A1670

An Act concerning the New Jersey College Loans to Assist State Students (NJCLASS) Teacher Loan Redemption Program and amending and supplementing P.L.2021, c.384.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 1 of P.L.2021, c.384 (C.18A:71C-83) is amended to read as follows:

1. As used in [this act] P.L.2021, c.384 (C.18A:71C-83 et seq.) and P.L. , c. (C. ) (pending before the Legislature as this bill):

"Authority" means the Higher Education Student Assistance Authority established pursuant to N.J.S.18A:71A-3.

"High-need field" means a subject area or field of expertise in which there is a shortage of qualified teachers in the State as determined by the Department of Education. The department shall reassess its designation of high-need fields at least every two years.

"Low-performing school" means any public school that meets the criteria of paragraph (1) or paragraph (2):

(1) among all students in that school to whom a State assessment was administered, the sum of the percent of students scoring in the not-yet-meeting expectations and partially meeting expectations categories in both the language arts and mathematics subject areas of the State assessments exceeded 40[%] percent in each of the prior two school years; or

(2) among all students in that school to whom a State assessment was administered, the sum of the percent of students scoring in the not-yet-meeting expectations and partially meeting expectations categories in either the language arts or mathematics subject areas of the State assessment exceeded 65[%] percent in each of the prior two school years.

(3) A school shall continue to be designated a low-performing school until such time that the sum of the percent of students scoring in the not-yet-meeting expectations and partially meeting expectations categories in both the language arts and mathematics subject areas of the State assessments is less than or equal to the sum of the Statewide percent of students scoring in the not-yet-meeting expectations and partially meeting expectations categories on the corresponding Statewide assessments.

["High-need field" means a subject area or field of expertise in which there is a shortage of qualified teachers in the State as determined by the Department of Education. The department shall reassess its designation of high-need fields at least every five years.]

“Program participant” means a tier 1 program participant, tier 2 program participant, or tier 3 program participant as defined pursuant to this section. A program participant shall be a certified teacher and resident of New Jersey.

"[Program] Tier 1 program participant" means an undergraduate or graduate 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, following the effective date of [this act] P.L.2021, c.384 (C.18A:71C-83 et seq.), is initially hired by a school district to work as a teacher in a high-need field in a low-performing school, and who has executed a contract with the authority for participation in the loan redemption program. [A program participant shall be a certified teacher and a resident of New Jersey.]

“Tier 2 program participant” means an undergraduate or graduate 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, following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), is initially hired by a school district to work as a teacher in a high-need field in a school other than a low-performing school, and who has executed a contract with the authority for participation in the loan redemption program.

“Tier 3 program participant” means an undergraduate or graduate 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, following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), is initially hired by a school district to work as a teacher and who does not meet the criteria to qualify as a tier 1 or tier 2 program participant, and who has executed a contract with the authority for participation in the loan redemption program.

(cf: P.L.2021, c.384, s.1)

2. Section 2 of P.L.2021, c.384 (C.18A:71C-84) is amended to read as follows:

2. a. There is established in the Higher Education Student Assistance Authority a loan redemption program for teachers [in high-need fields who are] employed in [low-performing] public schools. The 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 [in a high-need field] in a [low-performing] public school in New Jersey. The annual amount of State funds appropriated to the loan redemption program shall not exceed $1,000,000. The authority shall notify the Legislature when the funds have been fully expended or committed.

b. A program participant may redeem [his] the participant’s NJCLASS loan amounts upon execution of a contract between the program participant and the authority. The contract shall be for up to four one-year periods of service. The contract shall specify the total amount of debt, up to 100[%] percent, to be redeemed by the State in return for service pursuant to subsection d. of this section.

c. A program participant who has entered into a contract with the authority shall remain eligible for loan redemption under the contract in the event that:

(1) the public school in which the teacher is employed loses its designation as a low-performing school or the teacher is transferred to a school in the district that is not a low-performing school; or

(2) the high-need field in which the program participant is teaching pursuant to his service obligation subsequently loses its designation as a high-need field, and the program participant continues to teach in the same field in accordance with his contractual agreement with the authority.

d. (1) The redemption of loans under the loan redemption program for a tier 1 program participant shall amount to 25[%] percent of principal and interest of a tier 1 program participant's NJCLASS loan amounts, up to $5,000, in return for each consecutive full year of service. The total amount of NJCLASS loan amounts which may be redeemed under the program by a tier 1 program participant, for four full school years of service, shall not exceed $20,000.

(2) The redemption of loans under the loan redemption program for a tier 2 program participant shall amount to 20 percent of principal and interest of a tier 2 program participant’s NJCLASS loan amounts, up to $3,750, in return for each consecutive full year of service. The total amount of NJCLASS loan amounts which may be redeemed under the program by a tier 2 program participant, for four full school years of service, shall not exceed $15,000.

(3) The redemption of loans under the loan redemption program for a tier 3 program participant shall amount to 15 percent of principal and interest of a tier 3 program participant’s NJCLASS loan amounts, up to $2,500, in return for each consecutive full year of service. The total amount of NJCLASS loan amounts which may be redeemed under the program by a tier 3 program participant, for four full school years of service, shall not exceed $10,000.

(4) 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 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.

g. The authority shall advertise the availability of the program and engage in outreach activities with potential participants.

(cf: P.L.2021, c.384, s.2)

3. Section 3 of P.L.2021, c.384 (C.18A:71C-85) is amended to read as follows:

3. The authority shall annually submit a report on the program to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1). The report shall be submitted no later than July 1 of each year and shall include, but not be limited to, information on: the total number of program participants in each tier; the number of program participants in each tier entering the program in that year; a profile of the program participants, including demographic information, the school district in which the participant is employed and the school in which the participant teaches, and the institution of higher education from which the participant received a degree; the average annual loan redemption amount and the four-year average loan redemption amount of program participants; the number of applicants who were denied acceptance into the program, including the number who were denied due to a lack of program funding; the amount of the annual program appropriation that is applied to loan redemption payments for participants; the amount of the annual program appropriation that is used to compensate bondholders due to bond modification including, but not limited to, interest loss over the life of the loans; and the amount of the annual appropriation used to administer the program.

(cf: P.L.2021, c.384, s.3)

4. (New section) a. To assist in the designation of high-need fields every two years as required by section 1 of P.L.2021, c.384 (C.18A:71C-83), the Department of Education, in consultation with the Higher Education Student Assistance Authority, shall annually issue a survey to each school district to identify areas of vacancy and teacher shortage at both the school and district level. The survey shall be designed by the Commissioner of Education and shall include any questions the commissioner deems necessary to locate areas of vacancy and teacher shortage throughout the State.

b. The commissioner shall annually submit to the Governor and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1) an annual report of the survey findings no later than July 1 of each year. Findings shall include detailed results of the survey, and, if needed, specific recommendations to mitigate areas of vacancy and teacher shortages at both the school and district level.

5. This act shall take effect immediately and shall first apply to initial program applications submitted on or after the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill).

STATEMENT

This bill expands eligibility for the NJCLASS Teacher Loan Redemption Program.

Current law provides loan redemption for teachers employed in a high-need field in a low-performing school. The redemption of loans under the current program amounts to 25 percent of principal and interest, up to $5,000, for each consecutive full year of service, for a maximum loan redemption amount of $20,000 for four years of service. Under the current program, loans redemption may only be provided for NJCLASS loans issued to undergraduate student borrowers.

Under the bill, an eligible teacher employed in a high-need field in any public school may receive NJCLASS loan redemption equal to 20 percent of principal and interest, up to $3,750, for each consecutive full year of service, for a maximum loan redemption amount of $15,000 for four years of service. Additionally, an eligible teacher employed in any public school may receive NJCLASS loan redemption equal to 15 percent of principal and interest, up to $2,500, for each consecutive full year of service, for a maximum loan redemption amount of $10,000 for four years of service. Additionally, the bill permits an eligible teacher to receive loan redemption for NJCLASS loans issued to a student borrower for graduate study.

Additionally, the bill requires the Department of Education to annually issue a survey to each school district to identify vacancies and teacher shortages at the school and district levels.