Legislators only go part of it to help those struggling with student loans
A year after hearings on questionable practices by the agency running the New Jersey student loan program, lawmakers have kept only part of their promises to help those struggling to meet their loan obligations. And they seem to have given up what the loudest critics of the loan program consider most important: a loan rehabilitation program for those in default.
Following a hearing last August by two Senate committees on what some senators called “predatory” and “loan shark” practices by the New Jersey Higher Education Student Assistance Authority.
So far four have been signed. Three of them were among dozens from Governor Chris Christie, who signed on Friday before leaving the state. One of these, (A-2926), repeals a law that allowed lawyers and others to suspend their professional licenses for failure to pay state or federal student loans. Other, (A-4088), establishes the High School to College Readiness Commission, tasked with better preparing students for college, including by making recommendations on how students and their parents are aware of the costs of college, state, and federal aid programs, and debt and debt issues Student loan repayment can be clarified.
“The goal of this is to ensure that students in New Jersey fully understand the academic preparation and financial implications of their college choices and improve their ability to successfully complete a college education without lifelong financial crippling,” said Assemblywoman Mila Jasey (D-Essex) and a co-sponsor of the law and chairwoman of the Congregation’s college committee, in a statement last Friday. “As many students begin their studies with insufficient skills for the rigors of study, and the ever-increasing cost of higher education, more and more students and their families are put into devastating debt burdens – sometimes with no degrees – this legislation must be a priority for our state.”
Transparency and accountability
The third bill (A-4238), is another measure designed to increase both the transparency and accountability of the HSAA. It requires the agency, governor and legislature to provide an annual report on the New Jersey College Loans to Assist State Students (NJCLASS) program and develop a loan comparison document that will allow borrowers to obtain NJCLASS loans with them Compare those under federal student loan programs and examples of loan repayment costs.
“It has become the norm for families and students to take on an overwhelming mountain of debt in pursuit of educational goals. This new law will increase the transparency of NJCLASS loan programs, better educate families about loan repayment options and requirements, and help families understand how much they can realistically handle with student loans, ”said Assemblywoman Shavonda Sumter (D-Passaic), a co-sponsor of the bill.
The first bill passed, signed last December, corrected what many lawmakers had viewed as the heartless and egregious practice of the HESAA to continue forcing student loans to be withdrawn from young people who died in school or shortly afterwards. Senate bill S-743 instructs the agency to grant loans when a borrower dies or becomes permanently or completely disabled and to defer payments when an individual becomes severely temporary disabled. Its costs are estimated at $ 1.4 million to $ 1.6 million per year, according to estimates by the bipartisan Office of Legislative Services.
Apply for renewed loan waiver
At its April meeting, the HESAA approved a language to implement these changes and allowed people who may have applied for loan waiver in the past to reapply. At the same time, the agency launched an income-based loan repayment program for borrowers from New Jersey College Loans to Assist State Students (NJCLASS). Beginning next year, those unable to make their minimum loan payments will be able to and receive 10 percent of their disposable income above 150 percent of the federal poverty line, currently $ 18,090 for an individual, for up to two years for up to two years, currently $ 18,090 for an individual applied to lower the loan amount.
An income-based repayment plan, as well as a rehabilitation program that allows those deemed delinquent to return to repayment status, are part of a bill (A4088) that former students and their families saw as the cornerstone of the billing package introduced last year. Although Jasey had passed the Senate and two assembly committees, he seemed to be implying that the bill was off the table.
“Unfortunately, we can’t go back in time and help the many NJCLASS borrowers who have had the excruciating experience of filing for bankruptcy or dealing with debt collection agencies, but the HESAA has now taken steps that will benefit borrowers in the future, of those.” ultimately the entire company benefits state, ”said Jasey in a press release shortly after the HESAA campaign. That publication appeared to indicate that the bill was no longer being considered, and that it would have required the HESAA to put in place an income-based repayment option.
“A punch in the face”
“To me, that’s a slap in the face for any borrower who exposed the terms HSAA placed on them,” said Deborah Carney, whose son went bankrupt after he made his $ 1,000 NJCLASS loan payment Couldn’t afford a month after graduating – it took him 18 months to find a job, and then he was only paying $ 35,000 a year.
Carney was among a number of borrowers and their family members who testified about the HESAA in front of a joint Senate committee last August. Problems listed included the HESAA misleading borrowers about flexible repayment options, not allowing refinancing or credit consolidation, viewing loans as defaulted even with partial payments and sending them for collection with additional fees, and refusing, even voluntarily Provide information on possible debt relief if students died.
Senators were outraged at the time. Senator Robert Gordon (D-Bergen), chairman of the Senate’s oversight committee, suggested abolishing the state loan program and starting from scratch and conducting an independent review of the agency.
NJCLASS made nearly 11,000 loans totaling more than $ 163 million in fiscal 2015 – an average of $ 15,269 per student borrower. As of June 20, 2015, the program had nearly $ 2 billion in outstanding loans from New Jerseyans to colleges and other state students attending schools in New Jersey. While the program is administered by a government agency, the money borrowed comes from private bonds. Students can borrow an amount up to the total amount for tuition, room, board, fees, books and other related costs minus any other financial aid.
Carney, whose son has a petition change.org She requested that the HESAA offer a rehabilitation program, saying she and others would continue to work to help borrowers in trouble, but that may have to wait for the next governor.
In the meantime, four more bills from the original package are pending in the legislature. Neither is specifically designed to help HESAA borrowers but would seek other ways to cut costs.
Assembly invoice A-4086 would do the program for two to four credit-free students. Similar to the NJ STARS Achievement Scholarships, this program would use government study grants to provide free schooling for low-income students.
The Succeed in New Jersey Program, (A-4085), would require the state to spend up to $ 10 million per year to repay a maximum of $ 6,000 in loans for up to three years for low- to middle-income borrowers who work in jobs that are considered in high demand by state labor officials are valid.
The college-ready student program would reduce the overall cost of the college, (A-4087), which would allow public high school juniors and seniors to take dual enrollment courses at county colleges free of charge.
and A-4117 would allow counties to use their improvement agencies to refinance student loans for high-interest borrowers, thereby reducing their debt burden.