Student Debt Forgiveness Signed Into Law in N.J.

By JT Aregood • 12/05/16


Governor Chris Christie signed a bill into law Monday offering student loan forgiveness at the state level in cases of death and disability.


Student debt reform has come to New Jersey. Governor Chris Christie signed a bill into law Monday that would eliminate student debt in the event of death and total disability, and allow for deferment of payments and interest accumulation for lenders who are temporarily disabled.

The change comes after a ProPublica investigation detailing the case of one mother who was forced by law to continue paying off her son’s state student loans after his murder.

That investigation brought New Jersey’s punitive lending practices to light, and 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 onerous debt after a tragedy.

State Assemblyman Vince Mazzeo, primary sponsor, laid out the scale of the savings to bereaved parents in a 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 payments to be adjusted by income and charges higher interest rates than similar federal programs. The state can also take extraordinary steps like garnishing wages and revoking professional licenses without court approval.

The Office of Legislative Services estimates that the legislation could cost the state close to $1.5 million annually over the next three years.

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