NY Educ L § 693 (2021)
2021 New York Laws EDN - Education Title 1 - General Provisions Article 14 - New York State Higher Education Services Corporation Part 5 - The New York Higher Education Loan Program 693 - Repayment of Loans.

§  693.  Repayment  of  loans.  1.  Terms  of  repayment. The terms of repayment  of  education  loans  made  under  this  program   shall   be established  in  rules  and  regulations  promulgated by the corporation subject to the approval of the state of  New  York  mortgage  agency  or other  public  benefit  corporation  authorized to issue bonds under the public authorities law for purposes of  this  program  with  respect  to loans that are expected to be financed by such entity.   2.  Grace  period.  The  terms of any grace period for education loans made under this program shall be established in  rules  and  regulations promulgated  by  the corporation subject to the approval of the state of New York mortgage agency or other public benefit corporation  authorized to  issue  bonds  under  the public authorities law for purposes of this program with respect to loans that are expected to be financed  by  such entity.  Notwithstanding,  the grace period established shall be no less than six months.   3. Forbearance and deferments. Education loans made under this program shall be eligible for in-school  and  military  deferments  pursuant  to rules  and  regulations  promulgated  by the corporation, or pursuant to such additional deferments and/or forbearance as offered by an  eligible lender,  in  each case, subject to the approval of the state of New York mortgage  agency,  or  other  authorized  public   benefit   corporation authorized  to issue bonds under the public authorities law for purposes of this program, with respect to loans that are expected to be  financed by  such  entity. Upon the assignment of a defaulted education loan made under this program for collection as described in  subdivision  five  of this  section,  the  borrower  shall  no  longer  be  eligible  for  any forbearance or deferments while such loan remains in default.   4. Delinquency. A  borrower  shall  be  considered  delinquent  on  an education  loan under this program after thirty days of non-payment. The holder shall notify the corporation promptly  after  the  first  day  of delinquency  and  the  corporation shall undertake actions to return the borrower to repayment pursuant to rules and regulations  established  by the  corporation.  Such  actions  shall  include, but not be limited to, attempts at: (i) locating and contacting the borrower and/or  co-signer, as  applicable,  regarding  the  delinquent  status  of their loan; (ii) explaining the account history and clarifying any  discrepancies;  (iii) counseling  the  borrower and/or co-signer, as applicable, regarding all available  repayment  options,  inducing  deferments,  and  any   public assistance  available  to  them;  (iv)  providing  the  borrower  and/or co-signer, as applicable, with documentation in  connection  with  their loan   or  loans;  (v)  informing  the  borrower  and/or  co-signer,  as applicable,  of  the  consequences  of  default;  and  (vi)  any   other assistance that would prevent a default by a borrower.   5.  Default.  Any education loan under this program that is delinquent for one hundred eighty days shall be deemed in  default.  Upon  default, the  holder  shall file a claim with the corporation and, if applicable, the state of New York mortgage agency, for payment  from  the  New  York education  loan program variable rate default reserve fund, the New York education loan program fixed rate default reserve fund, or the state  of New York mortgage agency New York education loan program default reserve fund,  as  described  in subdivision seven of section six hundred ninety two of  the  education  law,  as  applicable,  pursuant  to  regulations promulgated by the corporation. Upon receipt of a claim, the corporation shall  notify  the  borrower  that  their  loan is being assigned to the corporation for collection. The lender, or  holder  shall  be  paid  one hundred percent of the outstanding principal, and of the capitalized and unpaid  accrued  interest.  Upon  such payment, this amount shall be the principal owed by the borrower.    All collection payments received by the corporation from  a  borrower, or  on behalf of borrowers, in default on loans made under this program, except collection fees shall be  deposited  into  a  designated  account within  the New York higher education loan program variable rate default reserve  fund, New York higher education loan program fixed rate default reserve fund, or the state of New York mortgage agency New  York  higher education loan program default reserve fund, as applicable.   6.  Collection  fee. The corporation shall assess a collection fee, in an amount to be determined by the corporation at least annually, on  all defaulted education loans under this program. This fee shall be retained by  the corporation for the administration of the program. The aggregate annual revenue generated by such fee shall not exceed the  actual  costs incurred  by  the  corporation,  in  the preceding year, in collecting a defaulted loan under this program on which the corporation  has  paid  a claim,  except  in  the initial year for which such fee shall not exceed the fee charged by the corporation for the collection of defaulted loans under the federal family education loan program. Any amounts  in  excess of actual cost shall be used to reduce the fee charged in the subsequent year.   7.  Administrative wage garnishment. (a) Notwithstanding any provision of law to the contrary, the corporation shall be entitled to garnish the disposable pay of an individual  to  collect  the  amount  owed  by  the individual, if such individual fails to make required voluntary payments under a repayment agreement with the corporation, provided that:  (i)  The  amount  deducted  for any pay period does not exceed fifteen percent of disposable pay. However, the amount deducted for  any  period may exceed fifteen percent with the written consent of the individual;  (ii)  Prior to garnishment the individual shall have been given thirty days written notice to the individual's last known address advising such individual  of  the  nature  of  the  obligation,  amount  of  the  loan obligation,  the  corporation's  intent to garnish and an explanation of the individual's rights  under  this  section  including  the  right  to inspect and copy records relating to the debt;  (iii)  The  individual shall have been given an opportunity within the aforementioned thirty days to enter into a written  repayment  agreement with the corporation to avoid garnishment of wages;  (iv)  The  individual  shall  have  been provided an opportunity for a hearing  pursuant  to  the  requirements  of  paragraph  (f)   of   this subdivision.  (b)  The individual's employer shall pay to the corporation amounts as directed in the withholding order and shall be  liable  for  failure  to comply  with  said order. The corporation may sue an employer in a court of competent jurisdiction to recover from such employer the  amount  the employer fails to withhold from the individual's wages following receipt of  the  order of withholding with interest thereon plus attorneys' fees and costs;  (c) The notice of withholding served upon the employer  shall  contain only  such  information  as is necessary for the employer to comply with the withholding order.  (d) No amount may be deducted from the wages of an individual who  has been   involuntarily   separated   from  employment  and  has  not  been continuously employed for twelve months. An individual must  prove  that separation   from   employment   was   involuntary.  Separation  due  to incarceration shall not qualify as involuntary separation.  (e) An employer may not discharge from employment,  take  disciplinary action  against  or refuse to employ an individual by reason of the fact that such individual's wages are subject to  an  order  of  withholding. Such  individual  may  take  action  against said employer in a court of  competent jurisdiction for  reinstatement,  back  pay  or  such  further relief as may be just and necessary.  (f)  A  hearing  as described in subparagraph (iv) of paragraph (a) of this subdivision shall be provided prior to an order of  withholding  if the  individual submits a written request for a hearing on or before the fifteenth day following the notice described  in  subparagraph  (ii)  of paragraph  (a)  of  this  subdivision  in accordance with procedures set forth by the corporation. If an individual fails  to  submit  a  written request  in the time frame provided, the corporation shall still provide a hearing upon receipt of a written request, but such hearing  need  not be  provided  prior  to  an  order  of  withholding  being issued to the employer. The hearing shall not  be  conducted  by  a  party  under  the supervision  or  control  of  the  corporation except that nothing shall prohibit the corporation from appointing an administrative law judge.  A hearing  decision  shall  be  issued  no later than sixty days after the filing of the petition requesting the hearing.  (g) For purposes of this section "disposable pay" shall mean that part of the compensation of any individual from an employer  remaining  after deduction of amounts required to be withheld by law.  (h)  All  funds received through administrative wage garnishment shall be deposited into a  designated  account  within  the  New  York  higher education  loan program variable rate default reserve fund, the New York higher education loan program fixed rate default reserve  fund,  or  the state of New York mortgage agency New York higher education loan program default reserve fund, as applicable.   8.  New  York  state  tax offset. The corporation shall be entitled to receive credits of New York state tax overpayments pursuant  to  section one  hundred  seventy-one-d  and  paragraph  three of subdivision (e) of section six  hundred  ninety-seven  of  the  tax  law  with  respect  to defaulted  education  loans  under  this program. All funds, or credits, received through such tax offsets shall be deposited into  a  designated account  within the New York higher education loan program variable rate default reserve fund, the New York higher education loan  program  fixed rate  default reserve fund, or the state of New York mortgage agency New York higher education loan program default reserve fund, as applicable.   9. Data share. The corporation shall be entitled to receive data  from the  New  York  state  department  of  taxation  and finance pursuant to section one hundred seventy-one-a and paragraph three of subdivision (e) of section six hundred ninety-seven of  the  tax  law  with  respect  to defaulted education loans under this program.   10. Statute of limitation. Notwithstanding any provision of law to the contrary,  there  shall  be  no  statute of limitations to bring suit or otherwise collect an education loan under  this  program.  Judgments  in favor  of  the corporation under this program shall not expire and there shall be no statute of limitations upon which to enforce or collect said judgment.   11. Capacity  of  minors.  Any  person  otherwise  qualifying  for  an education loan under this program shall not be disqualified by reason of his or her being under the age of eighteen years and for the purposes of applying  for, receiving and repaying such a loan, any such person shall be deemed to have full  legal  capacity  to  act.  The  corporation,  in collecting education loans under this program, shall not be subject to a defense raised by any borrower based on a claim of infancy.   12.  Usury.  Notwithstanding  any provision of law to the contrary the rate or amount of interest or fees payable on education loans made under this program shall not exceed twenty-five per centum per  annum  or  its equivalent rate for a longer or shorter period.    13.  Death  and disability discharge. Upon the death of a student, for the funding of whose higher education expenses  an  education  loan  was made,  the  education  loan  made  under  this  program  shall be deemed discharged.  If such a student becomes totally and permanently disabled, the  education  loan  under  this  program shall be deemed discharged. A total or permanent disability shall mean a condition  of  an  individual who  is  unable  to  work and earn money because of an injury or illness that is expected to continue indefinitely or result in death. The holder of such  discharged  education  loans  shall  be  paid  the  outstanding principal, capitalized and unpaid accrued interest due from the New York higher  education  loan  program variable rate default reserve fund, the New York higher education loan program fixed rate default reserve  fund, or  the state of New York mortgage agency New York higher education loan program default reserve fund, as applicable.   14. Bankruptcy. Education loans under this program shall be considered non-dischargeable pursuant to section 523(a)(8) of the  U.S.  Bankruptcy Code.   15. Notwithstanding any other provision of law, other than section one thousand  six  hundred  eighty two and section two thousand four hundred five-a of the public authorities law, a security interest  in  education loans  shall be perfected only by the filing of a financing statement in the manner provided under section 9-310 of the uniform commercial  code, and  shall  attach and be assigned priority in the manner provided under the uniform commercial code with respect to security interests perfected by such  a  filing,  and  a  description  of  collateral  consisting  of education  loans in any financing statement shall be conclusively deemed to be legally sufficient if it refers to records identifying such  loans retained  by  the  corporation, provided that any such security interest shall be subject to any applicable lien under section two thousand  four hundred five-a of the public authorities law. The owner of any education loan shall advise the corporation of any sale or assignment of such loan at the time and in the manner required by the corporation.   16.  Notwithstanding  any  other provision of law, any eligible public college or public career education institution is hereby  authorized  to enter  into  one  or more agreements with the corporation and any entity authorized to finance education loans pursuant to the public authorities law providing for the participation of such college or career  education institution in the program and to perform or contract the performance of its  obligations  under any such agreement. Such obligations may include without limitation the payment obligations described in this title.