S544

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:

"Nonpublic school" means an elementary or secondary nonprofit school within the State, other than a public school, offering education for grades kindergarten through 12, or any combination of them, wherein any child may legally fulfill compulsory school attendance requirements and which complies with the requirements of Title VI of the Civil Rights Act of 1964 (P.L. 88-352);

"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 in a public or nonpublic 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 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 district under full State intervention pursuant to P.L.1987, c.399 (C.18A:7A-34 et al.);

"Teacher" means a person who provides direct classroom teaching; classroom-type teaching in a non-classroom setting; or educational services to students directly related to classroom teaching. A supervisor, administrator, or curriculum specialist is not a teacher unless he primarily provides direct and personal educational services to students. An individual who provides one or more of the following services does not qualify as a teacher unless that individual is licensed or certified for that area in which he is providing related special educational services, and the services provided by the individual are part of the educational curriculum for disabled students: speech and language pathology and audiology; physical therapy; occupational therapy; psychological and counseling services; or recreational therapy.

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 each year of service as a teacher in a public or nonpublic 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 one-year periods of service. The contract shall specify the total amount of debt to be redeemed by the State in return for service pursuant to subsection d. of this section.

d. The redemption of loans under the loan redemption program shall amount to 10% of principal and interest of a program participant's NJCLASS loan amounts in return for one full year of service. Service for less than the full school year of each period of service shall not entitle the program participant to any benefits under the loan redemption program. Prior to the annual redemption of loan indebtedness, a program participant shall submit to the authority proof of employment in a public or nonpublic school.

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, except in the event that a program participant's death or total and permanent disability occurs after the second year of service, the authority shall redeem the current year of service. 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 each year of service as a teacher in a public or nonpublic 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 who obtained initial employment in a public or nonpublic school 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 one-year periods of service and would specify the total amount of debt to be redeemed by the State in return for the service. The redemption of loans under the loan redemption program would amount to 10% of principal and interest of the NJCLASS loan amounts for a full year of service.