SOUTH ORANGE, NJ -- Acting Governor Sheila Oliver signed two measures into law on Tuesday to provide clear and comprehensive financial information to borrowers and protect the more than one million New Jersey students who are relying upon loans to cover the cost of a college education.
"The laws I signed today continue our Administration's ongoing commitment to making college more affordable and accessible," said Acting Governor Sheila Y. Oliver. "We have seen the negative impact that predatory lenders and misinformation can have on our students and these vital new consumer protection laws will help to protect and support them as they pursue post-secondary education.
"Students will be able to better understand the true cost of college, so they can make wise choices and determine the appropriate amount to borrow, and with strong standards and a new State watchdog, we will ensure they are treated fairly by the companies that service their loans. Governor Murphy and I proudly support these laws, which will help put New Jersey students in control when it comes to their education."
The first new law requires institutions of higher education to improve transparency of tuition and fees by providing a financial aid "shopping sheet" to prospective students. This college financing worksheet, or "shopping sheet," will provide clear information on costs, loan options, and estimated debt levels, so students and their families can better understand the net price of attending college and can more easily compare financial aid package offers from institutions across New Jersey.
This new requirement will take effect for the 2019-2020 academic year.
"Given the rising cost of a degree and the mounting student debt crisis, it is crucial students understand the costs they will incur and the likelihood they will be able to repay their student loans," said Mercer County Senator Shirley Turner. "Providing students with a comprehensive breakdown prior to choosing where to attend school will allow them to make a more informed decision that takes into account their long-term financial health."
Under the other new law, student loan servicing companies must be licensed by the New Jersey Department of Banking and Insurance (DOBI). The Department will crack down on deceptive practices by servicers that provide flawed information to student borrowers, apply payments in ways that cause unnecessary late fees and harm borrowers' credit scores, or fail to place them in repayment plans that are best designed to assist in paying off their loans.
New Jersey Student Loan Ombudsman also will be created within DOBI to help borrowers with complaints or unanswered questions about student loans and monitor and review complaints about student loan servicers operating in our state. The core functions of the Office will be to mediate grievances, address concerns, provide education about the student loan process, and monitor implementation of student loan policies.
Further, the law establishes regulations on student loan providers and ensure that all providers are properly licensed to provide protection and transparency for college students and their families. This law will take effect in approximately four months.
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