(TRENTON) – Aiming to increase transparency between private education lenders and student borrowers, the Assembly Higher Education Committee on Monday advanced legislation to require lenders to register with the State and to establish certain protections for borrowers.
Under the bill (A-4395), creditors, lenders or student financing companies would be required to register with the New Jersey Commissioner of Banking and Insurance and with the Nationwide Multistate Licensing System and Registry. Lenders would provide the Commissioner with certain information about the entities and student loans they provide, which would then be posted to the Department of Banking and Insurance’s website, and lenders would post on their websites a copy of each model promissory note, agreement, contract or other instrument they use to substantiate a private education loan.
The measure would also require private education lenders to disclose certain information to borrowers, including information about cosigner releases and refinancing.
The bill is part of a legislative package put forth by Assemblyman Bill Moen (D-Camden, Gloucester) to address student loan concerns. It is also sponsored by Assemblywoman Mila Jasey (D-Essex, Morris).
The sponsors released the following joint statement:
“In many cases, college loans impact a student long after graduation. Unfortunately, some private education lenders make it difficult for students to manage their loans by restricting cosigner releases or unfairly accelerating loan repayments.
“Student borrowers will benefit from increased transparency from private education lenders, helping them to make the best financial decisions for themselves, their families and their futures.”