A ProPublica and New York Times investigation has prompted a state Senate hearing on aggressive collection practices by the state loan program.
The New Jersey State Senate has announced it will hold a hearing to examine the state’s student loan agency, which administers the largest state-based loan program in the country and one that employs aggressive and unforgiving collection practices.
A ProPublica and New York Times investigation has shown that New Jersey’s loan program charges higher interest rates than similar federal programs, and that its officials, armed with the power of the state, have garnished wages, rescinded tax refunds, and even sought repayment from families whose children have died. The state’s student loans now total $1.9 billion.
The hearing, set for Aug. 8, will be led by New Jersey state Sen. Robert Gordon, chairman of the Legislative Oversight Committee, and New Jersey state Sen. Sandra Cunningham, chairwoman of the Higher Education Committee.
“We need to be sure we are properly advising prospective borrowers and not aggressively targeting students and families that are having financial difficulties,” Gordon said in an emailed release. “The state should be supporting students and young workers in particular, not putting up additional barriers to their future success.”