TRENTON – The Assembly Higher Education Committee Legislation approved Democrat-sponsored legislation that would forgive certain student loan debt in the event of the borrower’s death on Thursday.
The New Jersey College Loans to Assist State Students Loan Program is a supplemental student loan program administered by the Higher Education Student Assistance Authority. The loans may be used by undergraduate and graduate students to pay for school-related expenses including tuition and fees, books, supplies, and room and board. Under the program, if a student borrower dies while the loan is still in repayment, the co-signer will assume responsibility for the debt’s repayment.
The bill (A-748) would allow the authority to clear the student borrower and any individual who cosigned the loan from having to repay the loan, in the event of the borrower’s death.
“Most student loans are co-signed by parents. Saddling a parent with repayment of a loan they helped get for a child they are now mourning seems unnecessary,” said Assemblyman Peter J. Barnes, III (D-Middlesex). “Federal student loans are generally discharged in the event of the borrower’s death. This bill would put us in line with what the federal government is already doing.”
Under the bill, the executor or administrator of the borrower’s estate must provide written notification of the borrower’s death to the authority, as well as a certified copy of the death certificate within 120 days of the borrower’s death. The bill would take effect immediately.
The death of a student borrower can have serious financial consequences for a family.
Rutgers University student Christopher Bryski of Marlton died in 2006 from a traumatic brain injury. His family had to make payments on his remaining $50,000 student loan from Key Bank, after Bryski’s father, who cosigned the loan, was required to pay it off. The remaining balance was forgiven this year following political pressure and an online petition calling on Key Bank to forgive the loan.
The bill will now go to the Assembly Appropriations Committee for further consideration.