As federal student loan interest payments restart this month, Mayor Eric Adams has decided to give eligible New Yorkers a break and expand the student loan reduction and college savings program.
“A college education can help New Yorkers go far, but the financial burden of that education can be overwhelming,” said Adams in a recent op-ed. “For far too many New Yorkers, pursuing a college degree leads to a lifetime of debt.”
The city announced a loan pilot program in May with Summer — a local company focused on simplifying student loan and education assistance for employees — in an effort to help public servants and their family members keep up with payments. In the few months it’s been operational, the pilot program has helped thousands of city employees at the New York City Administration for Children’s Services (ACS), New York City Department of Social Services (DSS), and New York City Housing Authority (NYCHA) agencies apply for Public Service Loan Forgiveness and Income-Driven Repayment Plans, according to the city.
The program is expanding to include eligible city residents — an estimated 1.4 million New Yorkers who have student loan debt or are enrolling in college with assistance, said the city. The program could lower student loan payments by an average of $3,000 per year and $7,000 per year for people with advanced degrees.
For loans, Summer will help borrowers check eligibility for the DOE’s income-driven repayment plan and loan forgiveness programs, manage student debt, and avoid default and/or forbearance. To save on college costs, Summer connects borrowers to financial counselors and trained experts.
“Student loan repayment and college cost planning are increasingly complex processes to navigate,” said Summer Founder and CEO Will Sealy in a statement. “Thankfully, the City of New York is stepping up to provide additional access to resources, tools, and programs to reduce that complexity. In just the first three months of the city employee program, the city has achieved $13.8 million in savings and a $3,800 average reduction in annual student loan payments.”
The U.S. Department of Education initially paused federal student loan payments back in March 2020, due to the COVID pandemic. Former President Joe Biden then implemented a one-year grace period and launched the Saving on a Valuable Education (SAVE) plan, which put eligible loans in forbearance with a 0% interest rate, in 2023. In 2024, a Republican-led effort to block the SAVE plan played out in the courts. Earlier this year, a second federal court injunction ended the 0% interest rate. The Education Department restarted the collection process for outstanding loans on August 1.
“We applaud New York City for stepping up and providing a service to help borrowers navigate the current uncertainty and chaos in the student loan system,” said Winston Berkman-Breen, legal director of the Student Borrower Protection Center, in a statement. “New York continues to set the standard nationally for how cities can address the student loan crisis, especially by meeting borrowers where they are and offering individualized assistance.”