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New Jersey Will Forgive Student-Loan Debt of Dead Borrowers

Gov. Chris Christie of New Jersey signed a bill on Monday that forgives the student loans of borrowers who die or become permanently disabled, ProPublica reported.

Some borrowers who become temporarily disabled can also defer loan repayment under the new law, according to the Observer.

The bill’s enactment follows an investigation by ProPublica and The New York Times that found the state’s student-loan program to have “extraordinarily stringent” rules. Their July article described how a New Jersey agency continued to bill a mother for the student loans of her son after he was murdered.

New Jersey’s nonpartisan Office of Legislative Services estimates that about 70 loans will be discharged annually under the new law, ProPublica reported, with an estimated cost to the state of $4.5 million through 2019.

“A parent’s worst nightmare is losing a child, and if that unfortunate event should occur, the last thing a parent should have to face is someone calling to collect money for student loans,” State Sen. James Beach told ProPublica in an emailed statement. “This law will put an end to that practice and help establish new policies to put in place.”

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