New York Governor

FILE - In this April 12, 2017 file photo provided by the Office of Governor Andrew M. Cuomo, Hillary Clinton applauds as Gov. Cuomo speaks from the podium at LaGuardia Community College in the Queens borough of New York during a ceremonial bill signing of the a first-in-the nation free tuition plan for students from middle-class families. (Darren McGee/Office of Governor Andrew M. Cuomo via AP, FIle)

Darren McGee

With total student loan debt exceeding $1 trillion, Gov. Andrew Cuomo wants to boost protections for New Yorkers who require financial assistance to pay their way through college. 

Cuomo released his latest 2018 State of the State proposal Friday aimed at student loan debt. The four-point plan must be reviewed and approved by the state Legislature. 

The governor's agenda includes establishing a student loan ombudsman at the state Department of Financial Services who would help address student complaints and provide educational information about loans. For students who have defaulted on loans, the ombudsman would provide free financial assistance. 

Cuomo wants to create a state-level ombudsman because of uncertainty with the federal ombudsman program available through the Consumer Financial Protection Bureau. Some Republicans support disbanding the bureau, which was created in the aftermath of the Great Recession. 

There is also concern about the direction of the bureau under President Donald Trump. Trump selected his budget director, Mick Mulvaney, to lead the bureau. Mulvaney, who served in Congress before joining the Trump administration, has been a longtime critic of the agency. 

Cuomo's State of the State plan would require colleges to give students a detailed summary of their borrowing. This annual breakdown would include the amount of student loans incurred to date, a range of how much it would cost to pay off the loans and the monthly repayment amount for the loans. 

The governor's office noted that this proposal would expand on the financial aid award information sheet used to educate students about college costs. 

Cuomo also wants to boost consumer protection standards within the student loan industry. His plan includes a ban on upfront fees in New York, requiring "clear and conspicuous" disclosures to borrowers and penalties for lenders that violate state law. 

Student loan servicers would be required to obtain a license from the state Department of Financial Services and abide by certain standards, similar to regulations that exist for the mortgage lending industry. 

Another protection sought by Cuomo is to ensure individuals with professional licenses aren't impacted by their student loan debt status. The governor's office said there are 19 states that will suspend professional licenses if a borrower is late in making student loan payments or has defaulted on their loans. 

Critics note that the practice is punitive because it not only prevents the individuals from providing for their families, it makes it even more difficult for them to pay off their loans. 

Cuomo wants to prohibit state agencies from suspending professional licenses of New Yorkers who are behind on student loan payments or have defaulted on their loans. 

Student loan debt has been growing in recent years and now totals $1.48 trillion. In New York, the average borrower owes more than $30,000 in student loans. 

"Today, a college education is a necessity for a middle class life, yet the crushing weight of student loan debt often keeps New Yorkers from buying homes, cars and ultimately limits their ability to save money and invest in their futures," Cuomo said. 

Cuomo has focused on student loan debt in the past. In 2015, he advocated for the launch of a state student loan forgiveness program to benefit those earning up to $50,000 annually. 

Last year, one of his top legislative priorities was the creation of the Excelsior Scholarship, which coupled with other federal and state programs would provide free tuition to eligible students at New York's public colleges and universities. 

One reason Cuomo supported the tuition-free college benefit is that it would help reduce the student loan debt burden. But his latest plan to address loan debt would go further. 

"With this proposal, we build on the success of the Excelsior Scholarship and lay out a concrete road map to alleviate the burden of student debt in New York and equip our students with the protections and the tools they need to succeed," Cuomo said. 

The proposal is one of several Cuomo has released ahead of his State of the State address next week. He will outline his legislative agenda Wednesday in Albany. 

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