New Jersey Governor Chris Christie revised the NJSTARS scholarship program to help relieve college tuition costs and student loan debt. In addition, U.S. Senator Frank Lautenberg said he would support proposed federal legislation that would halt interest hikes on government-issued student loans. As we mentioned in a March 9 blog entry about proposed federal bills that would allow college graduates to include student loans in their personal bankruptcy filings, student loan debt now exceeds credit card debt across the country.
The NJSTARS program, originally passed in 2004, allows students to receive a college degree from New Jersey’s public institutions at a reduced cost. The state will now pay at least half of a student’s tuition at community colleges. The tuition benefit from the enhanced program will pay $1,250 per semester. Unfortunately, student loan interest rates will double unless Congress enacts a new law by July 1. If not passed, the two would seem to cancel each other out and students would still be left footing the whole bill.
In today’s economy, our college students are graduating with hundreds of thousands of dollars in student loans and credit card debt, and no possibility of a job. In fact, student loan debt is estimated at more than $1 trillion. That’s one-fifteenth of the national debt. Recent grads remain unemployed and deferments can’t go on forever. Those interest rates will accrue and double the original unpaid principal amount.
By halting the doubling of government tuition loan interest rates, and allowing individuals to roll their student loan debt into their personal bankruptcy debt relief or repayment plans, we can help stave off our children spiraling into a black hole of debt before they even get their first job.
Source: nj.com, “College students need tuition help,” May 6, 2012