Senator SANDRA B. CUNNINGHAM
District 31 (Hudson)
Senator NELLIE POU
District 35 (Bergen and Passaic)
Senator ROBERT M. GORDON
District 38 (Bergen and Passaic)
Senators Cruz-Perez, Diegnan, Greenstein and Stack
Revises New Jersey College Loans to Assist State Students Loan Program to require applicants first exhaust federal student loans, require income verification, and limit total student loan amounts.
CURRENT VERSION OF TEXT
An Act concerning the NJCLASS loan program and amending N.J.S.18A:71C-23 and N.J.S.18A:71C-25.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.18A:71C-23 is amended to read as follows:
18A:71C-23. Loans under the NJCLASS Loan Program may be made to eligible borrowers. An eligible borrower is an eligible student or any parent, spouse, legal guardian or other relative providing financial support for a dependent eligible student. The authority shall set maximum loan amounts for each participant based on such factors as the cost of attending the particular institution, family income, value of family assets or other factors the authority may consider relevant. The loans may be secured by such endorsement, co-maker's collateral or other security as may be required by rules and regulations established by the authority. When considering an application, the authority shall use appropriate documents to verify the financial information provided by an eligible borrower or cosigner. The documents that the authority may use to verify the financial information may include, but need not be limited to, recent federal income tax returns, current pay stubs, and current bank statements.
2. N.J.S.18A:71C-25 is amended to read as follows:
18A:71C-25. a. The authority shall establish maximum annual loan amounts and maximum total loan amounts which may be made under the NJCLASS Loan Program; however, the amount of a NJCLASS Loan Program loan may not exceed, in combination with other financial aid, the total education costs of attending an eligible institution as determined by that institution plus the amount of interest payments which may be deferred pursuant to N.J.S.18A:71C-26.
b. In the case of a student borrower who first borrows under the NJCLASS Loan Program after the effective date of P.L. , c. (pending before the Legislature as this bill), the maximum total loan amount which may be made shall not exceed $200,000.
c. When establishing the maximum annual loan amount for a student borrower, the authority shall require that the student borrower first borrows the maximum amount of federal Direct Subsidized Loans and federal Direct Unsubsidized Loans available to the student.
3. This act shall take effect immediately.
This bill makes three changes to the New Jersey College Loans to Assist State Students (NJCLASS) Loan Program. First, it requires that the Higher Education Student Assistance Authority (HESAA) verify the financial information reported by a borrower or cosigner on an NJCLASS loan application. Second, it mandates that a student borrower, prior to receiving an NJCLASS loan, borrows the maximum amount available to the student under the federal Direct Subsidized and federal Direct Unsubsidized loan programs. Last, it provides that a student borrower’s total loans under NJCLASS may not exceed $200,000.