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  • NJ A4117
  • Permits county improvement authorities to establish student loan refinancing loan programs.
Introduced
(9/15/2016)
In Committee
(1/12/2017)
Crossed OverPassedSignedDead/Failed/Vetoed
2016-2017 Regular Session
This bill is intended to permit county improvement authorities to establish programs to refinance student loan debt, including loans to attend proprietary institutions licensed to offer academic degrees (for example, DeVry University - New Jersey) for students who are residents of the county. A student-borrower who is a resident of the county or a parent-borrower who is a New Jersey resident or employee and whose child-student is a resident of the county could apply to refinance that student loan debt at a lower interest rate, which loan may stay in place as long as the student remains a resident of New Jersey. The purpose for permitting county improvement authorities to refinance student loan debt is to offer a borrower an option to lower their loan interest rate, decreasing the borrower's student debt obligation and making it financially easier for former students to remain in New Jersey. Currently, New Jersey students graduate with an average of $32,700 in student loan debt. The county improvement authority would set the interest rate and other terms of the student loan refinancing loan, provided that the interest rates charged must be sufficient to pay the principal and interest on any bonds issued by the authority to fund its program. The authority would have to provide at least two different types of repayment plans, one of which must provide, to the extent practicable, deferment or forbearance options. To ensure no undue hardship is placed on the borrower, an authority is not permitted to refinance a student loan if the payments would result in an undue hardship on the borrower, taking into consideration their current income and expenses. Although student loans are generally non-dischargeable in federal bankruptcy proceedings, some case law indicates that bankruptcy judges may discharge loans for undue hardship. The bill provides that it is intended that any student loan refinancing loan not be dischargeable in bankruptcy. Since most refinancing borrowers have no property, such as a house, to secure a refinancing student loan, it is important for the authority to ensure that the flow of regular monthly payments from refinancing borrowers is sufficient to pay the principal and interest on any authority bonds issued to fund its student loan refinancing program. Lastly, the bill would require that the authority ensure that a borrower may contact and speak with a live representative of the authority who can access the borrower's loan information and who has knowledge of the student loan refinancing program.
2nd Reading in the Assembly
Assembly Floor Amendment Passed (Johnson)  (on 2/15/2017)
 
 
Date Chamber Action Description
2/15/2017 A Assembly Floor Amendment Passed (Johnson)
1/12/2017 A Reported out of Assembly Committee, 2nd Reading
1/12/2017 Assembly Higher Education Hearing (10:00 1/12/2017 Committee Room 15, 4th Floor)
9/15/2016 A Introduced, Referred to Assembly Higher Education Committee
Date Motion Yea Nay Other
Detail 1/12/2017 Assembly Higher Education Committee: Reported Favorably 8 0 1