Bill Text: NJ A5304 | 2020-2021 | Regular Session | Introduced
Bill Title: Permits cosigners to student loans under New Jersey College Loans to Assist State Students (NJCLASS) Loan Program to make payments on loans; allows gross income tax deduction for certain payments under NJCLASS Loan Program.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2021-01-27 - Introduced, Referred to Assembly Higher Education Committee [A5304 Detail]
Download: New_Jersey-2020-A5304-Introduced.html
Sponsored by:
Assemblyman GARY S. SCHAER
District 36 (Bergen and Passaic)
Assemblyman DANIEL R. BENSON
District 14 (Mercer and Middlesex)
SYNOPSIS
Permits cosigners to student loans under New Jersey College Loans to Assist State Students (NJCLASS) Loan Program to make payments on loans; allows gross income tax deduction for certain payments under NJCLASS Loan Program.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the New Jersey College Loans to Assist State Students Loan Program and supplementing Title 18A and Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Notwithstanding the provisions of any law, rule, or regulation to the contrary, the Higher Education Student Assistance Authority shall permit a cosigner to a student loan in repayment status under the New Jersey College Loans to Assist State Students Loan Program to make payments on the loan in amounts to be determined by the cosigner. Payments made by a cosigner pursuant to this subsection shall be made voluntarily and in addition to any other amounts paid by the borrower of the loan.
b. The executive director of the authority, in consultation with the Director of the Division of Taxation, shall promulgate procedures and forms by which cosigners may certify payments made pursuant to this section and determine eligibility for a tax deduction pursuant to section 2 of P.L. , c. (C. )(pending before the Legislature as this bill).
2. a. (1) A taxpayer with gross income of $80,000 or less shall be allowed to deduct from gross income an amount equal to the amount of the taxpayer's payments made during the taxable year pursuant to subsection a. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).
(2) A taxpayer with gross income of more than $80,000 shall be allowed to deduct from gross income an amount equal to 50 percent of the amount of the taxpayer's payments made during the taxable year pursuant to subsection a. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. (1) A taxpayer with gross income of $80,000 or less, who is the borrower of a student loan under the New Jersey College Loans to Assist State Students Loan Program established pursuant to N.J.S.18A:71C-21, shall be allowed to deduct from gross income an amount equal to the interest that the taxpayer paid on the student loan during the taxable year.
(2) A taxpayer with gross income of more than $80,000, who is the borrower of a student loan under the New Jersey College Loans to Assist State Students Loan Program established pursuant to N.J.S.18A:71C-21, shall be allowed to deduct from gross income an amount equal to 50 percent of the interest that the taxpayer paid on the student loan during the taxable year.
3. The Executive Director of the Higher Education Student Assistance Authority shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt any rules and regulations as the executive director deems necessary to carry out the provisions of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill). The Director of the Division of Taxation in the Department of the Treasury shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt any rules and regulations as the director deems necessary to implement section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
4. This act shall take effect immediately and shall apply to taxable years beginning on or after January 1 next following the date of enactment.
STATEMENT
This bill provides tax relief to cosigners and borrowers of student loans under the New Jersey College Loans to Assist State Students (NJCLASS) Loan Program.
Specifically, under the bill, the Higher Education Student Assistance Authority (HESAA) is required to permit a cosigner to a student loan in repayment status under the NJCLASS Loan Program to make payments on the loan in amounts to be determined by the cosigner. Payments made by a cosigner would be made voluntarily and in addition to any other amounts paid by the borrower of the loan.
A cosigner making voluntary payments authorized under the bill would be eligible for a tax deduction. A taxpayer with gross income of $80,000 or less would be allowed to deduct an amount equal to the full amount of the taxpayer's payments on the NJCLASS loan. A taxpayer with gross income of more than $80,000 would be allowed to deduct an amount equal to 50 percent of the payments.
In addition, the bill would allow a taxpayer with gross income of $80,000 or less, who is the borrower of a student loan under the NJCLASS Loan Program, to deduct from gross income an amount equal to the interest paid on the student loan during the taxable year. A taxpayer with gross income of more than $80,000 would be allowed to deduct an amount equal to 50 percent of the interest paid on the student loan during the taxable year.
