Bill Text: NJ A601 | 2020-2021 | Regular Session | Introduced
Bill Title: Requires Higher Education Student Assistance Authority to provide information on life insurance plans to borrowers of student loans and requires authority to contract with life insurance company to offer policies to borrowers.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Introduced - Dead) 2020-01-14 - Introduced, Referred to Assembly Higher Education Committee [A601 Detail]
Download: New_Jersey-2020-A601-Introduced.html
STATE OF NEW JERSEY
219th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2020 SESSION
Sponsored by:
Assemblyman JOHN DIMAIO
District 23 (Hunterdon, Somerset and Warren)
Co-Sponsored by:
Assemblywomen Gove, B.DeCroce and Assemblyman Peterson
SYNOPSIS
Requires Higher Education Student Assistance Authority to provide information on life insurance plans to borrowers of student loans and requires authority to contract with life insurance company to offer policies to borrowers.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning student loan debt and amending and supplementing P.L.2013, c.1.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1 of P.L.2013, c.1 (C.18A:71A-35) is amended to read as follows:
1. a. The Higher Education Student Assistance Authority shall develop a student loan repayment information document. The document shall include, but need not be limited to: examples of monthly and annual loan payments required for State, federal, and private student loans, whether subsidized or unsubsidized, based on various principal loan amounts and current interest rates; information on the time period it would take to fully repay those loans based on various loan repayment schedules; definitions of fixed rate loans, variable rate loans, and consolidation loans; [and] information on the consequences and penalties of defaulting on a student loan ; and information on life insurance plans available to borrowers and cosigners of student loans as a mechanism for the payment of student loan debt in the event of a borrower's death.
The authority shall: post the document on its website; transmit the document via electronic mail to each school district that includes grades 9 through 12 and nonpublic high schools by October 1 of each school year; and update the document as appropriate, but no less frequently than every five years.
b. A school district and a nonpublic high school shall annually disseminate the document developed pursuant to subsection a. of this section to each student in the 11th and 12th grades.
(cf: P.L.2013, c.1, s.1)
2. (New section) The Higher Education Student Assistance Authority shall, in consultation with the Department of Banking and Insurance, contract with one or more life insurance companies to offer life insurance policies to borrowers and cosigners of student loans as a mechanism for the payment of student loan debt in the event of a borrower's death. Nothing herein shall be construed to require a borrower or cosigner of a student loan to purchase a life insurance policy.
3. Section 1 of this act
shall take effect immediately and section 2 shall take effect on the 180th day
after the date of enactment.
STATEMENT
Current law requires the Higher Education Student Assistance Authority to develop a student loan repayment information document. The document includes: examples of monthly and annual loan payments required for State, federal, and private student loans, based on various principal loan amounts and current interest rates; information on the time period it would take to fully repay those loans based on various loan repayment schedules; definitions of fixed rate loans, variable rate loans, and consolidation loans; and information on the consequences and penalties of defaulting on a student loan. This bill requires the document to also include information on life insurance plans available to borrowers and cosigners of student loans as a mechanism for the payment of student loan debt in the event of a borrower's death. A life insurance policy would help to financially protect a parent, or other person, who may cosign for a student's loan in the event of the student's death.
The bill also directs the Higher Education Student Assistance Authority, in consultation with the Department of Banking and Insurance, to contract with one or more life insurance companies to offer life insurance policies to borrowers and cosigners of student loans as a mechanism for the payment of student loan debt in the event of a borrower's death.
