(TRENTON) – Legislation Assembly Democrats Annette Quijano, Pamela Lampitt, Celeste Riley and Valerie Vainieri Huttle sponsored to require educational brochures on college loan repayment schedules to be created and distributed to high school students has been signed into law today.
“Many college-bound students and their families fail to realize how burdensome student loan debt can truly be until they receive their first repayment book after graduation, which often has monthly payments in the hundreds or even thousands of dollars,” said Quijano (D-Union). “Educating students on the ins and outs of the borrowing process before they sign loan documents can help students graduate without being mired in debt.”
“With a concerning trend of growing student debt loans, it is critical that students receive information on how to manage their student loans intelligently and effectively,” said Lampitt (D-Camden/Burlington). “I am hopeful this new law will educate students on how they can protect themselves financially while seeking a top-notch education.”
“With New Jersey families pinching every penny possible nowadays, having as much information as possible when making financial decisions is critical,” said Riley (D-Cumberland/Gloucester/Salem), Chairwoman of the Assembly Higher Education Committee. “This document can provide parents and students with the ability to assess the real, long-term costs of a college education.”
“While a college education is priceless in terms of opportunities and experiences, it is also extremely expensive in terms of financial resources. The cost of higher education has dramatically and disproportionately increased in recent years,” said Vainieri-Huttle (D-Bergen). “Students and their families must be aware of the financial realities of college so they can make smart, informed decisions about what schools they choose to attend and how they finance their education.”
The law would direct the state Higher Education Student Assistance Authority (HESAA) to create a document that will serve to educate high school students about college loan repayment schedules. The HESAA is now required to post the document on its website and distribute it annually to public and nonpublic high schools. School districts and nonpublic high schools would be required to disseminate the document to high school juniors and seniors annually.
The sponsors said the law was especially necessary and timely after an annual report issued in June 2011 by the U.S. Department of Education listed several New Jersey public colleges as among the most expensive in the nation.
The document will include examples of monthly and annual loan payments required for various types of student loans, based on differing principal loan amounts and current interest rates, the time period it would take to fully repay those loans based on various monthly or annual payment installments, definitions of fixed rate loans, variable rate loans, and consolidation loans, and the consequences of defaulting on a student loan.