Bill > A3848

Introduced Session

This bill establishes a maximum rate of interest for loans disbursed pursuant to the New Jersey College Loans to Assist State Students (NJCLASS) Loan Program. The bill also establishes various protections with respect to private student loans. The NJCLASS loan program, offered and serviced by the New Jersey Higher Education Student Assistance Authority (HESAA), is the State's student loan program. Under current law, the rate of interest of NJCLASS loans is set by HESAA and is typically set by market conditions as the loans are funded through the sale of bonds. Currently, the rate of interest of NJCLASS loans ranges from 5.69 percent to 7.47 percent depending on the term length of the loan and if payments are made on the loan while a student is enrolled in an institution of higher education. Under the bill, the maximum rate of interest for all NJCLASS loans disbursed after the effective date of the bill is not to exceed three percent. This bill also establishes protections for private student loan borrowers. The bill prohibits a private student loan executed on or after the effective date of the bill from including a provision that permits a lender to attempt to collect against the borrower or cosigner's estate, other than for payment default. The bill requires a private student loan lender to release a cosigner from the obligations of the loan in the event of the death of the borrower. The bill also prohibits a lender from changing any terms or benefits established under a promissory note and the repayment schedule, repayment terms, or monthly payment amount associated with the private student loan upon notice of the death or bankruptcy of a cosigner. Additionally, the bill prohibits a private student loan lender from placing into default or accelerating a student loan or student loan account while a borrower is seeking a loan modification or enrollment in a flexible repayment plan for up to 90 days. Under the bill, a lender, upon determination of the total and permanent disability of a borrower, is required to release the borrower and cosigner from the obligations of the private student loan. The bill prohibits the lender from attempting to collect a payment from any borrower or cosigner following a notification of total and permanent disability of the borrower. After making the determination of the total and permanent disability of a borrower, a lender cannot monitor the disability status of the borrower after the date of discharge. Additionally, the bill requires lenders to provide the borrower the option to designate an individual to have the legal authority to act on behalf of the borrower with respect to the private education loan in the event of the total and permanent disability of the borrower.

AI Summary

Committee Categories

Don Guardian (R)*,  Bill Moen (D)*,  Claire Swift (R)*, 

Introduced, Referred to Assembly Higher Education Committee (on 02/22/2024)

Official Document