New York Codes, Rules and Regulations
Title 21 - Miscellaneous
Chapter LVIII - New York State Teachers' Retirement System
Part 5004 - Loans
Section 5004.10 - Loan default
Universal Citation: 21 NY Comp Codes Rules and Regs ยง 5004.10
Current through Register Vol. 46, No. 12, March 20, 2024
(a) A loan shall be considered to be in default when a payment has not been made by the due date for such payment or within three months following such date.
(b) In the event of default, the system shall be authorized to collect such payment due from the employer of such member through payroll deduction and such member shall forfeit all future entitlement to borrow from the system until the unpaid balance of the loan outstanding at the time of default is fully paid.
(c) In the event of default by a Tier I or II member:
(1) if the member is not employed as
a teacher under article 11 of the Education Law at the time of default, the
loan shall be closed to the annuity savings account;
(2) if the member has claimed bankruptcy, the
loan shall be closed to the annuity savings account;
(3) any loan which has been declared in
default and closed to the annuity savings account of the member may not be
repaid as a loan. Should such a member desire to repay his defaulted loan, he
must do so by making a special arrangement with the system to make an
additional contribution to his annuity savings account.
(d) In the event of default by a Tier III, IV or V member:
(1) the loan shall continue to
accrue interest charges until repayment in full, death, withdrawal or
retirement;
(2) the system shall
have no right to bring suit in any court against any member to enforce the
amount due and the system's sole remedy upon death, retirement or withdrawal
shall be to offset the amount outstanding including interest from the member's
account or other benefits payable to or on behalf of the member;
(3) repayment of a defaulted loan must be
made by bank or certified check or money order.
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