New Jersey’s student loan programs will face a hearing today regarding its collection practices towards debtors. This hearing has come to light over public complaints and reports of aggressive actions taken by state backed loaners and the HESAA (Higher Education Student Assistance Authority).
Both the chief administrator of New Jersey’s loan program and HESAA’s executive director – Gabrielle Charatte – are invited to the hearing. Additionally, students and advocates for protection rights are also expected to appear for comments related to the various collection practices. The hearing will take place at 1PM for a several hour period in Trenton.
These hearings are in response to investigative findings by the New York publication “ProPublica.” Much of what was discovered related to New Jersey loan programs collecting through almost any means. Because the loaners are backed by the state, they do not require court approval to collect. This has led to tactics such as wage garnishment and blocking a person’s state tax return. In some cases, they are able to pursue court action, suing graduates for unpaid loans while adding on their own court fees. These programs do not have flexible repayment options, such as income-driven returns or the like.
HESAA, who have claimed to help students during difficult periods, only did so when asked about certain repayment options. Even though the organization claims to help students who owe, if a debtor did not ask the right question, they would not be offered a certain type of aid. Despite this, HESAA has alleged that very few New Jersey students have complaints about their assistance.
Aside from hearings, several issues are expected to be brought up at the hearing.
One will scrutinize the internal communication of HESAA regarding what not to tell students. Emails were discovered informing employees to withhold information unless it was specifically asked for. This meant that students who could’ve been helped were ignorant to any form of assistance.
Another is to revise repayment for families of dead children. A mother is currently still responsible for paying back her deceased son’s NJCLASS loan, despite financial difficulty. No other state in the US has such strict repayment policies, reports found. Advocacy groups assert that families should not be responsible for repaying loans of deceased children.
Lastly, the handling of collections and pursuit of legal action will be examined. Last year, roughly 1600 law suits were filed against debtors, and those who could not pay had their loans sent to a collection agency. These agencies added their own legal fees on top of the total loan amount, making it much harder to pay them off.
Post hearing, lawmakers will decide whether or not the system needs revision. Post meeting, it is expected continued developments will occur later in the week. Whether or not additional meetings will be held has yet to be seen.
If changes do occur, potential financial relief could come to hundreds of families affected by New Jersey’s loan programs. This could also mean increased regulations for collections and revisions for state backed agencies.