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New Jersey college loan Program will no longer Require Repayment of Student loans in the event of a student’s death

RHS Grad

HESAA Loan Program revises its rules to benefit grieving families.

February 1,2017

the staff of the Ridgewood blog

UPPER MONTCLAIR NJ , A student loan program that had placed parents of deceased students in an unthinkable situation has now been changed. The Higher Education Student Assistance Authority (HESAA) program previously required parents of a deceased child to continue to pay their NJ CLASS / HESAA loans as a co-signer. However, New Jersey legislators have recently amended the program’s terms and conditions.
John Crosby, CFP®, ChFC, CAS, CLTC, CRPC®, and Advocacy Chairperson for FPANJ, was thrilled at the change in the loan program.
“This change came a result of all the advocates fighting for the same Terms and Conditions available for Federal Student loans in the event of death or disability of the borrower or co-borrower. We are grateful for everyone who testified on behalf of families who were devastated by the impacts of the HESAA rules.”
 An article in the New York Times that detailed one family’s nightmare in dealing with their son’s death and his student loans through HESAA finally spurred discussion among New Jersey State Senators. In August 2016, Crosby had spoken to several of the legislators and those that officially testified to explain the process of borrowing, the liabilities of the co-signer vs. co-borrower and their un-forgivable legal obligations. Some had called the program “predatory” and “loansharking,” and testimony led to a unanimous vote by the Higher Education Committee to approve S-743, requiring HESAA to forgive the student loan of someone who dies before completely repaying it.
Crosby has counseled clients in similarly tough situations with HESAA. The program also had been characterized with extraordinarily stringent rules that can easily led to financial hardship. Loan repayments could not be adjusted based on income, and few breaks are given for unemployment or other hardship.
A memo from HESAA Executive Director Gabrielle Charette provides further details on all of the changes that are being made in the program.
“This is truly the power of advocacy for the greater good,” Crosby said. “FPANJ continues to act as a resource in educating legislators on topics like these. Now we are just happy that parents in this situation can start to move forward in healing.”