New Jersey's Higher Education Student Assistance Authority (HESAA) is the focus of a hearing organized by the New Jersey State Senate's Higher Education and Legislative Oversight Committees. The hearing will decide if the HESAA's practices, terms, and aggressive debt collection methods are too punishing for average borrowers.
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The hearing follows an investigation in July by the New York Times and ProPublica. It found that HESAA has unchecked collection powers and charges higher interest than many similar programs. HESAA is the largest state-based student loan program in the U.S. and has made almost $2 billion in student loans.
The investigation highlighted that the lender can seize tax refunds, garnish wages, and even revoke a borrower's professional license if the borrower misses a payment. HESAA does not need a court judgement to do this.
Following testimony by borrowers, many legislators on the panel said they found HESAA's methods troubling. Some favored dismantling the program and replacing it with clearly definedcollection capabilities that are more borrower-friendly.
HESAA Executive Director Gabrielle Charette did not attend the hearing. She submitted a letter explaining that HESAA officials were in the midst of an internal review and could not provide testimony now. She said that a report would be submitted following completion of the review.
The committees proposed a new bill, which would forgive student loans if the borrower dies, and another that would need HESAA to get a court order to seize funds.
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This article was provided by our partners at moneytips.com.
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