HESAA Vote to Approve Repayment Assistance Program Follows Lawmakers’ Call for Reform
Following the reform efforts of Assembly Democrats Gary S. Schaer and Mila Jasey, the Higher Education Student Assistance Authority on Wednesday voted to establish a program that will facilitate student loan repayment for New Jersey residents.
The resolution HESAA passed creates an income-driven repayment option for borrowers under the New Jersey College Loans to Assist State Students (NJCLASS) Loan Program. Beginning with borrowers who take out loans in the 2017-2018 academic year, individuals who cannot make the minimum payment on a student loan may pay 10 percent of disposal income over 150 percent of the federal poverty level ($18,090 for a single individual) for a maximum of two years. All such payments must be applied to the principal.
Schaer and Jasey noted that the change in policy is the first in a series of HESAA reforms they wish to see implemented on behalf of borrowers under the NJCLASS Loan Program. The lawmakers introduced a five-bill legislative package in September to address student loan debt. One of the bills in the package (A-4084) would have required HESAA to establish an income-driven repayment option.
“This is a step in the right direction that will help prevent future generations from falling into the downward spiral of student debt that keeps many young adults from pursuing marriage, homeownership and entrepreneurship in New Jersey,” said Schaer, chair of the Assembly Budget Committee. “While our state has a long way to go in its effort to provide more comprehensive reform for students – an effort that also comprises an emphasis on college readiness and student loan forgiveness – assisting low-income borrowers will limit the financial burden on those dealing with the greatest hardship.”
“Allowing borrowers to adjust loan repayments based on their income will help people who are unemployed or underemployed stay afloat as they look for work that aligns with their education level and skill set,” said Jasey, chair of the Assembly Higher Education Committee. “Unfortunately, we cannot go back in time and assist the many NJCLASS borrowers who already have had the agonizing experience of declaring bankruptcy or dealing with collection agencies, but HESAA now has taken action that will benefit borrowers going forward, which ultimately will benefit the entire state.”