New Jersey’s college loan program under fire for aggressive collection tactics

Parents claim the college loan program operated by New Jersey’s Higher Education Student Assistance Authority has deceived their families and is using aggressive collection tactics.

Marsha DeOlivera told a legislative committee that even though her son was murdered, the Higher Education Student Assistance Authority told her she was not eligible for loan forgiveness, “Every month I have to write a check for the next 7, 8 years reminding myself that my son is not going to graduate.”

Deborah Carney says her son filed for bankruptcy after a default judgement because he didn’t earn enough to keep up with monthly loan payments. She says the agency is not helping borrowers with financial difficulties, “HESSA had no problems saying yes to risky loans and they are having no problems saying no when borrowers need help.”

Parents say the agency won’t allow income sensitive repayment options that would help studentsmeet their loan obligations.

Senator Bob Gordon says the loan program may have been predestined to have problems because of the way it was financed, “By relying on the bond markets you create an inherent conflict between the needs of the bond holders who want to see aggressive collections of revenue and the needs of the customers who need some flexibility when their economic circumstance change.”

Lawmakers say they’ll consider measures to overhaul to loan process.

The criticized the authority’s officials for not showing up at the Senate hearing.