Bill Text: NJ S749 | 2022-2023 | Regular Session | Introduced
Bill Title: Requires institutions of higher education to send out annual student debt letters; requires students enrolled in public institutions of higher education to complete course on student loan debt repayment.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2022-01-11 - Introduced in the Senate, Referred to Senate Higher Education Committee [S749 Detail]
Download: New_Jersey-2022-S749-Introduced.html
STATE OF NEW JERSEY
220th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2022 SESSION
Sponsored by:
Senator JOSEPH A. LAGANA
District 38 (Bergen and Passaic)
Co-Sponsored by:
Senator Diegnan
SYNOPSIS
Requires institutions of higher education to send out annual student debt letters; requires students enrolled in public institutions of higher education to complete course on student loan debt repayment.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning certain financial information provided by institutions of higher education and supplementing chapter 3B and chapter 62 of Title 18A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "Know Before You Owe Student Loan Debt Act."
2. a. Prior to the start of each academic semester, an institution of higher education that receives student loan information for a student enrolled in the institution shall send to the student by regular mail a letter that includes the following:
(1) an estimate of the total amount of student loans taken out by the student;
(2) an estimate of the potential total payoff amount of the student loans incurred or a range of the total payoff amount;
(3) an estimate of monthly repayment amounts that a similarly situated borrower may incur, including principal and interest, for the amount of loans the student has taken out at the time the information is provided;
(4) the percentage of the borrowing limit the student has reached at the time the information is provided;
(5) a statement that the student should contact the lender to determine when the borrower is authorized to begin making repayments, and whether those repayments would include both the principal and interest amount of the loans;
(6) a warning that the higher the borrower's debt-to-income ratio is, the more difficulty the borrower is likely to experience in repaying the loans;
(7) information concerning options for reducing borrowing through scholarships, reduced expenses, work-study, or other work opportunities; and
(8) an explanation of the importance of graduating on time to avoid additional borrowing, the requisite course load necessary to graduate on time, and information on how additional years of study impact total indebtedness.
The information provided pursuant to paragraphs (1), (2), and (3) of this subsection may include a statement that the estimates and ranges provided are general in nature and not meant as a guarantee or promise of the actual projected amount.
b. An institution shall not incur liability for any representations made pursuant to this section.
3. Beginning with the 2020-2021 academic year, the governing board of a public institution of higher education shall require a full-time undergraduate student who has student loan debt to complete an on-line course, or receive in-person counseling from a qualified member of the institution, on the repayment of student loan debt and the consequences of the failure to make required repayments. The on-line course or in-person counseling shall be required during the student's final semester prior to graduating from the institution.
4. This act shall take effect immediately.
STATEMENT
This bill is known as the "Know Before You Owe Student Loan Debt Act." The purpose of the bill is to increase student awareness concerning student debt, and to encourage students to borrow less than the maximum amounts they are awarded and begin making repayments earlier.
This bill requires an institution of higher education that receives student loan information for a student in the institution to send the student by regular mail each semester a student debt letter. Under the bill, the student debt letter would include:
· an estimate of the total amount of student loans taken out by the student;
· an estimate of the potential total payoff amount of the student loans incurred or a range of the total payoff amount;
· an estimate of monthly repayment amounts that a similarly situated borrower may incur, including principal and interest, for the amount of loans the student has taken out at the time the information is provided;
· the percentage of the borrowing limit the student has reached at the time the information is provided; and
· a statement that the student should contact the lender to determine when the borrower is authorized to begin making repayments, and whether those repayments would include both the principle and interest amount of the loans.
The letter would also include information concerning options for reducing borrowing through scholarships, reduced expenses, work-study, or other opportunities.
An institution would not incur liability for any information provided under the bill.
The bill also requires each full-time undergraduate student at a public institution of higher education who has student loan debt to complete an on-line course, or receive in-person counseling from a qualified member of the institution, on the repayment of student loan debt and the consequences of the failure to make required repayments. The on-line course or in-person counseling will be required during the student's final semester prior to graduating from the institution.
