(TRENTON) – Legislation sponsored by Assembly Democrats Shavonda Sumter, Mila Jasey, Dan Benson, Elizabeth Maher Muoio and Joann Downey to combat student loan debt in New Jersey was signed into law on Monday.
“The only concern a college student should have after graduating is choosing which job will lead them closer to their goals,” said Sumter (D-Bergen/Passaic).
“It has become the norm for families and students to take on an overwhelming amount of debt to pursue educational goals. We must increase transparency under NJCLASS Loan Programs, better educate families on loan repayment options and requirements as well as help families understand how much they can realistically handle in student loans.”
“Furthering your education is necessary to advance a career,” Jasey (D-Essex/Morris). “It should never be a burden to do so, and it should be encouraged without fear of debt. This is the first step toward helping families struggling to send their children to college without saddling them with cumbersome loan debt.”
The new law (formerly bill A-4239) revises the NJ CLASS program to require that applicants first exhaust federal student loans, conduct income verification and limit total student loan amounts.
“The college experience should be one focused on learning, not overshadowed by mounting loans students must pay back upon graduation,” said Muoio (D-Mercer/Hunterdon). “This new law requires the state to be as transparent as possible about student loan options. This is the first step to helping families avoid burdening themselves with debt.”
“College loan debt should not follow you throughout your adult life,” said Benson (D-Mercer/Middlesex). “Responsible reform and targeted measures to educate incoming college students on managing loan debt is necessary to helping students make informed choices. It’s time to end this cycle of loading students up with debt that too often takes a lifetime to pay back.”
“We want students to graduate and be able to shoot for their dreams without being hampered by years of loan repayments that hinder their productivity,” said Downey (D-Monmouth). “These changes will make the state’s higher education authority a stronger advocate for our students.”
The new law makes three changes to the New Jersey College Loans to Assist State Students (NJCLASS) Program:
1) Require that HESAA verify the financial information reported by a borrower or cosigner on an NJCLASS loan application;
2) Mandate that HESAA deduct the maximum amount of federal direct subsidized loans available to the student from the available NJCLASS loan amount when establishing the maximum annual loan amount for a student borrower. If the available interest rate for federal direct unsubsidized loans is lower than the interest rate available to the student under the NJCLASS loan program, the authority must deduct the maximum amount for federal direct unsubsidized loans available to the student from the NJCLASS loan amount; and
3) Provide that a student borrower’s total loans under NJCLASS may not exceed $150,000.
The bill was approved by the Assembly, 76-0 in June. The new law takes effect immediately.