For many New Yorkers, October is one of their favorite months, as autumn usually adds an almost magical touch to the landscape of the Big Apple, without the cold being so intense. But for thousands of federal student loan debtors, with whom low-income professionals manage to make the dream of completing a professional degree, a master’s degree or a doctorate come true, this October means the return of a severe headache.
This is how Steven Jaramillo, a 32-year-old psychologist, describes it when referring to the end of the pause on student debt payments that was in effect for three years, as a relief that the federal government granted in the midst of the pandemic, but that ended this month, when debtors like him will have to start making payments again.
The measure was lifted, and thousands of students will once again receive the “stressful bills,” as stated by the Colombian father, who has a debt close to $40,000, which because before the pause he had only been able to make the minimum payments, the value they lent you nine years ago has remained almost intact.
“The debt is choking me, and I confirmed it during these three years, that thanks to the pause in payments, for the first time in a long time I felt that I was able to have a break. But since it was not something permanent, as it should have been, the headache returned again, because I have to start paying again,” says the debtor, who called on the State to promote financial relief, not only for the already delinquent but for young people who are just starting university.
“The pause in payments was only like a pill that one takes to make the pain go away, but now one is going to feel that pain stronger, because one had already forgotten about the debt for a long time,” he added. the professional, who emphasized his call for “help.” “We are millions of low- and middle-income people suffering from eternal debt, and many little boys who have the desire and ability to study, sadly, will soon enlarge that group. What they (the governments) should do is forgive our federal student loans and the State will also help us all to free ourselves from student debts with private companies, which kill us with the interest.”
And not only did the pause in student debt payments help thousands of professionals throughout New York, as a lifeline in times of crisis, but also the total forgiveness of their obligations, as stated by lawyer Marisol Cordero, who benefited from these federal initiatives. The 41-year-old debtor, who works as an advocate in housing cases, and who was born and has lived in the Bronx, raised her voice to create a path that leads to a total cure for student debt for everyone, because It makes the difference between being in “an eternal hole” or being able to start being successful.
“When I graduated from school, and wanted to go to college, and law school, I got into $125,000 in federal debt and a $110,000 private student loan, and for many years those debts did not allow me to prosper, until the point that being a professional, I lived in the basement of my parents’ house, because I couldn’t even afford the rent for my own apartment,” says the debtor, of Puerto Rican origin.
The Puerto Rican woman claims that after graduating from university she had to pay monthly installments of more than $800, from the federal loan and $500 from the private loan, only in minimum payments, which made her feel “stifled” to survive and without being able to make progress in your personal and financial life.
“It is very hard to see that one studies and becomes a professional and because of the debts he does not raise his head. Although I love my job and I am very happy doing what I do as a lawyer, I have not been able to be successful in terms of resources or property, or even in having my own family, because I would not be able to afford childcare services,” assures the lawyer.
“I had depression, I thought I would never be able to move out of my parents’ basement. I felt very down. It was like being a prisoner in a tunnel without seeing the light at the end. And although I still have private debt, the truth is that federal relief helped me move, to move to an apartment in a cooperative, although I am still struggling to make ends meet,” adds the Latina.
The New Yorker warns that it is ironic to see that her parents, without professional studies, have managed to be more successful than her, among other things because they did not have high debts for university programs as is her case, which is why she urged that those who Starting this month they must start paying their creditors again. In passing, he stressed that student loan debtors are almost left to their own devices if ways to alleviate their financial burdens are not promoted, since unlike other debts, educational credits cannot be included in forms of unpaid money, such as declaring in bankruptcy, which does work for other types of debts.
“It is urgent that the Federal and State governments create more incentives to forgive more debts to professionals who do work of public interest,” says the defender. “I urge you, please, to help students with their payments, to continue debt forgiveness programs and expand them so that people can focus on having a better quality of life, on being able to have a home, Because if not, many will even die and will never finish paying what they owe and will always be without a respite.”
It is estimated that in New York, almost 2 and a half million people have student debt, making it the fourth state with the largest number of borrowers in the United States, with obligations that amount to $92.7 billion. 33.20% of New York university students use federal loans to pursue their degrees, 56.40% are under 35 years of age, although the average debt they have is $37,678, 2.60% of borrowers owe more than $200,000 dollars.
The Attorney General of New York, Letitia James, called on debtors who must start paying their obligations again this month, to be well informed about how to manage their federal loans, and warned to be extremely careful with scammers who pretend to be pass through student loan servicers and can be taken advantage of.
“With federal student loan payments resuming in October, there is a lot of anxiety and confusion on the part of students, borrowers and families,” the Attorney General said. “To help address this situation, I encourage New Yorkers to follow these tips to better manage their federal student loans and take advantage of programs aimed at easing the burden of student debt. I also urge borrowers to be wary of scammers who claim to help relieve student debt. “Anyone who believes they have been a victim of a student debt relief scam should contact my office immediately.”
Among other things, Prosecutor James urged debtors, who must receive a bill indicating how much they must pay each month, at least 21 days before the due date, to review their loan servicer account for greater clarity and Do not panic.
The first step is to log into your StudentAid.gov account and verify the loan servicer, as several have changed during the pandemic, and there you will be able to find out the current balance of the student loan, the amount to be paid and the interest rate. Likewise, it is recommended to keep contact information up to date.
“Studentaid.gov is the DOE’s website for federal student loans, and you can access information about your federal student loans, as well as apply for repayment plans, consolidate your federal student loans, and find more information about repayment. If you do not have an account, you can apply for an FSA ID online,” added Attorney James’ Office, which stated that debtors can also check if they are eligible for the Biden Administration’s new SAVE Plan.
“The payment plan will reduce monthly payments to $0 for millions of borrowers earning $32,800 or less, or $67,500 for a family of four, and save all other borrowers at least $1,000 per year. Borrowers who are already enrolled in the current Revised Pay What You Earn (REPAYE) plan will be automatically enrolled in the SAVE plan,” the Prosecutor’s Office stated. “Investigate an income-driven repayment plan (IDR) if you think your payments will be too high, which can help provide a lower monthly payment amount based on your income and family size. Depending on your circumstances, IDR payments can be as low as $0.”
And in the midst of the end of the pause on student loan payments, organizations such as the Legal Aid Society and ALAA (Legal Aid Lawyers Association), called on the State government to pass laws that would increase aid to lawyers that serve the public interest, so that they can fulfill their obligations. Specifically, they asked Governor Kathy Hochul and the Legislature to strengthen the Legal Services Attorney Loan Forgiveness Program (DALF), administered by the New York State Higher Education Services Corporation, which would increase aid up to $8,000 or award eligibility of up to $64,000 total.
Currently attorneys who serve the public interest can receive up to $3,400 per year, and up to a total of $20,400 over six years, which Legal Aid says puts them far behind the award amounts allocated to other professions such as registered nurses in teaching faculties and social workers, who perform vital functions, who have lower debts than lawyers.
“Lawyers who serve the public interest play a vital role in our legal system, ensuring that low-income New Yorkers have the enthusiastic representation they need and deserve,” said Twyla Carter, chief attorney and executive director of The Legal Aid, who asked Albany to increase student loan assistance. “But with the return of student loan payments, along with the rising cost of living, rent and inflation in New York, our inability to compensate staff with a market-level salary, more are leaving every day.” the profession completely. This harms the people we represent, causes delays in cases and makes true access to justice difficult.”
Lisa Ohta, president of the Legal Aid Lawyers Association, called on the state Legislature to prioritize the bill to bolster student loan assistance.
“Many ALAA members and other lawyers who serve the public interest come from the same communities they seek to serve, but the high cost of law school and low salaries in the government and nonprofit sectors make this career choice is increasingly difficult to sustain,” said the defender. “In this upcoming session, Albany has a real opportunity to support its own constituents by ensuring that experienced attorneys dedicated to serving the public can afford to remain in their positions and jobs.”
Diario NY consulted the office of the Governor, Kathy Hochul, about the type of support that the State can provide in the midst of the reactivation of student debt payments, and although they did not refer in detail to the requests of students to receive relief and forgiveness of their credits, affirmed that they are committed to supporting new students and that they will review the legislation requested by Legal Aid, if it is approved by the Legislature.
A spokesperson for the Governor’s Office assured that as part of the fiscal year 2024 budget, Governor Hochul announced “a historic level of support for SUNY and CUNY campuses and students, including $256 million nes in new recurring general operating aid and $125 million for one-time investments in transformative campus initiatives that support innovation.” On the other hand, they highlighted the expansion of transfer pathways on 19 campuses of the State University of New York that will help more community college students continue their higher education and complete their bachelor’s degree.
Student debt in NY in figures
- An estimated 2.46 million people have student loan debt in NY
- The 4th state with the highest number of debtors in the country is NY
- $92.7 billion is the estimated amount of student loan debt in New York
- $37,678 is the average debt per student in New York
- 56.40% of student loan debtors are under 35 years old
- 15.90% of borrowers owe less than $5,000
- 22.30% of debtors owe between $20,000 and $40,000 dollars
- 2.60% of borrowers owe more than $200,000
- 33.20% of New York College Students Turn to Federal Student Loans
- 17.20% of students in 2-year programs in NY choose to take out student loans
Data to take into account
- To find out if your loans are public or private, visit the FSA online or call 1-800-4-FED-AID.
- You can find more information about how to protect yourself from student loan scams on the NY Attorney’s Office website and the DOE website.
- Any New Yorker who believes they have been a victim of a student debt relief scam should contact the NY Attorney by calling 1(800) 771-7755 or by filing a complaint online.