Murphy: Past Time to Rein In State’s Student Loan Authority

Newark— Phil Murphy, Democratic candidate for governor, reiterated his call — first made five weeks ago — for action on allowing families of deceased college students to wipe clean the debt of college loans and for more reforms needed to protect students and families from what one attorney called “state-sponsored loan-sharking.”

On July 5, Murphy called for reforms to the student loan authority to not only provide help to grieving families, but also to require better payback schedules for lendees who lose their jobs or other income, stop unilateral wage garnishments and other punitive collection measures, and cut the agency’s ties with Wall Street that have led to the policy decisions that have proven detrimental to students and their families.

The state Senate’s Higher Education and Legislative Oversight committees are meeting today to investigate the New Jersey Higher Education Student Assistance Authority, which was the subject of an exhaustive investigation by ProPublica and published in the New York Times. As part of its hearing, the committees are expected to release legislation that would wipe clean the debt of families when the student-borrower has passed away.

Murphy released the following statement:

“With the beginning of a new academic year only weeks away, action to protect students and their families needs to be taken before the doors of our institutions of higher education reopen. We can’t wait another month, before another family’s financial future is ruined. These efforts cannot stop with just helping families whose loved ones have tragically died, leaving thousands of dollars in debt that Wall Street and Trenton won’t wipe away. We need top-down reform that benefits all students and families. As governor, I’ll see that it happens.”