ASSEMBLY APPROPRIATIONS COMMITTEE

 

STATEMENT TO

 

[First Reprint]

ASSEMBLY, No. 1119

 

STATE OF NEW JERSEY

 

DATED: JUNE 13, 1996

 

      The Assembly Appropriations Committee reports favorably Assembly Bill No. 1119 (1R).

      Assembly Bill No. 1119 (1R) establishes procedures to ensure that persons who win State lottery prizes in excess of $1,000 and who have failed to make scheduled payments to the Office of Student Assistance on any student loan note held by the Office of Student Assistance will have the proceeds of their lottery winnings automatically applied against the outstanding balance of their defaulted student loan.

      The Executive Director of the Office of Student Assistance is to forward to the Office of Telecommunications and Information Systems (OTIS), a list of individuals who are in default of student loan repayments. Similarly, the Division of the State Lottery is to provide OTIS with a list of lottery prize winners which shall include the prize winner's name, address, social security number, and amount of the pending prize payment. OTIS is to cross check the two lists and if a match is made to notify the Office of Student Assistance. The Office of Student Assistance will then notify the Division of the State Lottery and provide the division with information on the outstanding amount of the student loan. The Department of the Treasury shall withhold this amount from the pending lottery payment and transmit it to the Office of Student Assistance. If the amount of the outstanding student loan is greater than the lottery payment, the entire amount available shall be transmitted to the Office of Student Assistance after the withholding of any amounts necessary for State or federal income taxes or for such other withholdings that may be required under State or federal law.

      

FISCAL IMPACT:

      The Office of Student Assistance (OSA) estimates additional revenue of up to $100,000 could be collected for student loan default payments. Of this amount, $10,000 is estimated to be payable to the N.J. College Loans to Assist State Students (NJCLASS) and $90,000


would be used to repay federal guaranteed student loans in default which flow through the State system. The administrative cost is estimated to be nominal to the OSA. The Lottery Division had no estimate as to new offsets or administrative costs but plans to absorb additional workload in this operation.