9 Options for Student Loan Forgiveness in NJ
Updated: Nov 18
New Jersey is a state with so much going for it. Proximity to the world's second richest city by GDP, sprawling farmland, and a beautiful coastline are only a few of the things that The Garden State has in its favor.
At the same time, though, the state has not been left unscathed by the student debt crisis. In fact, the average New Jersey borrower has nearly $34,000 in outstanding student loan debt. And even after President Biden's $10,000 in student loan forgiveness becomes effective, there will still be student debt left - and a lot of it.
Fortunately, New Jersey is one of forty-eight states that fund their own loan forgiveness programs.
Student loan debt in NJ
According to a Student Loan Hero analysis in late 2021, there were about 1.3 million borrowers in The Garden State. And even if 1/3 of these borrowers have $10,000 or less in remaining federal student loan debt, there will still be over 800,000 remaining outstanding borrowers left even after Biden's forgiveness is credited to borrower accounts.
Furthermore, the state cumulatively has nearly $50 billion in outstanding student debt, a huge balance. Unsurprisingly, these balances tend to be higher in areas with more highly educated workforces, such as Morris, Somerset, and Monmouth Counties.
How to get student loan forgiveness in NJ
We like to teach the process of earning student loan forgiveness as a four step process. This is especially true in a state like New Jersey, where you have five unique state programs in addition to those options offered by the United Stated Department of Education.
In order, the four steps you'll want to follow are:
Researching and finding a program that works for you
Applying for the program
Fulfilling the obligations of the program
Earning loan repayment assistance
Step 1: Federal forgiveness programs available in NJ
As you know, there are a handful of well-funded federal forgiveness programs that can help you rid yourself of our student loan debt.
Among these are:
Teacher Loan Forgiveness
Perkins Loan Cancellation
You'll also want to consider the four income-driven repayment plans.
But this article will touch upon New Jersey's five state-sponsored forgiveness programs.
We've seen every mistake in the books, and we recommend that you continue to browse all of New Jersey's state sponsored programs before continuing on to step 2. This is because you may qualify for multiple programs, in which case you'll want to be sure to pick the most lucrative program with the most relaxed eligibility criteria.
Consider a doctor, for example. Physicians are likely to qualify for both NHSC and state programs, and they want to be sure that they don't leave the potential for thousands more in forgiveness on the table.
New Jersey student loan forgiveness programs
New Jersey's student loan programs are geared towards helping those working as doctors, lawyers, or within a STEM related field (science, technology, engineering, mathematics).
As of this time, there are five state-specific loan repayment assistance programs, managed by the New Jersey Higher Education Student Assistance Authority. They are:
All of these programs are reserved for borrowers with federal student loan debt.
Wondering what student loan repayment options you have, and what they could do to your monthly payments? Download our student loan calculator.
1. New Jersey STEM Loan Redemption Program
The first of the New Jersey forgiveness programs, the STEM Loan Redemption Program is reserved for those working in eligible careers within the fields of science, technology, engineering, and mathematics.
To be eligible for the program, you'll need to:
Work and be a resident of NJ
Have a proper STEM designated college degree from an approved college or university within the state
Have already worked four years in an approved STEM role
Continue to work in approved STEM roles for another 1 - 4 years after applying for forgiveness
Have eligible federal or New Jersey state (NJCLASS) loans
Those that participate for four years are ineligible for award renewal.
You'll also need to have graduated from college on or after 12/14/2018, and your loans cannot be in default. Loans taken out by others to help finance your college education are not eligible.
If you meet these requirements, you'll be eligible for up to $2,000 in loan forgiveness annually for 4 years, a total of $8,000 in forgiveness.
More information about the program can be located via New Jersey's Higher Education Student Assistance Authority - HESAA for short.
2. New Jersey's National Health Services Corp Loan Repayment Program
The National Health Services Corp Loan Repayment Program is a forgiveness program that carries up to $50,000 in student loan forgiveness in exchange for a two-year service requirement at an approved HPSA site.
These HPSA sites are federally designated health professional shortage areas and typically service underserved populations.
Another cool part of NJ NHSC is that you can also opt to work half-time and receive half of the forgiveness - $25,000 instead of the $50,000.
Though the base program has that two year commitment, there is the potential to go year-to-year in a continuation of your service for additional forgiveness.
3. John R. Justice Federal Student Loan Redemption Program
New Jersey, like many states nationwide, struggles to attract and retain public defenders and prosecutors.
Qualification for New Jersey's John R. Justice program is similar to other states. You'll need to work full-time for the state as either a public defender or prosecutor, but other than that, the eligibility is fairly broad as far as student loan forgiveness goes. You'll just want to make sure that:
Your federal loans are in good standing - your loans cannot be in default
Agree to keep working for the state of New Jersey as a prosecutor or public defender for an additional three years.
So if none of this information is disqualifying for you, you'll want to consider applying.
More information can be found by contacting HESAA directly at 800-792-8670, ext. 5535. You'll just want to verify that the information you are being given is pertinent to New Jersey's John R. Justice program.
4. Nursing Faculty Loan Redemption Program
New Jersey is also not alone in facing a nursing faculty shortage, and the Covid-19 pandemic has only made things worse nationwide.
To help counter these national trends, the state has a nursing faculty program in place that can provide annual forgiveness amounts through the five year program.
After you've completed your qualifying education (a minimum of a graduate degree off a list of approved programs), you'll receive the following forgiveness at the conclusion of each year of service:
End of year 1: $5,000
End of year 2: $7,000
End of year 3: $10,000
End of year 4: $13,000
End of year 5: $15,000
So, if you complete your entire five years of service, you'll receive a total of $50,000 in student loan forgiveness!
Of course, you will become ineligible for any further benefits if you become debt-free before the end of the five year service.
New Jersey's HESAA will automatically make the payments directly to your loan servicer each year.
5. Primary Care Practitioner Loan Redemption Program
New Jersey's Primary Care Practitioner Loan Redemption Program provides primary care healthcare providers in the state a unique opportunity to receive up to $120,000 in student loan forgiveness.
Eligible healthcare workers may include:
Certified nurse practitioners
The service commitment for the program entails a minimum of two years, and can continue to participate for a third and fourth year, if the program remains funded.
Participation must happen a maximum of two years after completing all applicable training and education.
You can find more eligibility information through HESAA.
More: Looking to buy a home soon in NJ? Here's what you can expect to pay in closing costs.
6. NJCLASS Loan Redemption Program for New Jersey Teachers
The last state-run option is also the newest. New Jersey teachers who teach in areas with shortages or other needs may be eligible to receive up to $20,000 in loan repayment assistance over a period of 4 years if they are:
Residents of the state of NJ
Must have NJCLASS loans and not be in default
Must be fully certified to work as a teacher in the state
Must have been hired on or after January 18, 2022
There are a couple of other program eligibility requirements.
Applying for NJ teacher loan forgiveness is easy to do and only requires a simple two-page form to get started. You'll see a picture of the application below. Once complete, email submissions are accepted to LoanRedemption@hesaa.org.
Step 2: Apply for student loan forgiveness
After you've educated yourself on both the federal and New Jersey based loan repayment options, it'll be time to apply for whichever program you deem to be the most advantageous. Before you begin actually filling out the application, it will be useful to know when your application is due, as well as what supporting documents you'll need to support it.
It is common to need some or all of the following documents:
Loan information: Promissory notes, outstanding balances, terms, and rates
Financial: A copy of a W-2 or recent paystub is common
Other: It is program and state specific, but you may need references
Step 3: Fulfill the program's obligations to receive forgiveness
Remember - each option here comes with both eligibility requirements as well an ongoing requirements to earn the forgiveness you've applied for. We have a couple of tips here to make this as simple as possible.
First, make sure that you are crystal clear on any and all requirements so that you don't make a mistake. Take note of all the details for they are important. We once heard a story of somebody who left a program following the base level service commitment of two years without knowing that he could have renewed and potentially had the entire remainder of his student loans forgiven.
The other thing to pay attention to is the length of the commitment you're making, especially as a lawyer or healthcare provider. It is common for many programs to span two years, but if you encounter something longer, be sure you are prepared to complete your service, or else you'll likely forego all forgiveness and may also have to pay back interest.
But after you've figured all of this out, Step 4 will automatically occur - congratulations!
Bonus step: get our student loan forgiveness calculator
Unsure as to what your next steps should be? We built a student loan forgiveness calculator especially for you. This calculator, which you can use to compare your projected monthly payments, debt-free year, and forgiveness balance, is a must for anybody with student loan debt.
Other repayment options available to residents of New Jersey
Unfortunately, no matter how hard you try, there is a chance that none of these programs will be right for you. And since many of them are based on career choice and other criteria that are hard to control, that's okay!
You can consider alternate strategies such as:
Refinancing your loans
Refinancing may be a great option for those who don't qualify for any of the state's student loan forgiveness programs. You may be able to lower your monthly payments, get out of debt earlier than anticipated, or maybe both.
If you're unsure whether refinancing may be the right path for you, checking your rates with Splash Financial and LendKey can be a great place to start. The process takes less than three minutes and doesn't impact your credit until you accept a refinancing offer.
Student loan forgiveness in nearby states
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