Assembly Majority Leader Louis Greenwald introduced legislation Thursday to refinance student loans, making it financially easier for former students to stay in New Jersey by allowing county improvement authorities to establish programs to refinance student loan debt owed by county residents.
“Student loan debt has crippled an entire generation, making it nearly impossible to start a family, buy a home, or open a business,” said Greenwald (D-Camden/Burlington). “Creating an incentive for young people to settle down by offering debt relief brings new energy into our local communities and improves the quality of our workforce.”
The proposed legislation (A-4117) would allow counties to leverage their improvement authorities to refinance student loans for borrowers with high interest rates, easing their student loan burden. The authority would have to provide at least two different types of payment plans, and they would not be permitted to refinance loans if payments resulted in financial hardship for the borrower.
Earlier this year, legislation in Maryland to allow counties to refinance college loans for local borrowers was signed into law, allowing Montgomery County to be the first county in the state to create their own refinancing program.
Greenwald noted that the class of 2015 graduated as the most in-debt in history, with the average New Jersey student graduating with $32,700 in student loan debt alone, while the national average was $28,000. Greenwald also noted that millennials are leaving New Jersey at an extremely high rate, looking for more affordable places to live and work.
“Creating this program will increase our regional competitiveness and enable us to provide real financial incentives for graduates to live and work here,” said Greenwald. “Counties that create these programs will be investing in their own economic futures, helping us to keep these graduates here in New Jersey and providing student debt relief that these young adults desperately need to begin their futures.”