Mazzeo, Zwicker, Jasey, Vainieri Huttle, Schaer, Jones, Eustace, Land, Gusciora, Andrzejczak, Downey, Houghtaling & Mukherji Bill would Eliminate Student Loan Debt in the Event of Death or Permanent Disability
The Senate granted final legislative approval Thursday to a bill that would forgive certain student loan debt in the event of a borrower's death or total permanent disability, a measure sponsored by Assembly Democrats Vince Mazzeo, Andrew Zwicker, Mila Jasey, Valerie Vainieri Huttle, Gary Schaer, Patricia Jones, Tim Eustace, Bruce Land, Reed Gusciora, Bob Andrzejczak, Joann Downey, Eric Houghtaling and Raj Mukherji.
"Imagine you're a family who always pays their bills, has good credit and then you lose a child and in the midst of your grief, you're saddled with tens, if not hundreds, of thousands of dollars in their remaining student loan debt," said Mazzeo (D-Atlantic). "That's just something we can't allow to happen on our watch."
"To expect a student's family or other survivors to pay their college loan debt in the event of their death is cruel and unacceptable. We can do better than that," said Zwicker (D-Somerset/Mercer/Middlesex/Hunterdon).
"I've heard a number of heartbreaking stories of grieving parents being saddled with their child's student loan debt after they passed away. That's something no one should have to endure," said Jasey (D-Essex/Morris), Chair of the Assembly Higher Education Committee.
The bill (S-743/A-2761), which was approved by the Assembly last month, directs the state Higher Education Student Assistance Authority to forgive certain student loans in the event of a student borrower's death or total and permanent disability and grant deferment for temporary total disability.
"One would think this would already be an existing clause, but sadly it's not," said Vainieri Huttle (D-Bergen). "If someone's life is cut short, we shouldn't expect their family to pay for a future they never got to fulfill. It's as simple as that,"
"Given the exorbitant cost of college, it's unthinkable that we would expect a family to have to pay off their loved one's student loan debt should they pass away," said Schaer (D-Bergen/Passaic).
"This is one student loan program that we have authority over as a state and we should be exerting it to help surviving families," said Jones (D-Camden/Gloucester).
The bill applies to loans issued under the NJCLASS program - New Jersey College Loans to Assist State Students - which helps cover college costs not already covered by other sources of grants, scholarships and loans. The program offers low-cost rates on supplemental loans to New Jersey residents attending an eligible in-state or out-of-state school, as well as out-of-state students attending a school in New Jersey.
In the event of the death of an eligible student borrower under the NJCLASS Loan Program, the authority shall fully discharge the obligation of the student borrower and a parent or guardian who cosigned the loan. The executor or administrator of the student borrower's estate shall provide written notification to the authority of the student borrower's death and shall provide the authority with a certified copy of the death certificate within 120 days of the student's borrower's death.
"Dealing with the loss of a loved one is hard enough. Getting a bill for their student loan debt just adds salt to the wound, something no one should endure," said Eustace (D-Bergen/ Passaic).
"On top of an already painful grieving process, some families have actually been harassed by loan collectors. That should never happen in New Jersey," said Land (D-Cape May/Atlantic/ Cumberland).
"It might seem macabre to think about this situation, but the fact is that it occurs. This bill will eliminate that painful scenario," said Gusciora (D-Mercer/Hunterdon).
In the event that an eligible student borrower becomes totally and permanently disabled, the authority shall fully discharge the obligation of the student borrower and a parent or guardian who cosigned the loan. To qualify for the loan discharge the student borrower shall provide the authority with a written statement from a physician, who is a doctor of medicine or osteopathy and is legally authorized to practice, certifying that the student borrower is totally and permanently disabled.
"In some cases, a spouse ends up widowed and struggling to support a family and then they are hit with a student loan bill on top of it all. This bill will make sure that doesn't happen," said Andrzejczak (D-Cape May/Atlantic/Cumberland).
"Federal student loan debt is already forgiven in the event of a borrower's death. We should exercise compassion and common sense at the state level and follow suit," said Downey (D-Monmouth).
In the event that an eligible student borrower becomes temporarily totally disabled, the authority shall grant a deferment of payment of loan principal and interest. To qualify for the loan deferment, the student borrower shall provide the authority with a written statement from a physician, who is a doctor of medicine or osteopathy and is legally authorized to practice, certifying that the student borrower is temporarily totally disabled.
"If someone's life is cut short, before they were able to put their education to use, the compassionate thing to do, for the sake of their grieving families, is to forgive these loan debts," said Houghtaling (D-Monmouth).
"The price of a college education has skyrocketed over the last few decades. To tell a grieving family that they now have to pay these exorbitant bills, even though they will never get to see their loved one fulfill their promise, is unacceptable," said Mukherji (D-Hudson).
The deferment would begin on the date that the student borrower's temporary total disability is certified to begin and shall end on the date that the temporary total disability is certified to end. Interest on the loan would not accrue during the period of deferment.