New Jersey’s Student Loan Program Is Unlike Any Other in the Nation

After her son died, a mother was forgiven of his federal student loan debt, but a New Jersey state agency, which had also loaned her son money, informed her that she did not meet the threshold for loan forgiveness. New Jersey’s loans are unlike any other student loan program in the country, maintaining strict rules and giving few breaks on repayments.

One reason for such stringent rules is that New Jersey depends on Wall Street investors to finance the loans, so losses need to be kept to a minimum. New Jersey’s program, however, is one of the largest in the country with an outstanding student loan debt of $2 billion. As borrowers are continually unable to repay their loans, they have been forced to file for bankruptcy in order to get more reasonable repayment terms. The Article details many extreme stories on how the New Jersey Higher Education Student Assistance Authority is ruining borrower’s lives.

See Annie Waldman, In New Jersey Student Loan Program, Even Death May Not Bring a Reprieve, NY Times, July 3, 2016.

Special thanks to Lewis Saret (Attorney, Washington, DC) for bringing this article to my attention.