Tomes Law Firm, PC has been following the news about NJCLASS loans and their collection tactics as well as the refusal to create any sort of rehabilitation or income based repayment plan for these student loans. There are a lot of questions about if NJCLASS is a government loan, what rights do borrowers have? We have talked to many borrowers and would like to talk to more, because the more people we talk to, the more common threads we can find in NJHESAA’s lending and collection practices, and the more likely we may be able to help with a solution to these problem loans.
There have been articles in the New York Times, The Star Ledger, and Pro Publica about the collection tactics used when these loans go into default. Private collection lawyers are hired to sue the borrowers, and there are no real repayment plans, reinstatement plans or restructuring plans available to borrowers who fall behind.
NJCLASS loans are given by NJHESAA, which is described as a New Jersey State Agency, giving the impression, or actually stating in some places, that these loans are “sponsored” or “provided by” the State of New Jersey. That is not true.
Borrowers of these loans are borrowing from what has been described as a state-sponsored loan shark, or a hedge fund. When the application is filled out, the co-signor becomes responsible for the loan as well, and the cosigner has good credit, income, and assets. How else would a 17-year-old whose highest annual income has been the $2,000 they made over the summer for the last 3 years repay a $30,000 loan? the answer is that the co-signor will. So the parents and the kids are both locked into a debt they can’t get out of by a lender that asserts the power of the state to collect its money.
Tomes Law Firm, PC is a consumer protection law firm focused on providing quality legal support to those who are being exploited throughout New Jersey. If you need our services, contact our law firm for a consultation today.