Zwicker Bill Forgiving Student Loan Debt in Event of Borrower’s Death or Permanent Disability Signed into Law

(PRINCETON) – Legislation sponsored by Assemblyman Andrew Zwicker that will forgive certain student loan debt in the event of a borrower’s death or total permanent disability has been signed into law.

“To expect a student’s family or other survivors to pay their college loan debt in the event of their death is cruel and unacceptable. We can do better than that,” said Zwicker (D-Somerset/Mercer/Middlesex/Hunterdon).

The new law (S-743/A-2761) directs 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.

The law applies to loans issued 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 program offers low-cost rates on supplemental loans to New Jersey residents attending an eligible in-state or out-of-state school, as well as out-of-state students attending a school in New Jersey.

In the event of the death of an eligible student borrower under the NJCLASS Loan Program, the authority shall fully discharge the obligation of the student borrower and a parent or guardian who cosigned the loan. The executor or administrator of the student borrower’s estate shall provide written notification to the authority of the student borrower’s death and shall provide the authority with a certified copy of the death certificate within 120 days of the student’s borrower’s death.

In the event that an eligible student borrower becomes totally and permanently disabled, the authority shall fully discharge the obligation of the student borrower and a parent or guardian who cosigned the loan. To qualify for the loan discharge the student borrower shall provide the authority with a written statement from a physician, who is a doctor of medicine or osteopathy and is legally authorized to practice, certifying that the student borrower is totally and permanently disabled.

In the event that an eligible student borrower becomes temporarily totally disabled, the authority shall grant a deferment of payment of loan principal and interest. To qualify for the loan deferment, the student borrower shall provide the authority with a written statement from a physician, who is a doctor of medicine or osteopathy and is legally authorized to practice, certifying that the student borrower is temporarily totally disabled.

The deferment would begin on the date that the student borrower’s temporary total disability is certified to begin and shall end on the date that the temporary total disability is certified to end. Interest on the loan would not accrue during the period of deferment.