The City Council unanimously passed Council Member Helen Rosenthal’s legislation yesterday ensuring that all City employees are automatically informed.
This included that they may be eligible for public service loan forgiveness — under either a federal or state program.
Student loan forgiveness has the potential to change the long-term economic future of millions of U.S. employees who have dedicated their careers to public service. Council Member Rosenthal’s bill helps to ensure that New Yorkers seize this critical opportunity.
In addition to mandating that the City alert its 330,000 employees that they may be able to eventually cancel their student debt, the NYC Office of Labor Policy & Standards (OLPS) will be required to conduct an outreach and education campaign within New York’s massive non-profit sector.
In addition to mandating that the City alert its 330,000 employees that they may be able to eventually cancel their student debt, the NYC Office of Labor Policy & Standards (OLPS) will be required to conduct an outreach and education campaign within New York’s massive non-profit sector.
Non-profit employers will be strongly encouraged to share information about student loan forgiveness with the more than 600,000 workers who are an essential part of our social safety net.
“We all know that student loan debt is essentially crushing millions of Americans, New Yorkers included,” said Council Member Rosenthal. “The debt that so many are carrying prohibits them from building long-term careers in public service, because their salaries simply cannot sustain the loan payments. We need our best and brightest working in service of our city. In order to recruit and keep them, ensuring they are aware of available financial relief is the least we can do.”
Why is this bill necessary?
An estimated 1 million New Yorkers owe student loans, and student loan debt in the U.S. has reached staggering levels.
Borrowers across the country now collectively owe an estimated $1.57 trillion, and this debt is a key reason why so many Americans cannot achieve financial stability.
Borrowers across the country now collectively owe an estimated $1.57 trillion, and this debt is a key reason why so many Americans cannot achieve financial stability.
To add insult to injury, millions of American workers are actually eligible for student debt relief but have not received it.
According to the Consumer Financial Protection Bureau, up to a quarter of the U.S. workforce is in public service (employed by the government or a non-profit organization) and may be eligible for existing student loan debt forgiveness programs.
There are a number of reasons why Americans working in public service are not able to successfully obtain loan forgiveness.
Much of it has to do with how the forgiveness programs are structured. But another central reason is lack of awareness, which the legislation passed yesterday is designed to address.
The timing of Council Member Rosenthal’s bill is critical. President Biden is taking steps now to make the federal public service loan forgiveness program more accessible to Americans working in government and the non-profit sector.
The federal Department of Education is simplifying the loan forgiveness process, and retroactively relaxing particular rules and requirements. Of special note – this includes expanding the types of loans that qualify for forgiveness.
The changes underway could assist roughly 550,000 borrowers. Public awareness about loan forgiveness has never been more important.
The changes underway could assist roughly 550,000 borrowers. Public awareness about loan forgiveness has never been more important.
“Awareness will encourage more New Yorkers in public service to pursue loan forgiveness and not delay action. To be clear, I support the growing movement across our country to cancel a large portion of student loan debt entirely. My common-sense legislation is a first step toward assisting all those who have devoted their lives to serving others to build a brighter financial future,” said Council Member Rosenthal.
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