New York State Cancels Big Fee on Outstanding Student Debt

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ALBANY, N.Y. (WENY) – New Yorkers who owe outstanding debts to the State for educational expenses will no longer have to fork over an additional fee after Governor Kathy Hochul signed legislation banning the practice.

Prior to the signing of this legislation, the Office of the Attorney General was required, by law, to recover its costs in pursuing collection of this educational debt through an additional fee of up to 22 percent of the total outstanding debt.

“By signing this legislation, we are removing a barrier to higher education and ensuring that students can graduate without debilitating debt that has disproportionately hurt students least able to afford it. Every New Yorker deserves access to a quality education without fear of getting trapped in a cycle of debt,” said Hochul in a press release.

For many borrowers with outstanding debt to the State, when that fee was then added on top of the total debt due, getting out of debt becomes substantially more difficult.

“When students across New York spoke up about the difficulties of digging out of debt, my administration listened,” Hochul said in a prepared statement.

New York Attorney General Letitia James celebrated the news in a press release.

“Charging fees to students already struggling with debt only compounds the problem. This law addresses that inequity and is an important step in helping these New Yorkers become financially stable. I was proud to push for this legislation and commend the bill sponsors and Governor Hochul for taking this action,” James said.


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