Last month, the Governor of New Jersey signed a law that will limit the amount of money that a college student can borrow from the state’s student loan program. The law comes after allegations that the state was utilizing predatory lending practices. Among the new law’s rules: college students in New Jersey will be allowed to borrow a maximum of $150,000, and only after exhausting all federal student loan options first.
Student Loan debt is a huge issue in the US with other law makers working to help curb sky rocketing debt as a result from attending a college or university as well. The attorney general in Illinois, for example, is in the news this week urging the governor of Illinois to sign a bill that would reform the student loan industry to help student loan borrowers repay their loans. All these measures come after the Student Loan forgiveness programs which was enacted by the Obama administration and allows individuals in various public service and educational roles the ability to have their student loan debt completely forgiven. All these measures seek to find a solution to the $1.4 trillion in student loan debt among some 44 million borrowers in the United States.
The New Jersey Higher Education Assistance Authority’s (HESAA) new law is New Jersey’s answer to trying to tackle the student loan debt crisis in its state. While it’s unclear if this new law limiting student loans will help prevent defaults on student loans, it is hoped that this step from HESAA will be a “responsible reform and targeted measure to educate incoming college students on managing loan debt”. The idea behind the law is that loans will not be granted to students who would otherwise not be able to manage the debt over the long-term and to provide reasonable repayment agreements so less students declare bankruptcy in order to relieve debt.