A3750

An Act establishing the New Jersey County College Remissible Student Loan Program, supplementing chapter 71C of Title 18A of the New Jersey Statutes, and making an appropriation.

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

1. As used in this act:

“Approved educational fees” means general education fees, registration fees, facility fees, technology fees, laboratory fees, student service and activity fees, and program and course fees, subject to the limit of funds appropriated or otherwise made available for the program.

“Authority” means the Higher Education Student Assistance Authority.

“Program” means the New Jersey County College Remissible Student Loan Program.

2. a. There is established within the Higher Education Student Assistance Authority a New Jersey County College Remissible Student Loan Program. Under the program, the authority shall make loans available to eligible students to cover a portion of the remaining cost of tuition, approved educational fees, and textbooks not covered by grants or scholarships. The authority shall completely forgive a loan provided under the program if the eligible student completes an associate degree program in three academic years or less.

b. A loan may be made to an individual who is an eligible borrower pursuant to section 3 of this act and who submits an application to the authority in a manner and form prescribed by the authority. Upon approval of an application, the authority shall provide a loan to the applicant. Within the limits of funds available through the “New Jersey County College Remissible Student Loan Program Fund” established pursuant to section 8 of this act, the authority shall set maximum loan amounts for each participant based on factors including, but not limited to, cost of attendance, family income, value of family assets, or other factors the authority may consider relevant. The loans may be secured by an endorsement, co-maker's collateral, or other security as may be required by rules and regulations established by the authority. When considering an application, the authority shall use appropriate documents to verify the financial information provided by an eligible borrower or cosigner. The documents that the authority may use to verify the financial information may include, but shall not be limited to, certification by the applicants, recent federal income tax returns, current pay stubs, and current bank statements.

c. A loan provided under the program shall not exceed an eligible student’s cost of tuition, approved educational fees, and textbooks.

d. Interest on each loan dispersed under the program shall accrue from the date of the making of the loan; however, the payment of the principal, the interest, or both may be deferred until a time determined by the authority. The rate of interest on each loan shall be determined by the authority.

3. An eligible borrower under the program shall be an eligible student or any parent or legal guardian providing financial support for a dependent eligible student. An eligible student under the program shall:

a. be a United States citizen, national or legal resident of the United States or be in the United States for other than temporary purposes and intend to become a permanent resident;

b. be a resident of the State;

c. be enrolled at least on a part-time basis in a county college established pursuant to chapter 64A of Title 18A of the New Jersey Statutes; and

d. have applied for all other available forms of State, federal, and institutional need-based grants and merit scholarships and, in accordance with annually established deadline dates, have completed and submitted a Free Application for Federal Student Aid, other financial aid form, or, as applicable, a State financial aid form as required by the authority pursuant to subsection b. of section 1 of P.L.2018, c.12 (C.18A:71B-2.1).

4. An eligible borrower who obtains a loan under the program and completes an associate degree program in three academic years or less shall be eligible for complete forgiveness of the loan. Loan redemption under the program shall equal the cumulative outstanding balance of loans issued under the program. Interest paid or due on the loans shall be considered eligible for reimbursement under the program.

5. a. In the event of the death of an eligible student borrower under the program, the authority shall fully discharge the obligation of the student borrower and a parent or guardian who cosigned the loan.

b. 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 borrower's death.

6. a. In the event that an eligible student borrower under the program 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.

b. As used in this section, "totally and permanently disabled" means the condition of a student borrower who is unable to work and earn money or attend school because of an injury or illness that is expected to continue indefinitely or result in death. A student borrower shall be considered totally and permanently disabled even if the student borrower continues to receive an equal or greater amount of income from the source of income that was used to meet the minimum income requirements at the time the loan was approved.

7. a. In the event that an eligible student borrower under the program 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. The deferment shall begin on the date that the student borrower's temporary total disability is certified to begin and shall end on the date that the eligible student's temporary total disability is certified to end. Interest on the loan shall not accrue during the period of deferment.

b. As used in this section, "temporary total disability" means that the student borrower is unable to work and earn money or attend school during the period needed to recover from the injury or illness. A student borrower shall be considered temporarily totally disabled even if the student borrower continues to receive an equal or greater amount of income from the source of income that was used to meet the minimum income requirements at the time the loan was approved.

8. a. (1) The authority shall establish and maintain a special non-lapsing revolving fund called the “New Jersey County College Remissible Student Loan Program Fund" in which there shall be deposited:

(a) all moneys appropriated for the purpose of the fund;

(b) all funds contributed to the authority by private sources, to be used for the purposes of the fund;

(d) any return on investment of moneys deposited in the fund; and

(e) any other moneys or funds of the authority that may be available for the purposes of the fund.

(2) Moneys in the New Jersey County College Remissible Student Loan Program Fund shall be held and applied to make loans pursuant to this act and to pay for the costs of administering the program.

b. The sum total of all funds on deposit in the New Jersey County College Remissible Student Loan Program Loan Fund shall be maintained in the amount determined by the authority to be necessary to fulfill its responsibilities as set forth in this act.

c. Moneys in the New Jersey County College Remissible Student Loan Program Loan Fund at any time in excess of the program requirements, whether by reason of investment or otherwise, may be withdrawn at any time by the authority and transferred to any other fund or account of the authority.

9. The Higher Education Student Assistance Authority shall promulgate regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to effectuate the provisions of this act.

10. There is appropriated from the General Fund to the Higher Education Student Assistance Authority, for deposit in the New Jersey County College Remissible Student Loan Program Fund established pursuant to section 8 of this act, the sum of $1,000,000 to effectuate the purposes of the New Jersey County College Remissible Student Loan Program established pursuant to section 2 of this act.

11. This act shall take effect on the first day of the seventh month next following the date of enactment.

STATEMENT

This bill establishes the New Jersey County College Remissible Student Loan Program.

Under the program, the Higher Education Student Assistance Authority is to make loans available to eligible students to cover a portion of the remaining cost of tuition, approved educational fees, and textbooks not covered by grants or scholarships. The program is to provide loan redemption to eligible students who complete an associate degree program in three academic years or less.

To be eligible to apply for a loan under the program, a borrower is required to: (1) be a United States citizen, national or legal resident of the United States or be in the United States for other than temporary purposes and intend to become a permanent resident; (2) be a resident of the State; (3) be enrolled at least on a part-time basis in a county college; and (4) have applied for all other available forms of State, federal, and institutional need-based grants and merit scholarships and, in accordance with annually established deadline dates, have completed and submitted a Free Application for Federal Student Aid, other financial aid form, or, as applicable, a State financial aid form as required by the authority pursuant to current law.

The bill provides for the discharge of loans issued under the program in the event of the death of an eligible student borrower or if the student borrower becomes totally and permanently disabled. The bill also requires the authority to grant a deferment of payment of loan principal and interest in the event that a student borrower becomes temporarily disabled.

The bill establishes the “New Jersey County College Remissible Student Loan Program Fund” in which the following funds are to be deposited: (1) all moneys appropriated for the purpose of the fund; (2) all funds contributed to the authority by private sources, to be used for the purposes of the fund; (3) all moneys repaid to the fund by eligible borrowers; (4) any return on investment of moneys deposited in the fund; and (5) any other moneys or funds of the authority that may be available for the purposes of the fund. Moneys in the New Jersey County College Remissible Student Loan Program Fund are to be held and applied to make loans under the program and to pay for the costs of administering the program.

Finally, the bill stipulates that loan redemption under the program is to equal the cumulative outstanding balance of loans issued under the program. Interest paid or due on the loans is to be considered eligible for reimbursement under the program.