NYS Office of the Comptroller DiNapoli: Wall Street's 2024 First Half Profits of $23.2B Were 79.3% Higher Than Last Year

 

After Pandemic Highs, Annual Profits in 2022 and 2023 Still Modestly Above Pre-Pandemic Average

Wall Street’s $23.2 billion in pretax profits for the first half of 2024 were a dramatic 79.3% increase over the same period last year and buoyed by securities trading, underwriting, and selling. Annual profits are currently on track to close out the year much stronger than 2023, according to New York State Comptroller Thomas P. DiNapoli’s annual report examining the performance of New York City’s securities industry.

“After record years during the pandemic, Wall Street’s profits were more in line with pre-pandemic levels in 2022 and 2023,” DiNapoli said. “This year has been very strong so far and profits may continue their upward trajectory, to exceed 2023 levels and boost state and city tax revenues. Still, there are many international and domestic uncertainties that pose risks to the industry in the final months of 2024 that my office will be monitoring closely.”

Securities industry performance is traditionally measured by the pretax profits of the broker/dealer operations of New York Stock Exchange (NYSE) member firms. There are now 131 member firms, down from more than 200 in 2007 before the global financial crisis.

Profits 

Driven by federal stimulus and low interest rates, annual profits for the city’s securities industry soared to record highs during the pandemic — $50.9 billion in 2020 and $58.4 billion in 2021 — before returning to more typical levels in 2022 ($25.8 billion) and 2023 ($26.3 billion). These totals were slightly higher than the $22.3 billion pre-pandemic average from 2015-2019. In 2023, firms’ profits were spurred by interest income on transactions, due to federal fund rate increases. The gains were offset, however, by increased expenses, also due to higher interest rates. 

For the first half of 2024, most revenue lines were up over 2023’s first half, including supervisory fees (up $5.6 billion), securities trading (up $5.2 billion), and underwriting (up $4.2 billion). Expenses were up as well due to higher compensation (up $4.5 billion) and other costs, but revenue overshadowed those increases for net growth of 17.4% and first half profits of $23.2 billion. If the current pace of growth is maintained, Wall Street’s profits could reach $47.1 billion by the end of 2024, DiNapoli’s report estimates. 

Employment, Bonuses and Salaries 

There were 214,900 jobs in the securities industry across New York state in 2023, up 15,600 positions from the 2019 pre-pandemic total. New York City is home to 198,500 (89%) of the securities jobs in the state, the most since 2000. 

In recent years, employment has lagged changes in profits, with jobs actually declining 1.7% over the industry’s period of soaring profits from 2019 to 2021. The lion’s share of the job growth since 2019 came in 2022 when firms added 11,300 positions (6.3%).

New York continues to be the nation’s financial capital with more than twice as many securities industry jobs as its closest competitor California (102,100) in 2023. However, it has been losing jobs to other states for decades. New York was home to one-third of the nation’s industry employees in 1990, but in 2024 it only accounts for 17.4%. 

Although industry employment in New York grew by 7.8% from 2019 through 2023, it has grown faster elsewhere in places like Texas (26.6% increase, 19,400 jobs added). Utah had the highest growth rate of any state at 40.5% (3,000 jobs added).

The average salary for employees of New York City’s securities industry was $471,370 in 2023, the third highest on record, but down 5.2% from 2022 and down 8.7% when adjusted for inflation. Salary declines were largely due to smaller bonuses ($176,500 on average) as profits settled down from their pandemic highs. This is the highest average salary of any sector in the city and nearly five times higher than the average salary ($98,700) paid in the rest of the private sector.

Industry firms increased their compensation costs by 9.8% in the first half of 2024 and it is likely that the overall bonus pool, which made up 37% of industry wages last year, will increase as well. DiNapoli will release his 2024 average bonus estimate in March 2025.

State and City Tax Revenue

The state depends more heavily on Wall Street for tax revenue than the city because it relies more on personal income tax and does not have a general real property tax. In State Fiscal Year 2023-24, the securities industry contributed $19.4 billion to the state budget, or 19% of total tax collections. Most of this (84%) was from personal income taxes.

The city received $5.1 billion in city fiscal year 2024, 70% from personal income taxes, which accounted for 22.8% of the city’s total personal income tax collections. The industry comprised 7% of the city’s total tax collections. The city budget assumes tax collection growth and a 7.4% increase in the industry bonus pool. If stronger than anticipated profits hold up, tax revenue collected by the city and state in the current fiscal year may be higher than current projections.

Economic Contributions

DiNapoli’s report estimates that in 2022, 1-in-11 city jobs (9%) were associated with the securities industry, a decline from the 1-in-9 ratio in 2019, but in line with recent years. This may reflect a decline in activity at restaurants, dry cleaners, and other businesses due to remote work. Still, financial services firms continue to have one of the highest return-to-office rates among all industry sectors in the city.

In 2022 (the most recent county level data available), DiNapoli’s report estimates the industry contributed 18.6% of the city’s gross product. The industry accounted for 6.1% of the state’s gross product in 2023.

Workforce

In 2022, 69% of Wall Street employees lived in the city. More than half (53%) were non-Hispanic White, 24% were non-Hispanic Asian, 11% were Hispanic, and 7% were non-Hispanic Black or African American. The industry is more diverse than in 2012, when 64% of employees were non-Hispanic White. Immigrants (predominantly from Asia and Europe) comprised 37% of employees, compared to 42% of city total employment. Men comprised two-thirds of the industry’s workforce, a statistic that is relatively unchanged over the past decade.  

Report

The Securities Industry in New York City

Related Work

NYC Securities Sector Dashboards 2023 Estimated Average Bonus (March 2024)

The Securities Industry in NYC (Oct. 2023)

Office Real Estate in NYC: A Review of Market Valuation Shifts (Aug. 2024)

MAYOR ADAMS, SPEAKER ADAMS ANNOUNCE NEW ENFORCEMENT POWERS TO PREVENT SALE OF DANGEROUS, UNCERTIFIED LITHIUM-ION BATTERIES AND BATTERY-POWERED MICROMOBILITY DEVICES

 

Strengthened Regulations Now Allow City to Shut Down Repeat Violators Who Prioritize Profits Over Public Safety

Officials Remind New Yorkers to Only Purchase Certified Batteries and Devices

New York City Mayor Eric Adams, New York City Council Speaker Adrienne Adams, New York City Department of Consumer and Worker Protection (DCWP) Commissioner Vilda Vera Mayuga, and the Fire Department of the City of New York (FDNY) Commissioner Robert S. Tucker today announced expanded regulations to protect New Yorkers from the dangers of uncertified lithium-ion batteries. Through Local Laws 49 and 50 of 2024 — sponsored by New York City Councilmember Gale Brewer — that recently took effect, the city now has the authority to padlock — or close — any brick-and-mortar retailer that repeatedly violates the city’s regulations on the sale of uncertified batteries and battery-powered micromobility devices. Local Law 39, which originally took effect in September 2023, mandates that all battery-powered micromobility devices — including electric bicycles, electric scooters, and the batteries those devices use — must be certified to accredited lab safety standards as set forth by local law to be sold or rented in New York City.

“The data is clear: Unsafe, uncertified batteries pose a real threat to New Yorkers and their property, and this administration will continue to do everything that it can to enforce the law to keep residents safe,” said Mayor Adams. “We know that e-micromobility is a critical tool that many New Yorkers use for work and pleasure. But the fact of the matter is that the fires and deaths caused by these devices are preventable and we need everyone to play their part in ensuring their safety, and the safety of their families, their neighbors, and our first responders. We thank our partners in government for collaborating on this important public safety issue as we work to keep micromobility devices safe for everyone.”

“Lithium-ion batteries pose significant fire risks, and have caused deadly fires across our city, making it critical that we do our part in mitigating preventable death and injury,” said Speaker Adams. “As battery-powered devices such as e-bikes become a mainstay in New York City, especially relied on by delivery workers, the New York City Council continues to work with the administration to ensure those who use these micromobility devices can do so safely and responsibly. The New York City Council has passed multiple laws regulating the licensing and sales of lithium-ion batteries, delivering safety to our neighborhood. I thank our partners in government for their work to enact these laws because we must work together to promote the safety of all New Yorkers.”

“We are committed to protecting consumers and building a culture of compliance among our local businesses, but we need retailers to understand that this is an urgent safety issue, and we will not hesitate to use all of the tools in our toolbox to protect our neighbors,” said DCWP Commissioner Vera Mayuga. “Thank you to our partners at FDNY for their continued collaboration and for their advocacy at the federal level for a national fix to ensure these unsafe devices can’t enter our city.”

“Recklessly, repeatedly selling uncertified lithium-ion batteries is criminal, and a critical threat to public safety,” said FDNY Commissioner Tucker. “We thank the mayor and our partners at DCWP for their leadership on this issue. We will continue to use all means possible to seek out the bad actors and ensure the safety of New Yorkers against the threat of these uncertified batteries.”

“The dangers associated with poorly manufactured lithium-ion batteries are clear, which is why the city must consider all enforcement options to protect our fellow New Yorkers,” said New York City Department of Buildings Commissioner James Oddo. “This administration has been making significant progress advancing building and fire safety in the five boroughs, from setting up a new proactive inspection program for structurally unsafe buildings to taking real action to get dangerous uncertified e-bike batteries out of our homes. This latest announcement sends a message that we aren't going to allow unscrupulous business owners to continue endangering residents, their neighbors, or our first responders.”

In January 2024, the Adams administration testified before the New York City Council Committee on Consumer and Worker Protection in support of legislation to strengthen and expand enforcement capabilities outlined in Local Law 39 of 2023. Local Laws 49 and 50 are a result of the ongoing collaborative efforts to curb lithium-ion battery fires between the Council and the administration, and give the FDNY concurrent authority to also enforce the certification law. In addition to the authority to close repeat violators, the maximum penalty for violating the certification requirements will increase to as much as $2,000 per device type. The new laws also require retailers — including those online — to publicly display the city’s new fire safety disclosure sign to help consumers understand certification and how to safely store and charge battery-powered micromobility devices. The safety disclosure sign, which is available in multiple languages, will also be distributed to educate consumers. The law additionally mandates that online retailers must post certification information on the product page.

DCWP and FDNY have partnered to conduct joint inspections to ensure compliance with the law and make sure that batteries and devices are being safely charged. FDNY’s E-Safety Task Force — which has inspected businesses to ensure safe charging since 2022 — has conducted 983 inspections, issued 782 summonses, including 77 criminal summonses, 367 violation orders, and 20 vacate orders with the DOB.

Since Local Law 39 of 2023 went into effect on September 16, 2023, DCWP has conducted more than 650 inspections and issued more than 275 violations to local brick-and-mortar retailers, both independently and in conjunction with FDNY’s E-Safety Task Force and issued 40 cease-and-desist letters and more than 25 violations to online retailers.

The city urges New Yorkers to only purchase certified battery-powered mobility devices and batteries. Businesses that sell batteries or battery-powered micromobility devices must ensure they are certified and display the certification, logo, or name of the testing laboratory on the device, packaging, or documentation that will be provided to consumers at the time of sale. Those who own micromobility devices should charge and store them outside where possible. Visit FDNY’s Safety Tips for a full list of fire safety tips related to lithium-ion batteries.

Under Local Law 39, all devices and batteries must be certified by an accredited testing laboratory in compliance with Underwriter’s Laboratory (UL) standards if they are being sold, leased second-hand, or rented:

• Electric bicycles must be certified in compliance with UL standard 2849.
• Other battery-powered mobility devices, like electric scooters, must be certified in compliance with UL standard 2272.
• Batteries must be certified in compliance with UL standard 2271.

Since last September, DCWP has conducted multiple rounds of outreach to disseminate educational information about the local laws to more than 500 local brick-and-mortar and online retailers. DCWP provides retailers with a checklist of legal requirements in order to help them avoid violations and comply with the law. DCWP also offers a list of Accredited Testing Laboratories with their logos to help retailers and consumers identify certified devices.

This effort is a component of the Adams administration’s “Charge Safe, Ride Safe: New York City’s Electric Micromobility Action Plan” that encourages safe use of micromobility through innovative pilot programs and the use of new technologies to improve safety, expanded education and outreach, and updated infrastructure and policies like new bike lane designs and public charging options.

DEC and Partners to Host 5,000 Student Scientists at 22nd Annual "Day in the Life of the Hudson and Harbor"

 

Scientific Data Collection Events on Thursday, Oct. 10, Connect Students with River and New York Harbor

New York State Department of Environmental Conservation (DEC) Interim Commissioner Sean Mahar today announced that on Thursday, Oct. 10, shorefronts along the Hudson River Estuary and the piers of New York Harbor will be busy with activity during the 22^nd annual celebration of A Day in the Life of the Hudson and Harbor. Thousands of students equipped with seine nets, minnow pots, and water testing gear will collect data on the Hudson River's fish and invertebrates, track the river's tides and currents, and examine water chemistry and quality.

 

“DEC's annual 'A Day in the Life' event is an excellent opportunity for student scientists from the Troy Dam to the Battery to experience the Hudson River’s diverse habitats and fish species and contribute to DEC’s water sampling efforts,” said Interim Commissioner Mahar. “This annual event gives New York students of all ages and backgrounds the chance to explore and learn about the Hudson River Estuary environment up close and helps encourage the next generation of environmental stewards.”

 

This year, Day in the Life has expanded to sites along the Mohawk River, the Hudson’s largest tributary, and the headwaters of the Upper Hudson River where freshwater feeds into the tidal estuary. On the Mohawk, 24 enthusiastic teachers and partners are connecting students to their local rivers using hands-on data collection and exploration tailored to non-tidal waters.

 

At more than 100 waterfront sites up and down the Hudson River, students from elementary school through college partner with DEC and environmental education centers to collect scientific data using hands-on field techniques to capture a snapshot of the river's ecology. The data collected by students provides insights into the river's ecosystem and is posted online after the event. This year, more than 5,000 students and educators from over 90 schools will participate.

 

Day in the Life provides students the opportunity to don waders or use a fishing rod to collect data on many of the Hudson's 200-plus species of fish. Most are young fish, evidence of the Hudson's importance as a nursery habitat. Sometimes students catch surprising fish like seahorses, conger eels, and needle fish. Students also examine the physical and chemical aspects of the river with a wide range of equipment from dissolved oxygen and pH kits to high-tech refractometers and plastic hydrometers to measure salinity and find the salt front—the leading edge of dilute seawater pushing up the estuary.

 

DEC Hudson River Estuary Program staff connect the field day with the classroom by conducting pre- and post-visits at numerous schools that participate in A Day in the Life. Lessons on-site and in the classroom fulfill State learning standards in a variety of subjects. Post-trip activities connect students to other sites through collected data, helping them better understand the dynamic factors constantly impacting the Hudson River ecosystem.

 

Day in the Life is sponsored by DEC's Hudson River Estuary Program in partnership with the Hudson River National Estuarine Research Reserve and the Columbia Climate School Lamont-Doherty Earth Observatory.

 

To schedule a media visit to a site, please contact the DEC Press Office at 518-402-8000 or pressoffice@dec.ny.gov. A list of seven of the participating schools, partners, and event locations follows:

• Albany County: Hudson Shores Park, 2 Selke Dr., Watervliet, NY 12189: North Colonie Elementary Enrichment Program, North Colonie Central School, 9:30 a.m. - 1:30 p.m.
  

• Albany County: Corning Preserve Boat Launch: Colonie and Water Street Albany, NY 12207: Albany High School, 9:30 a.m. - 1:00 p.m.
  

• Dutchess County: Norrie Point Environmental Education Center, Margaret Norrie State Park, Staatsburg, NY 12580: Franklin D. Roosevelt High School, Hyde Park Central School: 9:30 a.m. – 1:30 p.m. (DEC, Hudson River National Estuarine Research Reserve)
  

• Dutchess County: Mid-Hudson Discovery Museum Pavilion, 75 North Water St., Poughkeepsie, NY 12601: Haviland Middle School, Hyde Park Central School District. 9:00 a.m. – 2:00 p.m. (DEC, I FISH NY, Hudson River Estuary Program)
  
  
• New York County: Swindler Cove Park, Harlem River Drive & Dyckman Street at 10th Ave., New York, NY: M103 Dos Puentes Elementary School: 9:30 a.m. – 1:00 p.m. (DEC, Hudson River Estuary Program)
  

• Ulster County: Bob Shepard Highland Landing Park,42 River Road Highland, NY 12528 : Wallkill Senior High School, Wallkill Central School District School, 8:30 a.m. - 12:00 p.m. (DEC, Hudson River Estuary Program)
  
  
• Westchester County:Piermont Pier, Ferry Rd., Piermont, NY 10968: Clarkstown High School North, Clarkson South High School, Tappan Zee High School, Spring Valley High School, and Pearl River High School. 8:00 a.m. – 2:00 p.m. (Columbia Climate School Lamont-Doherty Earth Observatory)

Housing Lottery Launches for 114 East 198th Street in Fordham, The Bronx

 

The affordable housing lottery has launched for 114 East 198th Street, a five-story residential building in Fordham, The Bronx. Designed by Baobab Architects and developed by Joel Mandel under the 114 East 198 BSD, LLC, the structure yields 20 residences. Available on NYC Housing Connect are 20 units for residents at 130 percent of the area median income (AMI), ranging in eligible income from $105,223 to $181,740.

Amenities include an elevator and a shared laundry room. Units come equipped with air conditioning, intercoms, and name-brand kitchen appliances, countertops, and finishes. Tenants are responsible for electricity.

At 130 percent of the AMI, there are 17 studios with a monthly rent of $3,069 for incomes ranging from $105,223 to $161,590, and three one-bedrooms with a monthly rent of $3,253 for incomes ranging from $111,532 to $181,740.

Prospective renters must meet income and household size requirements to apply for these apartments. Applications must be postmarked or submitted online no later than December 10, 2024.

NYC PUBLIC ADVOCATE’S STATEMENT ON REPORTED ‘DEADLOCKING’ OF MENTALLY ILL NEW YORKERS ON RIKERS

 

"The alleged ‘deadlocking’ of mentally ill individuals on Rikers Island, if true, is inhumane and indefensible. Rikers has been called the largest mental health facility in the country, but at least at mental health facilities, treatment is provided to people who are suffering. Not only is the city failing to provide mental health support on Rikers, these and other alleged DOC practices are actively harming the mental health of vulnerable incarcerated New Yorkers. This violates not only the Board of Correction minimum standards, but the minimum morals to which we should hold our city.  

"These reports are disturbing, alarming, but not surprising from an administration that has actively refused to even attempt to implement the law banning the prolonged isolation of solitary confinement in city jails. Combined with these latest allegations, it appears the administration believes isolation is an acceptable tool, despite the irreversible damage it causes and irrefutable data showing that harm. No matter what name it goes by– “deadlocking,” shower cages, or emergency lock-ins, we are left with the same results.

"If there is an explanation for these reported practices and incidents, a plan to correct them, then the city needs to be clear about its inability to provide adequate care and commit to its moral and legal mandates. They cannot simply hope Rikers stays out of sight, out of mind, and out of the headlines. "

Bronx Borough President Vanessa L. Gibson - Community Resources & Updates

 

Dear Neighbor,

 

Thank you for joining us for another week in review.

We just announced a joint $6 million capital allocation with Speaker Carl Heastie and Assembly Member Amanda Septimo to combat the opioid epidemic in our borough. This $6 million investment will support the opening of an Opioid Recovery and Bridge Clinic at Lincoln Hospital. Programs housed in the Lincoln Opioid Recovery and Bridge Clinic will allow for screening, brief intervention, and referral to treatment, along with clinical offices, exam rooms, and multi-purpose space for group therapy.

 

By working with our community leaders and health organizations, we can build a support network, increase public awareness, and save lives. We cannot stand by as our loved ones suffer; we must confront this epidemic with urgency and compassion.

 

I want to thank Speaker Carl Heastie; Assembly Member Amanda Septimo; Chief Executive Officer, NYC Health + Hospitals/Lincoln, Cristina Contreras; NYC Health + Hospitals President and CEO, Mitchell Katz, MD., and everyone else who has played a vital role in supporting the completion of this project. Together, we will ensure our residents receive the care they need and deserve to combat this crisis in our community. 

 

If you have any questions or concerns, please do not hesitate to contact our office at 718-590-3500 or email us at webmail@bronxbp.nyc.gov.

In partnership,

Bronx Borough President Vanessa L. Gibson

IN THE COMMUNITY

We celebrated 30 years of cycling in our borough!

Congratulations to the riders who came out to ride with us in the Bronx.

A special thank you to all of our performers, emcees, sponsors, and volunteers who helped to make this event a huge success.

We look forward to making Tour de Bronx even bigger next year!

Last week, we joined the Female Fight Club’s press conference and presentation in recognition of Domestic Violence Awareness Month.

A special thanks to My Sisters’ Place for their collaboration and commitment to supporting survivors.

Together, we are raising awareness, fighting for safety, and empowering our communities to end domestic violence.

The Hispanic Heritage celebration at Borough Hall was an evening filled with culture, music, and community.

A heartfelt thank you to our incredible honorees for their contributions, and to our generous sponsors, Essen Health, Ponce Bank, Havana Cafe, and Live On NY.

Special thanks to JJ Band for the amazing live performance that made the night unforgettable!

In partnership with GrowNYC and the NYC Department for the Aging, we distributed Health Bucks at Farmers Markets in Morris Heights, Parkchester, and near Lincoln Hospital to support efforts to combat hunger and improve nutrition.

Together, we’re promoting wellness and nutrition across the borough!

UPCOMING EVENTS

COMMUNITY EVENTS

GENERAL INFORMATION

Dual U.S. and Iranian Citizen Arrested for Unlawful Scheme to Violate and Evade U.S. Sanctions Against Iran

 

Kambiz Eghbali, also known as Cameron Eghbali, 50, of Los Angeles, was arrested yesterday pursuant to a now-unsealed indictment charging him, along with Hamid Hajipour and Babak Bahizad, both Iranian nationals, with violations of the International Emergency Economic Powers Act, conspiracy to commit bank fraud, and conspiracy to commit money laundering. Bahizad and Hajipour remain at large.

According to the indictment, from March 2014 through September 2019, Eghbali and others conspired to unlawfully send digital and physical gift cards loaded with U.S. dollars to Iran. Eghbali would list his company, a U.S.-based purported videogame wholesaler and distributor located in the Central District of California, as the seller of the gift cards, and would provide cards to Bahizad for the benefit of his Iran-based gaming company, and to Hajipour for the benefit of his mobile software application service company. Bahizad and Hajipour would then pay Eghbali for the cards by transferring money from Iran to Eghabli’s U.S.-based bank accounts using third parties in other countries to conceal the transfer from U.S. regulators.

The International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR) impose controls and restrictions on transactions involving Iran based on the threats posed by Iran to the national security of the United States including, among others, its pursuit of nuclear weapons and sponsorship of terrorism. The IEEPA and ITSR, among other things, prohibit the export, reexport, sale, or supply, directly or indirectly, from the United States or by a United States person, wherever located, of any goods, technology, or services, including financial services, to Iran or the Government of Iran without first obtaining authorization from the U.S. Treasury Department’s Office of Foreign Assets Control.

If convicted, the defendants face the following maximum penalties: 20 years in prison for violations of IEEPA, 30 years in prison for bank fraud violations, and 20 years in prison for money laundering violations. The indictment also notifies defendants that the United States intends to forfeit all property alleged to be traceable to proceeds of the offense. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Martin E. Estrada for the Central District of California, and Executive Assistant Director Robert Wells of the FBI’s National Security Branch made the announcement.

The FBI is investigating the case, with support from Homeland Security Investigations.

Assistant U.S. Attorneys Anna Boylan and Mark Takla for the Central District of California and Trial Attorneys David J. Ryan and Leslie Esbrook of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

CONSUMER ALERT: NYDOS Division of Consumer Protection Warns Student Loan Borrowers to Avoid Scams and Negative Credit Reporting Consequences

 

As the Federal Student Loan Grace Period Has Ended, Student Loan Borrowers Should Check the Status of Their Loans to Avoid Negative Credit Impacts

Student Loan Borrowers are Reminded to Only Use Trusted Government Websites and Beware of Fake Offers from Scammers Impersonating the U.S. Department of Education

Secretary Mosley: “With big changes happening to the federal student loan repayment process, it’s important for borrowers to understand which sources they can trust for information and assistance so they don’t fall victim to a scam or end up with negative impacts to their credit score.”

As the federal student loan grace period has now ended, the New York Department of State’s Division of Consumer Protection is warning student loan borrowers to avoid scams and negative financial and credit reporting consequences while navigating the loan repayment process. Any late or missed federal student loan payments can now be reported to the credit bureaus, which can lead to severe negative consequences for borrowers who are unable to make payments. Federal student loan borrowers having difficulty making payments will need to take important steps to avoid these negative financial or credit reporting consequences. Borrowers should also be aware of potential scammers who may take advantage of consumers who are seeking assistance with repayment.

“With big changes happening to the federal student loan repayment process, it’s important for borrowers to understand which sources they can trust for information and assistance so they don’t fall victim to a scam or end up with negative impacts to their credit score,” said Secretary of State Walter T. Mosley. “I encourage all student loan borrowers to take the time to check the current status of their loans now that the grace period has ended. And if any borrowers find they can’t afford payments, they should work directly with their loan servicer to help prevent significant financial and credit reporting consequences.”

Federal student loan payments resumed in October 2023 after a three and a half year-long pause caused by the COVID-19 pandemic. Since then, federal student loan borrowers benefited from a temporary twelve-month grace period protecting them from being reported to credit bureaus as delinquent for missed payments. Starting on October 1, 2024, any late or missed federal student loan payments can be reported to the credit bureaus. This can have significant financial and credit reporting consequences, including:

• Missed or late payments can adversely affect your credit score. This negative information stays on your credit report for seven years.
• A drop on your credit score can make it harder for you to get approved for credit cards, home or car loans, housing and other important needs that require credit checks.
• Continued missed payments can put your loan into default, which comes with more negative consequences including withholding of federal tax refund, garnishment of wages or loss of eligibility to receive deferment, forbearance or additional federal student aid.

HERE’S HOW TO PROTECT YOURSELF:

Understand the Repayment Process:

• Stay updated with trusted information and sources: The U.S. Department of Education’s webpage provides borrowers with the most accurate and up-to-date information about federal student loans. They also recommend logging in to your StudentAid.gov account to ensure your contact information is up to date and to sign up for alerts for when new information becomes available.
• Review the details of your loan: Make sure you know who your loan servicer is and how to contact them. Check that your servicer has your correct contact information so you can stay up to date with communications. Review the details of your loan to make sure you understand your monthly payment amount, due dates and other details specific to your loan.
• Don’t forget to regularly monitor your credit report and score: As you begin the repayment process, stay one step ahead and make it a routine to check on your credit report and look for inconsistencies. Visit annualcreditreport.com or call 1-877-322-8228 to get your free reports.
• Looking for help navigating your student loans? EDCAP (Education Debt Consumer Assistance Program) is an independent, New York State funded, nonprofit program of the Community Service Society of New York that helps New Yorkers navigate the student loan system. They offer free, one-on-one counseling with their student loan experts. Visit the website at edcapny.org, call (888) 614-5004 or email at edcap@cssny.org for more information.
• What if I can’t afford my payment? If you are having trouble making your monthly payment, contact your loan servicer immediately to discuss your options. Visit StudentAid.gov for more information on your options if you are having difficulty making payments.

Beware of Fake Communications from Scammers:

• Don't trust any person or program that promises you special access or guaranteed eligibility for loan forgiveness: You might be contacted by a scammer saying they will help you get your loan cancelled or reduced for a fee. You will never need to pay for advice or help with your federal student loans or any deferment or income-based plans. All federal student loan borrowers can stay updated at no cost by contacting the U.S. Department of Education directly at StudentAid.gov. If you’re contacted unexpectedly with any of these offers, it's a scam. 
• Be wary of scammers that make false claims about your account or your loan forgiveness or say you have an incomplete application: If you have any questions about your loan or loan forgiveness, go directly to StudentAid.gov and your loan servicer’s website to access your account and confirm any details.
• Protect yourself from phishing scams: If you didn’t initiate the communication, don’t share your personal information. Keep your personal information, including your Federal Student Aid ID and social security, number private. The U.S. Department of Education will never call or text you with a request of confidential information. Make sure you work only with the U.S. Department of Education and never reveal your personal information or account password to anyone. Genuine emails to borrowers will only come from noreply@studentaid.gov; noreply@debtrelief.studentaid.gov and ed.gov@public.govdelivery.com.  
• If you encounter a scam, report it: Contact the official Federal Student Aid website to file a complaint, or contact the Federal Trade Commission. The U.S. Department of Education offers additional tips and resources here. You can also contact your loan servicing company or the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243. 

 

About the New York State Division of Consumer Protection

Follow the New York Department of State on Facebook, X and Instagram and check in every Tuesday for more practical tips that educate and empower New York consumers on a variety of topics. Sign up to receive consumer alerts directly to your email or phone here.

The New York State Division of Consumer Protection provides voluntary mediation between a consumer and a business when a consumer has been unsuccessful at reaching a resolution on their own. The Consumer Assistance Helpline 1-800-697-1220 is available Monday to Friday from 8:30am to 4:30pm, excluding State Holidays, and consumer complaints can be filed at any time at www.dos.ny.gov/consumerprotection. The Division can also be reached via X at @NYSConsumer or Facebook.