ESC-28-14-00022-A New York State Young Farmers Loan Forgiveness Incentive Program
10/1/14 N.Y. St. Reg. ESC-28-14-00022-A
NEW YORK STATE REGISTER
VOLUME XXXVI, ISSUE 39
October 01, 2014
RULE MAKING ACTIVITIES
HIGHER EDUCATION SERVICES CORPORATION
NOTICE OF ADOPTION
I.D No. ESC-28-14-00022-A
Filing No. 806
Filing Date. Sept. 16, 2014
Effective Date. Oct. 01, 2014
New York State Young Farmers Loan Forgiveness Incentive Program
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Addition of section 2201.14 to Title 8 NYCRR.
Statutory authority:
Education Law, sections 653, 655 and 679-f
Subject:
New York State Young Farmers Loan Forgiveness Incentive Program.
Purpose:
To implement the New York State Young Farmers Loan Forgiveness Incentive Program.
Text of final rule:
New section 2201.14 is added to Title 8 of the New York Code, Rules and Regulations to read as follows:
Section 2201.14 New York State Young Farmers Loan Forgiveness Incentive Program.
(a) Definitions. The following definitions apply to this section:
(1) “Approved New York state college or university” shall mean a college or university located within New York State that is accredited by an agency recognized by the United States secretary of education, or by a successor federal agency.
(2) “Award” shall mean a New York State Young Farmers Loan Forgiveness Incentive Program award pursuant to section 679-f of the New York State Education Law.
(3) “Corporation” shall mean the New York State Higher Education Services Corporation.
(4) “Degree” shall mean an undergraduate degree.
(5) “Economically disadvantaged” and “economic need” shall mean applicants who demonstrate the greatest need by dividing their household income by their outstanding student loan debt; the lowest resulting quotient evidences the greatest need.
(6) “Employer” shall mean a legal entity that employs one or more people for wages or salary, including a sole owner without employees.
(7) “Full time” shall mean employment devoted to the operation of a farm in New York State in accordance with the employer’s policy, practice, and standard for defining full time employment.
(8) “Household income” shall mean the federal Adjusted Gross Income (AGI) for individuals or married couples filing jointly, or the aggregate AGI of married couples filing separately, reduced by a cost of living allowance, which shall be equal to the applicant’s eligible New York State standard deductions plus their eligible New York State dependent exemptions for personal income tax purposes.
(9) “Operate” and “operation” shall mean employment in a managerial position, including the management of a component(s) of farm operation.
(10) “Outstanding student loan debt” shall mean the total cumulative student loan balance required to be paid by the applicant at the time of selection for an award under this program. Such outstanding student loan debt shall include the outstanding principal and any accrued interest covering the cost of attendance to obtain an undergraduate degree from an approved New York State college or university.
(11) “Program” shall mean the New York State Young Farmers Loan Forgiveness Incentive Program.
(b) Eligibility. An applicant must:
(1) satisfy the requirements provided in section 679-f of the Education Law;
(2) not be in default on a student loan made under any statutory New York State or federal education loan program or repayment of any award made pursuant to article 14 of the Education Law; and
(3) be in compliance with the terms of any service condition imposed by an award made pursuant to article 14 of the Education Law.
(c) Administration.
(1) An applicant for an award shall:
(i) apply for program eligibility on forms and in a manner prescribed by the corporation. The corporation may require applicants to provide additional documentation evidencing eligibility; and
(ii) postmark or electronically transmit an application for program eligibility to the corporation on or before the date prescribed by the corporation.
(2) A recipient of an award shall:
(i) execute a service contract prescribed by the corporation;
(ii) apply for payment annually on forms prescribed by the corporation;
(iii) confirm annually his or her operation of a farm in New York State on a full time basis by submitting a certification from his or her employer attesting to the recipient’s job title, job duties, full-time employment status (including a copy of the employer’s policy, practice, and standard for defining full time employment), and any other information necessary for the corporation to determine eligibility. Said submission shall be on forms and in a manner prescribed by the corporation; and
(iv) not receive more than ten thousand dollars per year for not more than five years in duration and not to exceed the total amount of such recipient’s outstanding student loan debt.
(3) The outstanding student loan debt shall:
(i) include New York State student loans, federal government student loans, and private student loans for the purpose of financing undergraduate studies made by commercial entities subject to governmental examination.
(ii) exclude federal parent PLUS loans; loans cancelled under any program; private loans given by family or personal acquaintances; student loan debt paid by credit card; loans paid in full, or in part, on or before the first successful application for program eligibility under this program; loans for which documentation is not available; loans without a promissory note; or any other loan debt that cannot be verified by the corporation.
(iii) be reduced by any reductions to student loan debt that an applicant has received or shall receive.
(4) The corporation may impose an administrative offset whereby a payment under this program is withheld, in whole or in part, to satisfy a debt owed to the corporation by the recipient.
(d) Award selection.
(1) For the first year of this program’s operation, awards shall be granted to applicants who are economically disadvantaged with a priority given to those applicants completing the second, third, fourth or fifth year of full time farm operation.
(2) For the second year of this program’s operation and thereafter, awards shall be made in the following order of priority:
(i) applicants who received an award in a prior year and are re-applying to receive an award under this program;
(ii) applicants who are economically disadvantaged, but did not receive an award during the first year of this program’s operation, with a priority given to those applicants completing the second, third, fourth or fifth year of full time farm operation.
(3) All awards are contingent upon annual appropriations.
(e) Abandonment or revocation. Upon prior notice to a recipient, an award may be revoked by the corporation if the corporation determines that the recipient has abandoned their award. Abandonment of an award can be evidenced by:
(1) a failure to apply for payment or reimbursement;
(2) a lack of any contact or communication with the corporation;
(3) a failure to respond to a request for information; or
(4) any other information known to the corporation reasonably evidencing an indication of abandonment by a program participant.
Final rule as compared with last published rule:
Nonsubstantive changes were made in section 2201.14(a), (b) and (c).
Text of rule and any required statements and analyses may be obtained from:
Cheryl B. Fisher, NYS Higher Education Services Corporation, 99 Washington Avenue, Room 1325, Albany, New York 12255, (518) 474-5592, email: regcomments@hesc.ny.gov
Revised Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement
The changes made to the proposed rule were to add applicable sections of Education Law and the Corporation’s right to use an administrative offset through the State Comptroller’s constitutional authority. Also, the definition of the term “employer” was added and the definition of the term “operate” was revised to clarify the meaning of both terms. These changes do not necessitate a revision to these documents and therefore a revised RIS, RFA, RAFA, and JIS are not required.
Initial Review of Rule
As a rule that does not require a RFA, RAFA or JIS, this rule will be initially reviewed in the calendar year 2019, which is no later than the 5th year after the year in which this rule is being adopted.
Assessment of Public Comment
The New York State Higher Education Services Corporation (HESC) is authorized, pursuant to New York State Education Law § 679-f(1), to adopt rules and regulations implementing the New York State Young Farmers Loan Forgiveness Incentive Program.
Following the July 16, 2014 publication of the ‘Notice of Proposed Rulemaking’ in the State Register, HESC received comments throughout the public comment period, which ended with the close of business on September 2, 2014. All substantive comments received are considered and discussed below.
1. Definition of Undergraduate Degree
Comment: In the proposed rule, it states: “Degree shall mean an undergraduate degree.” New York Farm Bureau recommends that this should be interpreted to include applicants who obtained either 2- year or 4-year degrees (Associates or Bachelor’s degrees), with no preference given for length of study.
Response: The term undergraduate degree includes both an associate degree as well as a baccalaureate degree.
2. Definition of an Approved New York State College or University
Comment: Under the definitions section, it states: “Approved New York state college or university” shall mean a college or university located within New York State that is accredited by an agency recognized by the United State Secretary of Education, or by a successor federal agency.” New York Farm Bureau believes that young farmers who chose to study at accredited colleges or universities outside of New York State should also be eligible to receive the Award as well as applicants who received their degrees through accredited online programs. Some young farmers decide to attend schools outside of New York State for a whole array of reasons, and we believe that they should not be penalized for that, especially if they plan on returning to New York to farm. Also by widening the applicant pool to those who received their degrees in other states, it may encourage for young farmers to return or come to New York to establish or take over a business. Applicants who did receive their degrees from an approved New York State college or university could have higher consideration to receive the Award.
Response: To be eligible for an award, the statute requires that an applicant “…shall have graduated and obtained a degree from an approved New York state college or university.” Therefore, the regulation cannot include institutions outside New York State. The regulation defines the term approved.
3. Award Selection
Comment: The proposed rule states: For the first year of this program’s operation, awards shall be granted to applicants who are economically disadvantaged with a priority given to those applicants completing the second, third, fourth or fifth years of full time farm operation. New York Farm Bureau would like to inquire if there is a timeframe after graduation that applicants would be able to receive the Award? New York Farm Bureau recommends that applicants be eligible to apply for the Award at least 10 years after their graduation date. This timeframe enables young farmers the opportunity to learn at other jobs and then join an existing agricultural operation or start their own agricultural business. Many times, recent graduates will go to another farming operation or take a job off the farm, which gives them the time to decide if they would like to return to a family operation or start their own business.
Response: To be eligible for an award, the statute requires that an applicant “…shall apply for this program within two years of college graduation.” Therefore, the regulation cannot provide for applicants to be eligible to receive an award 10 years after their graduation date.
4. Definition of Operate
Comment: The proposed rule states “operate or operation shall mean employment in a managerial position.” New York Farm Bureau believes award consideration should also be given to young farmers who are not in a managerial position. Many young farmers start out on a farm as general employee and make their way up to a managerial position. But this can take years as management ages or as the business transitions to the younger generation. These young farmers will eventually be in an operator position, but need financial assistance now.
Response: Although every young farmer is also a general employee, those individuals coming out of college with a degree are in a leadership track on the farm and are given significant responsibility immediately upon employment. For example, in dairy farm management oversight may include a number of tracks including herd management, calf management, feed management and crop management to name a few. Management for purposes of this law is not limited to the overall management of a farm, but rather includes management of a component(s) of farm operation. The program was created to provide financial assistance to these individuals. Since the current definition is consistent with the purpose of the law, it was amended to clarify that a managerial position includes management of a component(s) of farm operation.
5. Verification of Employment Status
Comment: The proposed rule states: “(iii) confirm annually his or her operation of a farm in New York State on a full time basis by submitting a certification from his or her employer attesting to the recipient’s job title, job duties, full-time employment status (including a copy of the employer’s policy, practice, and standard for defining full time employment), and any other information necessary for the corporation to determine eligibility.” An applicant may be the sole-proprietor of his/her business and may not have an employer with which to verify their employment status. New York Farm Bureau believes applicants should not be detrimentally impacted if they are the sole-operator of their business and that other means of verifying their operation of a farm, including the submittal of a schedule F, would serve to prove that the applicant is an operator of an agricultural operation. However, a sole-proprietor would still be required to submit all related job information to the corporation.
Response: The term “employer” was intended to include sole proprietors. For clarity, the regulation was revised to define the term “employer” to mean a legal entity that employs one or more people for wages or salary, including a sole owner without employees.
