Assembly Approves Houghtaling, Downey Bill to Forgive Student Loan Debt in Event of Borrower's Death or Permanent Disability

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The New Jersey General Assembly this week approved legislation sponsored by Assembly Members Eric Houghtaling and Joann Downey that would forgive certain student loan debt in the event of a borrower’s death or total permanent disability.

“This bill rights a serious wrong within our state’s student loan system, and will provide relief for grieving families,” said Downey (D-Monmouth), “It it a tragedy when someone’s life is cut short before they are able to put their education to use, and we need to respond to that with compassion.”

“There is absolutely no need for suffering families to be hounded by loan collectors,” said Houghtaling (D-Monmouth), “Federal student loan debt is already forgiven in the event of a borrower’s death, which is why it is common sense to follow suit at the state level.”

The bill (A-2761) would direct the state Higher Education Student Assistance Authority to forgive certain student loans in the event of a student borrower’s death or total and permanent disability, and grant deferment for temporary total disability. Though such situations are rare, they can leave grieving families with tens of thousands of dollars in debt, and legislators have promoted the idea that it is common sense compassion to have the State forgive those debts.

The bill applies to loans issues under the NJCLASS program - New Jersey College Loans to Assist State Students - which helps cover college costs not already covered by other sources of grants, scholarships, and loans.

The bill was approved by a vote of 66-0-7 and now awaits final legislative approval from the Senate.

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