Gov. Phil Murphy signed into law a measure designed to assist students in repaying loans.
The law (Senate Bill 765) states that if an NJ CLASS loan is in default and the borrower has entered into a repayment plan, the Higher Education Student Assistance Authority may not notify a New Jersey state department that could withhold income tax refunds and homestead benefit payments.
Sen. Tom Kean Jr., R-21st District, sponsored the legislation.
“The NJ CLASS loan program was designed to aid students who need financial assistance beyond what the federal loan program has provided,” Kean said. “Students who are having trouble repaying these loans shouldn’t be punished with overly-aggressive collection practices, especially if they are making efforts to get their loans back in good standing.”
The law provides that a borrower’s delinquent or default status on an NJ CLASS loan may not be used as the basis for the denial, suspension, or revocation of the borrower’s professional or occupational license, certification or registration. The law prohibits HESAA from notifying a department that could withhold a borrower’s lottery winnings if the borrow has already entered into a repayment plan.