For many recent graduates, repaying their education debt obligations can be a struggle. For some in New York, that struggle just got a little less cumbersome thanks to a recently launched student loan forgiveness program that aims to help the debtors land on their feet after graduation.
CNN Money reports that the state’s Get On Your Feet program, first proposed last year, will pay up to two years of student loan bills for eligible residents who have encountered trouble paying down their debt.
Recent grads are eligible for the program if they earn less than $50,000 a year, graduate from a college or university located in New York after Dec. 2014, and currently live in the state.
Additionally, grads must already be enrolled in the federal government’s income-based Pay As Your Earn (PAYE) program. That program allows borrowers to pay 10% a year of their discretionary income in monthly installments.
Once enrolled in Get On Your Feet, the state will pay the difference between what the federal government covers under PAYE and the remaining loan payment.
The state program will only cover the cost of residents’ monthly bill on federal loans. Private loans are not eligible under Get On Your Feet.
“Ensuring students are able pay for college and not saddled with debt is critical for both their individual success and the continued economic growth of New York State,” New York Gov. Andrew Cuomo said.
The governor’s office estimates that 7,100 recent graduates will take advantage of the program, which went live Dec. 31.
By 2020, the office expects 24,000 New York graduates to enroll in the program, resulting in an estimated total debt forgiveness tab of $41.7 million.
CNN points out that New York’s program is the first to offer student loan forgiveness based on income, but that at least 35 other states have similar programs that take into consideration a debtor’s work or where they live.
In the past, some cities have used debt forgiveness as a tool to keep young adults in their areas. In 2014, Niagara Falls offered to repay a of recent graduates’ student loans in exchange for living in the city for two years.