Governor Chris Christie signed a bill into law this week that will eliminate student loan debt in the event of death and total disability, and allow for deferment of payments and interest accumulation for those who are temporarily disabled.
The change comes after an investigation into the case of a mother who was forced to continue paying her son’s student loans after his senseless murder. It brought to light New Jersey’s punitive lending practices. The bill’s sponsors in the lower house called its success a victory for students and parental co-signers who could have been left with insurmountable debt after a tragedy.
The primary sponsor of the bill, State Assemblyman Vince Mazzeo, made the following statement:
“Imagine you’re a family who always pays their bills, has good credit and then you lose a child and in the midst of your grief, you’re saddled with tens, if not hundreds, of thousands of dollars in their remaining student loan debt,” Mazzeo wrote. “That’s just something we can’t allow to happen on our watch.”
Fellow sponsor Andrew Zwicker also praised the change.
“To expect a student’s family or other survivors to pay their college loan debt in the event of their death is cruel and unacceptable. We can do better than that,” Zwicker wrote.
New Jersey’s Higher Education Student Assistance Authority (HESAA) will now be obligated to forgive those debts. In cases of permanent or temporary disability, borrowers will have to provide a written statement from their physician attesting to their condition.
Unlike other states, New Jersey does not allow for payments to be adjusted by income and charges higher interest rates than similar federal programs. The state can also garnish a borrower’s wages for non-payment and revoke professional licenses without court approval.
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