Legislation sponsored by Senators Tom Kean, Jr. (R-Union) and Robert W. Singer (R- Ocean) designed to help high school students better understand the financial obligations they are incurring when taking out student loans to finance their post-secondary education has been approved by the Senate Higher Education Committee.
The bill, S- 2150, requires the Higher Education Student Assistance Authority (HESAA) to develop a document containing student loan repayment information on state, federal and private student loans, and mandates that document be disseminated by school districts and nonpublic high schools to students.
Kean said that student loan debt presents challenges to new graduates that they may or may not have foreseen when choosing what institution to attend or degree to pursue.
“Americans citizens are now in greater debt for student loans than they are their cars or credit cards,” said Kean. “It is straining our economy and severely crippling the financial stability of graduates just starting out in life during an economic downturn. Just as important for young people as having access to education financing is having access to information that spells out explicitly what the loans mean for their personal finances after graduation. Young people and their parents need to make smart choices about their education based in part on how the debt they will incur helps their job prospects and earning potential after graduation.”
Singer said that for most high school graduates, student loans are the first major financial transaction they will make in their lives.
“Student loans are being taken out by young people who likely have never incurred a major financial obligation in their lives and have limited financial literacy,” said Singer, who sits on the board of Georgian Court University in Lakewood. “They need to have a grasp of what loan repayment will mean for them prior to deciding where they go to school, what they will study, and how much money they will borrow. We cannot just expect that a teenager is going to grasp what it means to finance an education costing tens or even hundreds of thousands of dollars without illustrating it for them.”