By Brenda Flanagan
Correspondent
“This is not fair. It’s something that’s complete injustice.”
Marcia DeOliveira-Longinetti told lawmakers a heart-wrenching story of how the state agency that issued her son Kevin’s NJCLASS college loan refused to forgive the debt — even after Kevin was brutally murdered.
“He was was murdered in his own home. I think that should be an exception, because this doesn’t happen every day. They’re not wasting money forgiving this loan. Every month I have to write a check, for the next seven to eight years, reminding myself that my son’s not going to graduate,” she said.
Angry borrowers gathered at a special hearing of Senate committees and called NJCLASS loans a disgrace the way they’re administered by the NJ Higher Education Assistance Authority, or HESAA. Unlike federal education loans, HESAA doesn’t automatically forgive debts when a borrower dies and it severely limits repayment options.
“NJCLASS loans are discriminatory and nothing more than legalized loansharking by taking advantage of young students and their families. We fully acknowledge the debt. As responsible borrowers we want to pay that debt, but HESAA denied us the support, the means and the opportunity,” said Tracey Timony.
“They don’t care — they want their money — and they don’t care where it comes from. There are no flexible repayment options, no true deferment programs, no refinance options and no loan rehabilitation options,” Deborah Carney-Gumpper said.
Even though it’s run by a state agency, the $1.9 billion in NJCLASS loans are privately-funded. Often borrowers don’t realize that, but the state can garnish wages and turns hundreds of accounts over to collection agencies. Critics believe it’s a fundamental problem because it makes HESAA strive for profit.
“The student loans are financed through tax exempt bonds, so the bond holders become much more important, it seems, than those trying to get a college education,” said Sen. Loretta Weinberg.
And because HESAA doesn’t base loan payments on ability to pay, families are forced into bankruptcy.
“I’m not asking for a handout. I am not asking to forgive all of my debt. I’m asking for our life back. I’m asking for a chance to have a future,” said Cassandra Alessio.
HESAA was invited to testify, but didn’t show up. They sent a letter noting that since 2012, it’s forgiven 47 loans and is “…undertaking a review of how the policy is working in practice when these tragic situations arise, to ensure we are handling each case with appropriate compassion and consideration … balanced against our fiduciary obligation to be responsible stewards of public funds.” Lawmakers said, the agency needs to offer more options.
“Those options need to be flexible payment, more competitive interest rates, the ability of borrowers to catch up with payments or even refinance obligations — all these possibilities need to be on the table,” Sen. Tom Kean Jr. said.
Even as HESAA re-examines its own policies, lawmakers say they will study this testimony and come up with their own recommendations for reform.