A968

An Act establishing a loan redemption program for certain public school teachers and supplementing chapter 71C of Title 18A of the New Jersey Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in this act:

“Authority” means the Higher Education Student Assistance Authority established pursuant to N.J.S.18A:71A-3.

“Eligible student loan expenses” means $9,000 or the outstanding balance of the principal and interest due on student loans, whichever is less, used to cover the cost of attendance while enrolled in an undergraduate or graduate degree program at an institution of higher education.

“Program participant” means a person who is initially hired by a school district following the effective date of this act and who meets the criteria of subsection a. of section 2 of this act, and who has executed a contract with the Higher Education Student Assistance Authority for participation in the loan redemption program. A program participant shall be a resident of New Jersey.

“Public school” means a school located in New Jersey, under collegiate grade, which is operated by a school district or a charter school established pursuant to P.L.1995, c.426 (C.18A:36A-1 et seq.).

“School district” means a local or regional school district established pursuant to chapter 8 or chapter 13 of Title 18A of the New Jersey Statutes, a county special services school district established pursuant to article 8 of chapter 46 of Title 18A of the New Jersey Statutes, a county vocational school district established pursuant to article 3 of chapter 54 of Title 18A of the New Jersey Statutes, and a school district under full State intervention pursuant to P.L.1987, c.399 (C.18A:7A-34 et seq.).

2. a. There is established in the Higher Education Student Assistance Authority a loan redemption program for public school teachers who meet the following criteria:

(1) graduated in the top 20% of the student’s high school graduating class or scored in the top 20% on the Scholastic Assessment Test (SAT) or the American College Testing (ACT) examination;

(2) graduated from an institution of higher education with a grade point average of at least 3.5; and

(3) teaches science, technology, engineering or mathematics (STEM) classes or special education.

The program shall provide for the redemption of the eligible student loan expenses of a program participant following the third consecutive year of full-time employment as a teacher of science, technology, engineering, mathematics or special education in a public school.

b. A program participant may redeem eligible student loan expenses upon execution of a contract between the program participant and the authority. The contract shall specify the total amount of debt to be redeemed by the State in return for service pursuant to subsection c. of this section.

c. The redemption of loans under the loan redemption program shall amount to $9,000 or the outstanding balance of the principal and interest of eligible student loan expenses, whichever is less, following the third consecutive year of full-time employment as a teacher of science, technology, engineering, mathematics or special education in a public school. A program participant shall submit to the authority proof of eligible employment in a public school prior to redemption of loan indebtedness. A program participant is not required to teach at the same public school for three consecutive years.

d. A program participant who has entered into a redemption contract with the authority may nullify the contract by submitting written notification to the authority and assuming full responsibility for repayment of principal and interest on the full amount of his loans or that portion of the loans which has not been redeemed by the State in return for fulfillment of the contract.

e. In the case of the program participant’s death or total and permanent disability, the authority shall nullify the service obligation of the program participant. The nullification shall terminate the authority’s obligations under the loan redemption contract. If continued enforcement of the contract results in extreme hardship, the authority may nullify or suspend the service obligation of the program participant.

3. The authority shall annually submit a report on the program to the Governor and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1). The report shall be submitted no later than August 1 of each year and shall include, but not be limited to, information on the total number of participants receiving loan redemption under the program, the impact of the program on attracting teachers to teach STEM subjects or special education, and the number of participants who withdrew from the program prior to the completion of the required service.

4. The authority, in consultation with the Department of Education, shall adopt pursuant to the provisions of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations necessary to effectuate the purposes of this act.

5. This act shall take effect immediately.

STATEMENT

This bill establishes a loan redemption program in the Higher Education Student Assistance Authority for public school teachers who meet certain academic requirements and who teach STEM subjects or special education. Under the bill, a program participant must meet the following conditions to be eligible:

· graduated in the top 20% of the student’s high school graduating class or scored in the top 20% on the SAT or ACT examination;

· graduated from an institution of higher education with a grade point average of at least 3.5; and

· teaches STEM subjects or special education.

In order to participate in the loan redemption program, a person must be a resident of New Jersey and execute a contract with the authority. The redemption of loans under the program would amount to $9,000 or the outstanding balance of the principal and interest of eligible student loan expenses, whichever is less, following the third consecutive year of full-time employment as a teacher of science, technology, engineering, mathematics or special education in a public school. A program participant is not required to teach at the same public school for three consecutive years.

Under the bill, the authority must annually submit a report on the program to the Governor and to the Legislature. The report will be submitted no later than August 1 of each year and will include, at a minimum, information on the total number of participants receiving loan redemption under the program, the impact of the program on attracting teachers to teach STEM subjects or special education, and the number of participants who withdrew from the program prior to the completion of the required service.