(TRENTON) – Legislation sponsored by Assembly Democrats Peter J. Barnes, III, Linda Stender, Upendra J. Chivukula and Celeste M. Riley that would forgive certain student loan debt in the event of the borrower’s death was advanced Thursday by the Assembly Higher Education Committee.
The New Jersey College Loans to Assist State Students Loan Program is a supplemental student loan program administered by the Higher Education Student Assistance Authority. The loans may be used by undergraduate and graduate students to pay for school-related expenses including tuition and fees, books, supplies, and room and board. Under the program, if a student borrower dies while the loan is still in repayment, the co-signer will assume responsibility for the debt’s repayment.
The bill (A-748) would allow the authority to clear the student borrower and any individual who cosigned the loan from having to repay the loan, in the event of the borrower’s death.
“Most student loans are co-signed by parents. Saddling a parent with repayment of a loan they helped get for a child they are now mourning seems unnecessary,” said Barnes (D-Middlesex). “Federal student loans are generally discharged in the event of the borrower’s death. This bill would put us in line with what the federal government is already doing.”
Under the bill, the executor or administrator of the borrower’s estate must provide written notification of the borrower’s death to the authority, as well as a certified copy of the death certificate within 120 days of the borrower’s death. The bill would take effect immediately.
“Existing law does not anticipate the rare circumstances of a young adult’s death,” said Stender (D-Middlesex/Somerset/Union). “The shock of losing your child should not be made worse by the burden of paying off college debt, which is why I am proud to be a co-sponsor on this bill.”
“The last thing a parent who just buried a child should be thinking about is when their child’s next student loan payment is due,” said Chivukula (D-Middlesex/Somerset). “This bill gives grieving parents one less financial hardship to worry about as they try to overcome their loss. I understand the responsibility of a co-signer, but surely death counts as an extenuating circumstance.”
“Parents who help finance the college education of their children understand the potential financial responsibility, but surely none can prepare to deal with having to inherit that debt due to a tragic loss,” said Riley (D-Cumberland/Gloucester/Salem), who chairs the Assembly Higher Education Committee. “If there is an instance when an exception should be made, this should be it.”
The death of a student borrower can have serious financial consequences for a family.
Rutgers University student Christopher Bryski of Marlton died in 2006 from a traumatic brain injury. His family had to make payments on his remaining $50,000 student loan from Key Bank, after Bryski’s father, who cosigned the loan, was required to pay it off. The remaining balance was forgiven this year following political pressure and an online petition calling on Key Bank to forgive the loan.
The bill will now go to the Assembly Appropriations Committee for further consideration.