The New Jersey State Legislature has recently introduced several new bills that call for student loan reforms. The most recent bill to pass through the state Senate is Bill S-591, which would require colleges to provide students information about how much their education will cost, what loans are available to them, and what the graduation rates are for schools they are considering.
State Senator Sandra Cunningham was one of the main sponsors for the bill. She spent the previous year traveling to different colleges in New Jersey and having discussions with students, hoping to gain insight into issues that affect them.
Cunningham stressed that both students and parents should be informed as to how much the colleges they are considering are going to cost but also the graduation rates of those schools. She stated that it is important for colleges to present all the information, even information that may paint them in a poor light, so students and their parents can make the most informed decision.
Bill S-591 passed through the Senate unanimously but it still has a few more hurdles to pass through before it becomes law. Other bills that passed through the legislature look at issues addressing student loan debt.
One bill that also passed unanimously through the State Senate would require the New Jersey state agency Higher Education Student Assistance Authority (HESAA) to forgive loans in the event that the borrower dies or is disabled.
Cunningham recounted the previous summer when she sat through a hearing and listened to parents telling terrible stories about having to pay student loans back and even hearing one student admit that he considered suicide at just 22-years-old. She said that HESAA did not attend this meeting. Cunningham foresees more bills being proposed at the state level that will be aimed at making higher education more affordable.
Student loan debt has risen to $1.4 trillion and has become a hot topic for politicians; both presidential candidates and the Obama administration have spoken out in concern for the growing student loan crisis. Cunningham stated she felt that the current education environment is setting students up for failure.
New Jersey U.S. Representative Frank Pallone, Jr. has introduced the Student Borrower Higher Education Lending Protection (HELP) Act. This bill aims to protect both borrowers and cosigners from aggressive debt collection tactics.
HELP requires loan forgiveness for any borrowers who become permanently disabled or dies. It also allows for loan payments to be deferred without penalty for borrowers with a temporary disability and it requires banks that give student loans to disclose default rates in their student loan portfolio.
In a recent press release, Pallone stated that while college is necessary for success in the current job market, too many families face hardships both from burdensome loans and from financial institutions employing aggressive tactics and demonstrating an unwillingness to be flexible on the repayment of these loans.