Bill Text: NJ S3218 | 2016-2017 | Regular Session | Introduced
Bill Title: Requires Higher Education Student Assistance Authority to establish repayment assistance program for borrowers under New Jersey College Loans to Assist State Students Loan Program who suffer material loss of income.
Spectrum: Partisan Bill (Democrat 16-0)
Status: (Enrolled - Dead) 2018-01-08 - Passed Assembly (Passed Both Houses) (65-3-0) [S3218 Detail]
Download: New_Jersey-2016-S3218-Introduced.html
Sponsored by:
Senator SANDRA B. CUNNINGHAM
District 31 (Hudson)
Senator NELLIE POU
District 35 (Bergen and Passaic)
SYNOPSIS
Requires Higher Education Student Assistance Authority to establish repayment assistance program for borrowers under New Jersey College Loans to Assist State Students Loan Program who suffer material loss of income.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the New Jersey College Loans to Assist State Students (NJCLASS) Loan Program 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. a. The Higher Education Student Assistance Authority shall establish a repayment assistance program under the NJCLASS Loan Program for borrowers who experience a material loss of income during the period of loan repayment. Under the repayment assistance program, a borrower's payment shall be limited to 10 percent of disposable income over 150 percent of the federal poverty level.
b. A borrower shall be eligible to participate in the repayment assistance program for a period of two years. During the period of participation in the repayment assistance program, the authority shall pay the interest on the NJCLASS loan and the payments made by the borrower shall be applied to the reduction of the principal balance of the loan. At the end of the borrower's participation in the repayment assistance program, the regular monthly repayment amount shall be recalculated based on the remaining principal balance of the loan.
c. In the event that the authority files a proof of claim against a borrower in a bankruptcy proceeding, the authority shall notify the borrower of the repayment assistance program.
d. A borrower under the NJCLASS Loan Program who has been adjudicated a bankrupt prior to or following the effective date of this act shall be eligible to participate in the repayment assistance program.
2. This act shall take effect on the sixth month next following the date of enactment.
STATEMENT
This bill directs the Higher Education Student Assistance Authority to establish a repayment assistance program under the New Jersey College Loans to Assist State Students (NJCLASS) Loan Program for borrowers who experience a material loss of income during the period of loan repayment. Under the program, a borrower's payment will be limited to 10 percent of disposable income over 150 percent of the federal poverty level.
Under the bill, a borrower will be eligible to participate in the repayment assistance program for a period of two years. During that two-year period, the authority will pay the interest on the NJCLASS loan and the payments made by the borrower will be applied to the reduction of the principal balance of the loan. At the end of the borrower's participation in the repayment assistance program, the regular monthly repayment amount will be recalculated based on the remaining principal balance of the loan.
The bill stipulates that a borrower under the NJCLASS Loan Program who has been adjudicated a bankrupt prior to or following the effective date of this act will be eligible to participate in the repayment assistance program.
