New Jersey has worked hard to prioritize access to higher education for New Jersey students, knowing the importance of college opportunity for people of all ages and backgrounds, the economy, and the state’s future.
Together with New Jersey’s Higher Education Student Assistance Authority, Assembly Speaker Craig J. Coughlin held a press conference Thursday at The College of New Jersey to highlight new tax savings that go into effect beginning in the 2022 tax year under the New Jersey College Affordability Act.
“Young people today, even before buying a house, have a mortgage and it’s called their student loans,” said Speaker Coughlin (D-Middlesex). “With a three-fold approach to helping New Jersey’s working and middle-class families afford college by encouraging savings toward future college costs, providing tax relief for those paying tuition, and assisting with the repayment of state loans, we’re lightening the daunting challenge of paying for higher education. Ensuring every child and parent knows the state has their back in being socially and economically successful is the goal.”
The Act creates three new tax savings programs for families and households making up to $200,000:
- An annual State income tax deduction for up to $10,000 in contributions to each NJBEST 529 College Savings Plan account.
- An annual State income tax deduction for up to $10,000 for tuition paid at a New Jersey college or university.
- A State income tax deduction for up to $2,500 in principal and interest paid towards the balance of a New Jersey College Loan to Assist State Students (NJCLASS) family loan.
For families with an adjusted gross income between $0 and $75,000, the law also provides a one-time grant of up to $750, as a dollar-for-dollar match of the initial deposit into a new account with a new student beneficiary. With the minimum initial investment to open a tax-advantaged NJBEST account being just $25, this is an affordable and accessible savings vehicle for most families.
“The NJBEST 529 College Savings Plan helps New Jersey families borrow less and avoid student loan debt by saving for future college expenses. We are now offering new incentives to save for college thanks to the New Jersey College Affordability Act that was enacted through the leadership of Governor Murphy, Speaker Coughlin, Chairwoman Jasey, and their colleagues in the Legislature,” said David Socolow, Executive Director of the New Jersey Higher Education Student Assistance Authority (HESAA). “Eligible New Jersey families opening a new NJBEST account can receive up to $750 in dollar-for-dollar matching grants to boost their savings. When NJBEST account beneficiaries go on to enroll at a New Jersey college or university, they can apply for a scholarship of up to $3,000.
“Starting with tax year 2022, New Jersey taxpayers can deduct up to $10,000 in annual contributions to an NJBEST account from their state income taxes, as well as tax deductions for annual payments toward in-state tuition and NJCLASS loans. Together with HESAA’s existing State financial aid grants and scholarships and the new Garden State Guarantee, these initiatives are helping to make college more affordable and expand economic opportunity.”
“The College Affordability Act will help knock down barriers in New Jersey that have prevented many low-income families from accessing the significant benefits that higher education provides,” said Dr. Kathryn Foster, TCNJ President. “A college-educated workforce is essential for both the future of our state and the economic mobility of its citizens.”
“To set our students up for success, we have to address the devastating student loan debt limiting the ability of college graduates to pursue their career and life goals,” said Assembly Higher Education Committee Chair Mila Jasey (D-Essex, Morris). “Many graduates are forced to delay important milestones like buying a house or starting a family because their student loan debt has followed them well into their adult lives. By helping families in New Jersey afford college with the New Jersey College Affordability Act, we are preventing countless students from having to choose between academic success and economic security in their future.”
“Providing an affordable college education is a cornerstone of the State’s vision for higher education,” said Deputy Secretary of Higher Education Katie Comanto. “Investments in postsecondary access and attainment are fundamental to improving employment prospects and outcomes for residents, specifically those from low-income and marginalized communities. By supporting students and retaining in-state talent, we can continue to build a highly skilled and educated workforce that bolsters economic prosperity for all New Jerseyans.”
“About 1.2 million New Jersey residents — one in six adults — owe a collective $40.5 billion in outstanding federal student loans,” said Beverly Brown Ruggia, Financial Justice Program Director for New Jersey Citizen Action. “These residents, young and old, can’t use that money to buy a first home, start families, cover basic expenses, save for retirement, or otherwise be full participants in our state economy. The tax deductions provided by the College Affordability Act will help New Jerseyans invest in their education without debt, and are another example of the comprehensive approach state policymakers are taking to address the student debt crisis. We applaud Speaker Coughlin for championing this critical legislation, which takes effect this tax season. We look forward to continuing to work with the Legislature and Governor Murphy on ways to end the crisis and to restore the great American tradition of access to higher education for all.”
“College affordability is at the heart of building a better future for young people in New Jersey,” said Roshni Raji, Executive President of TCNJ’s Student Government. “Helping talented, passionate, and hardworking New Jersey students find the same opportunities that I have been given to thrive, the College Affordability Act means every student who has a dream of attending college now has an easier path.”