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TRENTON, NJ—Student debt has been a hot topic at the State Legislature of late, with several bills for reform being introduced and discussed in committees, and moving forward towards their adoption.
Bill S-591 would require colleges and universities to provide information packages, or "financial aid shopping sheets," that help potential students understand the gravity of the debt they might be taking on.
The sheets would give prospective students "certain cost, loan, and debt information," according to the bill.
NJ State Senator Sandra Cunningham, who represents Jersey City, said students and parents should be well-informed of how much education is going to cost them.
“Parents may not have gone to college so they might not know what they’re paying for and what is available,” she said.
“For example, if a kid is accepted to Rutgers, they should be able to see just how much this education is going to cost in terms of what the fees are for, what loans are available, and potential programs like EOF [Education Opportunity Fund].”
Cunningham also said that providing information about a school's graduation rate is important for students in their decision-making process.
“Parents and students also need to look at graduation rates and that’s not being done now,” she said.
On October 21, S-591 was passed unanimously by the Senate. It still needs approval of the Assembly Higher Education Committee, the full NJ Assembly, and the state's Governor before it becomes law.
Cunningham was a primary sponsor for the bill and said that requiring institutions of higher education to provide to prospective students with financial aid shopping sheets is something the federal government advises schools to do.
“For the past year Senator Stephen Sweeney and I have been traveling the state of NJ visiting colleges and having round table discussion with students about issues that affect them to give us an overview of what’s going on,” she said.
Bill S591 will require colleges to present graduation rates and other statistics that could present them in a poor light.
“I think colleges already do something similar to this so I don’t think it will make them look unfair,” Cunningham said. “You can talk about the good things, but you need to talk about the bad things in the spirit of transparency.”
Other bills working their way through the legislature, like S-743, were aslo introduced to help address issues surrounding student debt.
ProPublica and The New York Times recently worked together on an article detailing horror stories where the state government's Higher Education Student Assistance Authority (HESAA) refused to forgive loans, even in the event of a borrower's death.
“In the summer we had a hearing and we listened to horrendous stories from parents about paying loans back. How are you supposed to pay back your loans getting $12,000 a year in an entry-level position?” Cunningham said.
“We’re setting young kids up for failure,” she added. “We had one young man say he was seriously considering suicide at 22 years old.”
According to Cunningham there has been a lot of insensitivity from HESAA.
“The Senate Higher Education Committee and Senate Legislative Oversight Committee tried to set up a meeting with them in August and they didn’t show up,” she said. “We had a lot of parents and students come out and they decided not to come so we have to move on and do something about these issues.”
Allowing "income-based repayment" of student loans is another reform that NJ legislators are considering, according to Cunningham.
“Some of the bills we introduced will be going through senate floor soon and hopefully the governor sees fit to sign them,” she said. “We were at Middlesex Community College… and some kids were saying they were afraid to continue with their final two years because of the debt. They’re going to need those two years.”
Americans owe nearly $1.3 trillion in student loan debt, and that number is up 6% from 2015, according to Student Loan Hero.
“It’s more of a call to action now because student debt on a national level has become one of the most serious issues in our country,” Cunningham said. “President Barack Obama talked about it and Secretary Hillary Clinton talked about it in terms of free education. Debt has been swallowing us up.”
Cunningham said there has also been a lot of advocacy from students as well as New Brunswick's Congressman Frank Pallone Jr.
At the federal level, Pallone introduced the Student Borrower Higher Education Lending Protection (HELP) Act to protect student borrowers and co-signers from egregious debt collection practices.
The legislation requires total loan forgiveness for any student borrower who has a permanent disability or any family member who is a co-signer of a loan taken out by a student borrower who dies.
HELP also allows for deferment of loan payments without financial penalty for borrowers with a temporary disability and requires private lenders to explicitly disclose the default rates in their student loan portfolio.
“To succeed in the 21st century economy young Americans needs to have access to higher education,” Pallone said in a recent press release.
“However, too many New Jersey families face daunting student loan bills and financial institutions are unwilling to provide flexibility for those facing hardships. The least we can do is protect those families that are put in extraordinarily difficult situations and protect them from harassment from debt collectors.”
Cunningham said that there will be more bills proposed at the state level regarding education affordability in the near future.
“We will be releasing bills that the affordability commission has come up with that will include ideas from students,” she said. “I’m sure some bills will be coming out in December. We have some of the best colleges in NJ and we want students to be proud to go to school here.”