Legislation sponsored by Assembly Speaker Sheila Y. Oliver, Assembly Budget Chairman Lou Greenwald and Assemblywomen Joan Voss, Mila M. Jasey and Connie Wagner to create a loan forgiveness program for students who pursue fields with labor shortages was advanced Wednesday by an Assembly committee.
The bill (A-3513), approved by a vote of 8-1-3, is part of the Democratic legislative “Back to Work NJ” effort to create jobs and spark economic development.
“We’re targeting job creation for all New Jerseyans, but we also have to remember that this economy is also very tough for our young residents,” said Oliver (D-Essex/Passaic). “With a plan like this, we tackle two concerns – finding work for our young residents and giving them an incentive to target their outstanding talents to areas of need. It’s a win-win for everyone.”
“Our goal is to create a self-sustaining loan forgiveness program that would keep pace with the needs of society,” said Greenwald (D-Camden). “Even in the best economies it can be difficult for young people to find work, so making this an ongoing effort to create jobs and boost economic growth is a smart approach. It targets two key needs – much-needed jobs for young New Jerseyans and combating labor shortages.”
“We need a continuing emphasis on finding work for young people and taking on labor shortages in key areas,” said Voss (D-Bergen). “This is a comprehensive approach that will ensure both goals remain an emphasis as we work to continue improving our economy by filling vacancies in key professions.”
“Our effort to improve the economy must include everyone, including young people struggling to find work and make ends meet,” said Jasey (D-Essex). “This initiative offers so much potential because it aims to solve not only that problem, but the ongoing concern we often have with labor shortages in key areas.”
“Encouraging our young residents to seek work where it’s needed most is a win-win for everyone,” said Wagner (D-Bergen). “We improve our economy, create jobs and ensure workers are filling key needs for New Jersey residents.”
The bill would establish the Workforce Shortage Loan Redemption Program within the Higher Education Student Assistance Authority. It would provide for the redemption of a portion of the eligible qualifying loan expenses of program participants for each year of service in a field in which a shortage of qualified labor exists in the state.
To be eligible to participate in the program an applicant must be:
· A resident of the state;
· A graduate of an associate’s, baccalaureate or advanced degree program from an in-state institution of higher education in an academic discipline appropriately related to a field in which there is a shortage of qualified labor; and
· Agree to perform the required service obligation.
The bill would establish a 13-member Workforce Shortage Loan Redemption Council.
The council would consist of: the Executive Director of the Economic Development Authority, the Commissioner of Labor and Workforce Development, the Executive Director of the Commission on Higher Education, and the chairperson of the State Employment and Training Commission, or their designees.
The council will also include 9 public members, three each appointed by the Governor, the President of the Senate, and the Speaker of the General Assembly. The public members will represent persons from the business community, the labor community, and the higher education community.
The council, every five years, would identify no more than three fields in which there is a shortage of qualified labor in the state and recommend to the governor that these fields be included in the Workforce Shortage Loan Redemption Program.
Under the provisions of the bill the governor would review the council’s recommendations and forward to the Legislature his recommendations on which fields to include in the program. If the Legislature does not disapprove the governor’s recommendations by concurrent resolution within 60 days, then the governor’s recommendations would be deemed approved, and persons who have graduated with a degree in an academic discipline appropriately related to one of the designated fields would be eligible to participate in the loan redemption program.
A student who is eligible and interested in participating in the loan redemption program would sign a contract with the authority upon the completion of the final year of studies. The agreement would specify the applicant’s dates of required service and the total amount of eligible qualifying loan expenses to be redeemed by the state in return for that service.
Maximum redemption of loans under the loan redemption program would amount to 18 percent of principal and interest of eligible qualifying loan expenses in return for one full year of service in a field in which there is a shortage of qualified labor in the State, an additional 18 percent for a second full year of service, an additional 19 percent for a third full year of service, and an additional 20 percent for a fourth full year of service.
A program participant would be able to redeem loans up to a maximum of 75 percent of eligible qualifying loan expenses.
The bill was released by the Assembly Budget Committee.