Bill Text: NJ S4012 | 2018-2019 | Regular Session | Introduced
Bill Title: Prohibits Higher Education Student Assistance Authority from charging administrative fees under New Jersey College Loans to Assist State Student Loan Program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2019-06-24 - Introduced in the Senate, Referred to Senate Higher Education Committee [S4012 Detail]
Download: New_Jersey-2018-S4012-Introduced.html
Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
SYNOPSIS
Prohibits Higher Education Student Assistance Authority from charging administrative fees under New Jersey College Loans to Assist State Students Loan Program.
CURRENT VERSION OF TEXT
As introduced.
An Act prohibiting administrative fees under the New Jersey College Loans to Assist State Students Loan Program and amending N.J.S.18A:71C-28.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.18A:71C-28 is amended to read as follows:
18A:71C-28. a. The authority may limit the number of students who receive NJCLASS Loan Program loans for attendance at any educational institution with a default rate exceeding the standard which will be set by the authority.
b. The authority may place a limitation upon the number of NJCLASS Loan Program loans made pursuant to this article, if, in its judgment, a limitation is necessary to preserve the fiscal viability of the fund.
c. The authority [may] shall not establish and collect [a] from an eligible borrower under the NJCLASS Loan Program an administrative fee, [to be paid by each eligible borrower under the NJCLASS Loan Program] the purpose of which is to assist in the support of the administration of the NJCLASS Loan Program by the authority and to assist in covering the cost of loan defaults. The Legislature shall annually appropriate to the authority such funds as may be necessary to support the administration of the NJCLASS Loan Program and to cover the cost of loan defaults.
(cf: N.J.S.18A:71C-28)
2. This act shall take effect immediately and shall first apply to NJCLASS Loan Program loans originated from bond indentures closed after the date of enactment.
STATEMENT
Under current law, the Higher Education Student Assistance Authority (HESAA) is authorized to establish and collect certain fees from borrowers under the New Jersey College Loans to Assist State Students (NJCLASS) Loan Program. HESAA may charge fees to assist in the support of the administration of the NJCLASS Loan Program and to assist in covering the cost of loan defaults. In practice, HESAA has charged to each borrower under the NJCLASS Loan Program a loan administrative fee, which funds various origination, servicing, and collection activities. The administrative fee charged to a borrower is a percentage of the total NJCLASS Loan Program loan amount borrowed and is in addition to the principal amount borrowed.
This bill would prohibit HESAA from charging the administrative fees it currently collects, beginning with NJCLASS Loan Program loans originated from bond indentures closed after the date of enactment. The bill provides that the Legislature will appropriate funds to HESAA as may be necessary to support the administration of the NJCLASS Loan Program and to cover the cost of loan defaults.
