Senate President Steve Sweeney today called for a grace period on student loan payments to help protect loan holders and recent college graduates from financial hardship during the coronavirus pandemic. Senator Sweeney said that the New Jersey Higher Education Student Assistance Authority should cancel student loan debt payments during the State of Emergency.
“Student debt is already a burden for current and former students and the economic disruption from the coronavirus crisis threatens to cause them financial peril,” said Senator Sweeney (D-Gloucester/Salem/Cumberland). “It’s too much for them to afford and too much for them to worry about at a time when the economy could cause severe hardship. It’s in the best interest of everyone to grant a payment suspension.”
Senator Sweeney wrote to David Socolow, the Executive Director of HESAA, asking for action to be taken at the state level. Earlier today, President Trump announced a suspension of payments for federal student loan programs for the next six months.
American adults owe a collective $1.5 trillion in student loans, allowing disruption to such a significant part of the country’s financing sector would add to the economic turmoil associated with the COVID-19 pandemic, Senator Sweeney said.
“We will be experiencing severe economic fallout in the months ahead,” said Senator Sweeney. “We have to take whatever proactive steps we can to avert or minimize the consequences.”
Since 1991, HESAA has offered NJCLASS loans, funded through tax-exempt bonds. These loans are typically family loans taken out with a parent and nearly 40% of the borrowers of NJCLASS loans each year have incomes between $40,000 and $80,000. There are currently about 130,000 outstanding NJCLASS loans, totaling over $1.767 billion.HESAA Letter