York State Department of Taxation and Finance for more information.

Federal student loan payments have been on pause since March 2020, due to a pandemic-era policy, and will remain suspended until after the litigation around the Biden administration’s student loan forgiveness plan resolves, or by the end of August — whichever comes sooner.

Although you can apply for the Get on Your Feet Loan Forgiveness Program now, applications will be reviewed for eligibility once federal student payments restart, Liotta said. Still, if you believe you qualify, it’s a good idea to request the relief now because of the requirement that you apply within two years of graduation.

Don’t qualify for this program? New York has a list of other state and federal student loan forgiveness programs.