The federal government found waste, fraud and abuse in many state-run student loan programs
After sending condolences on the loss of your child or the illness or accident that resulted in your permanent disability, the New Jersey Higher Education Student Assistance Authority starts sending bills and collection notices, soon followed by lawsuits.
When several cash-strapped families who’d lost students or young graduates turned to the Legislature for help, 15 Assembly Members and Senators signed onto bills that would offer relief. Eventually those bills were combined into a simple two-pager that said if a student borrower died before the loans were fully paid, the debt would be written off. It also said if a student borrower were to become so permanently disabled that he or she would be unable to work, that loan was discharged, too. And if the disability was temporary, repayment could be deferred until the person was able to get a job once again.
However, the bill received little notice because of the many high-profile issues the Legislature’s been working on. It’s slowly crawling its way to the Governor’s desk. No one can be sure what Christie will do.
In 2007 when the federal government found waste, fraud and abuse in many state-run student loan programs, including New Jersey’s, they decided to phase out the federal involvement. Some states ended their loan programs and let students work directly with banks. Other states contracted to administer loans from the federal government…