A3144

An Act establishing the New Jersey College Loans to Assist State Students (NJCLASS) Teacher Loan Redemption 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. As used in this section:

"Program participant" means an undergraduate student borrower under the New Jersey College Loans to Assist State Students (NJCLASS) Loan Program established pursuant to N.J.S.18A:71C-21 who is initially hired as a teacher of science or mathematics in a public school following the effective date of this act and who has executed a contract with the authority for participation in the NJCLASS Teacher Loan Redemption Program. A program participant shall be a certified teacher and a resident of New Jersey.

"Public school" means a school located in New Jersey, under collegiate grade, which is operated by a school district or a charter school established pursuant to P.L.1995, c.426 (C.18A:36A-1 et seq.);

"School district" means a local or regional school district established pursuant to chapter 8 or chapter 13 of Title 18A of the New Jersey Statutes, a county special services school district established pursuant to article 8 of chapter 46 of Title 18A of the New Jersey Statutes, a county vocational school district established pursuant to article 3 of chapter 54 of Title 18A of the New Jersey Statutes, and a school district under full State intervention pursuant to P.L.1987, c.399 (C.18A:7A-34 et seq.).

b. There is established in the Higher Education Student Assistance Authority the New Jersey College Loans to Assist State Students (NJCLASS) Teacher Loan Redemption Program. The loan redemption program shall provide for the redemption of a portion of the loans a program participant receives under the NJCLASS Loan Program pursuant to article 2 of chapter 71C of Title 18A of the New Jersey Statutes for service as a teacher of science or mathematics in a public school in New Jersey.

c. A program participant may redeem his NJCLASS loan amounts upon execution of a contract between the program participant and the authority. The contract shall be for a specified number of periods of service. The contract shall specify the total amount of debt, up to 100%, to be redeemed by the State in return for service pursuant to subsection d. of this section.

d. For service as a teacher of science or mathematics in a public school in a district that received preschool expansion aid or education opportunity aid in the 2007-2008 school year, the redemption of loans under the loan redemption program shall amount to 45% of principal and interest of a program participant's NJCLASS loan amounts upon the completion of the first three years of service and 15% of principal and interest for each additional year of service thereafter. For service as a teacher of science and mathematics in all other public schools, the redemption of loans under the loan redemption program shall amount to 30% of principal and interest of a program participant's NJCLASS loan amounts upon the completion of the first three full years of service and 10% of principal and interest for each additional year of service thereafter. Service for less than the full number of school years or full school year, as applicable, of each period of service shall not entitle the program participant to any benefits under the loan redemption program. Prior to the redemption of loan indebtedness, a program participant shall submit to the authority proof of employment.

e. A program participant who has entered into a redemption contract with the authority may nullify his contract by submitting written notification to the authority and assuming full responsibility for repayment of principal and interest on the full amount of his loans or that portion of the loans which has not been redeemed by the State, in return for partial fulfillment of the contract.

f. In case of a program participant's death or total and permanent disability, the authority shall nullify the service obligation of the program participant. The nullification shall terminate the authority's obligations under the loan redemption contract. If continued enforcement of the contract may result in extreme hardship, the authority may nullify or suspend the service obligation of the program participant.

2. The authority shall adopt, in consultation with the Department of Education, pursuant to the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations necessary to effectuate the purposes of this act.

3. This act shall take effect immediately.

STATEMENT

This bill establishes the New Jersey College Loans to Assist State Students (NJCLASS) Teacher Loan Redemption Program in the Higher Education Student Assistance Authority. The program would allow a person to redeem a portion of his NJCLASS loan amounts for service as a teacher of science or mathematics in a public school in New Jersey.

Under the bill, in order to participate in the loan redemption program, a person must have been an undergraduate student borrower in the NJCLASS Loan Program. A participant must also be a resident of the State and a certified teacher who obtained initial employment in a public school as a science or mathematics teacher after the effective date of this bill. In order to participate in the loan redemption program a person must execute a contract with the authority. The contract would be for a specified number of periods of service and would specify the total amount of debt, up to 100%, to be redeemed by the State in return for the service.

For teachers in districts that received preschool expansion aid or education opportunity aid in the 2007-2008 school year (former Abbott districts), the redemption of loans under the loan redemption program would amount to 45% of principal and interest of a program participant's NJCLASS loan amounts upon the completion of the first three full years of service as a teacher of science or mathematics and 15% of principal and interest for each additional year of service thereafter. For teachers of science and mathematics in other school districts in the State, the redemption would amount to 30% of principal and interest of the NJCLASS loan amounts upon completion of the first three full years of service and 10% of principal and interest for each additional year of service thereafter.