New Jersey launches new student loan program
Gov. Phil Murphy at the official launch of the new “pay it forward” student loan program at Hudson County Community College on Aug. 17, 2022. (Edwin J. Torres/NJ Governor’s Office)
New Jersey students can now apply for a new program that provides loans for up to 300 college students training for careers in information technology, health care, and more.
Gov. Phil Murphy announced the official launch of the New Jersey “pay it forward” program at Hudson County Community College in Jersey City on Wednesday. The $12.5 million program, paid for with public and private dollars, will provide zero-interest and zero-fee loans — plus living stipends and other free forms of support — so students can find jobs without the burden of college debt on their shoulders, Murphy said.
“This is truly Jersey-designed and a Jersey-built effort,” the governor said Wednesday. “It’s an effort that reaffirms our commitment to quality post-secondary education.”
Loans will be available to up to 300 students enrolling in programs for registered nursing at Hudson County Community College, cybersecurity at New Jersey Institute of Technology, and HVAC and welding at Camden County College. The eligible programs vary from a two-year associate degree to a 10-month online program to nine months of part-time courses.
Graduates who find jobs where they earn more than $55,000 will repay the cost of their tuition over time. Students will have their loans forgiven after five years if they have made payments on time and are found to be in good standing.
The money that’s repaid will go back into the program, so it acts as a revolving fund for future students.
“Because all loan repayments from graduates will be recycled to train future students, state funds and private donations will stretch further to reach more New Jerseyans,” said David Socolow, executive director of the Higher Education Student Assistance Authority.
Students who don’t get a job that pays over the income threshold will owe nothing, said Tracy Palandjian, CEO of Social Finance, the nonprofit designing and managing the fund.
“You only pay if you succeed. And even when you pay, you’re only repaying your principal, nothing else,” she said. “The entire program is not built on how many people actually go through the training, but actually … whether they get great jobs.”
The state has appropriated $7.5 million to the fund, and a coalition of CEOs across the state from companies like Johnson & Johnson, Verizon, and Campbell contributed about $5 million. The Department of Labor and the state Economic Development Authority will underwrite the loans.
Besides living stipends, students will also receive free mental health counseling services and access to emergency aid. None of these programs will need to be repaid.
Officials plan to expand the program in the coming months but haven’t specified to which schools.
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