Prospective Students Would Be Given Details on Costs, Loans Offered and Debt Repayment
An Assembly panel on Thursday approved legislation sponsored by Assembly Democrats Joseph Cryan, Annette Quijano, Craig Coughlin and Joseph Lagana to better inform prospective students about college financing by creating a financial “shopping sheet.”
The sponsors stated that the intent of the legislation is to provide students and their families with clear information on the costs, loan options, and estimated debt that will allow them to easily compare financial aid packages from different schools.
“Let’s think of this as a ‘truth in lending’ disclosure for college financing,” said Cryan (D-Union). “The shopping sheet would provide information that will help students shop for the opportunity that works best for their education needs and budget. New Jersey families considering college deserve to know how much and how long they will be paying for it.”
The bill (A-668) would require four-year public and independent institutions of higher education to provide a financial aid shopping sheet to each prospective student as part of the school’s financial aid offer. Under the bill’s provisions, the state Secretary of Higher Education would provide a model format for the shopping sheet to be used by the institutions.
“Higher education is the first of a few major financial decisions a person will have to make in their lifetime,” said Quijano (D-Union). “Families should have at their fingertips the information they need to make the right decision for them. Hopefully, it will help prevent many graduates from carrying the heavy burden of unpaid college debt.”
“The shopping sheet would include valuable information on costs and anticipated debt that a student can expect to incur while attending a particular school,” said Coughlin (D-Middlesex). “In addition, the sheet must include information on the school’s graduation rate, student retention rate and student loan default rate, all important indicators of a student’s long-term outcome.”
“Honest details on loan amounts, repayment schedules and other financing options will give students an idea of their potential long-term liability and how to avoid debt pitfalls,” said Lagana (D-Bergen/Passaic). “This legislation will empower families and students with the information needed to make the best decision for their future.”
The model shopping sheet prescribed by the Secretary of Higher Education shall include, at a minimum, the following information:
1) the total cost for one year of attendance at the institution, including tuition, student fees, room and board, books and materials, and transportation and other educational costs;
2) the total amount per year of grants and scholarships awarded to that student, including any grants and scholarships from the institution, federal grants, state grants, including state tuition aid grants, or other scholarships;
3) the total net amount the student will owe for one year of attendance at the institution, after taking into account any grants and scholarships;
4) the total amount per year of student loans and work study funds that the student is eligible for, broken down by federal Perkins loans, federal Direct Subsidized loans, federal Direct Unsubsidized loans, New Jersey College Loans to Assist State Students (NJCLASS) loans, and federal, state, or institutional work study funds;
5) the total estimated amount the student will owe in student loan debt after graduating from the institution, broken down by federal loan debt and NJCLASS loan debt;
6) the total estimated monthly payment the student will owe on his student loans after graduation, broken down by monthly payment owed for federal loans and monthly payment owed for NJCLASS loans;
7) the percentage of students from the institution who defaulted on their student loans; and
8) the percentage of students at the institution who graduate within four years and within six years, as compared to the average rates at other four-year public or independent institutions of higher education.
The measure was approved by the Assembly Higher Education Committee.