Establishes Grow Your Own Teacher Loan Redemption Program in Higher Education Student Assistance Authority.

A2040

ASSEMBLY, No. 2040

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman SHAMA A. HAIDER

District 37 (Bergen)

Co-Sponsored by:

Assemblywoman Reynolds-Jackson

SYNOPSIS

���� Establishes Grow Your Own Teacher Loan Redemption
Program in Higher Education Student Assistance Authority.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act
establishing the Grow Your Own Teacher Loan Redemption
Program and supplementing chapter 71C of Title 18A of the New Jersey Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� As used in this act:

���� �Approved course of study� means
an undergraduate program� leading to a bachelor's degree offered by a four-year
public or independent institution of higher education; or a graduate program
leading to a master's degree offered by a public or independent institution of
higher education.�

���� �Authority� means the Higher
Education Student Assistance Authority.

���� �Department� means the
Department of Education.�

���� �Eligible student loan
expenses� means the cumulative outstanding balance of student loans covering
the cost of attendance while enrolled in an approved course of study.� Interest
paid or due on student loans that a program participant has taken out for use
in paying the costs of attendance at an institution of higher education shall
be considered eligible for reimbursement under the program.

���� �Program� means the Grow Your
Own Teacher Loan Redemption Program established pursuant to this act.

���� �Program participant� means a
person who has executed a contract with the authority for participation in the
program.�

���� �School district� or
�district� means and includes a school district, charter school, and
renaissance school project.

���� 2.��� There is established in
the Higher Education Student Assistance Authority the Grow Your Own Teacher
Loan Redemption Program, the purpose of which is to encourage students who
graduated high school from a school district with a shortage of teachers to return
to teach in that school district.� The program shall provide for the redemption
of a portion of the eligible student loan expenses of a program participant for
each year of full-time employment as a certified teacher in the school from
which the program participant graduated high school or a district located in a
jurisdiction in which the program participant has resided for more than five
years, provided that the district is experiencing a shortage of teachers as
determined by the Department of Education.� The authority shall expend no more
than $500,000 in any State fiscal year for the purposes of implementing the
program.

���� 3.��� To be eligible to
participate in the program, an applicant shall:

���� a.��� be a resident of the
State and maintain domicile in the State during participation in the program;

���� b.��� have graduated from a
high school in, or resided for more than five years in the same jurisdiction
as, a school district designated by the department as having a shortage of
teachers during the year in which the applicant submits a program application
to the authority;

���� c.��� be hired as a certified
teacher by the school district with a shortage of teachers from which the
applicant shall have graduated high school or by the school district with a
shortage of teachers located in the jurisdiction in which the applicant has
resided for more than five years; and

���� d.��� have an outstanding
balance on a State or federal student loan and not be in default on any loan.

���� 4.��� An individual shall
apply to the authority to participate in the program.� The executive director
of the authority or the executive director�s designee shall select the program
participants from among the applicants who meet the eligibility criteria
established pursuant to section 3 of this act, subject to available funds.�

���� 5.� a.� A person who meets the
eligibility requirements under section 3 of this act and has been selected by
the executive director or the executive director�s designee for participation
in the program shall enter into a written contract with the authority.� The
contract shall specify the duration of the applicant�s required employment,
which shall be no less than five years, and the total amount of eligible student
loan expenses to be redeemed by the State in return for employment as a teacher
in the school district with a shortage of teachers from which the applicant
graduated high school or in the school district with a shortage of teachers
located in the jurisdiction in which the applicant has resided for more than
five years.�

���� b.� A program participant who
has entered into a contract with the authority shall remain eligible for loan
redemption under the contract in the event that the school district from which
the program participant graduated high school or the district located in the
jurisdiction in which the applicant has resided for more than five years, and
in which the teacher is employed, loses its designation as a school district
with a shortage of teachers.�

���� c.� The redemption of loans
under the program shall not exceed $10,000 of principal and interest of
eligible student loan expenses for each full year of employment by the program
participant.� The total loan redemption amount for a program participant, for
five years of employment, shall not exceed $50,000.�

���� d.� Prior to the annual
redemption of loan indebtedness, the program participant shall submit to the
authority certification of full-time employment in the school district.

���� e.� The required period of
service as a teacher shall commence on or after the effective date of this
act.�

���� 6.� a.� A program participant
who has previously entered into a contract with the authority pursuant to
section 5 of this act may nullify the agreement by notifying the authority in
writing and reassuming full responsibility for the remaining outstanding
balance of the loan debt.�

���� b.� In the case of a program
participant�s death or total and permanent disability, the authority shall
nullify the employment obligation of the program participant.� The
nullification shall terminate the authority's obligations under the loan
redemption contract.� When continued enforcement of the contract may result in
extreme hardship, the authority may nullify or suspend the employment
obligation of the program participant.

���� c.� In the case of a program
participant�s conviction of a crime or an act of gross negligence in the
performance of employment obligations, the executive director or his designee
is authorized to terminate the program participant's participation in the program.�

���� 7.� A person who knowingly or
willfully furnishes any false or misleading information for the purpose of
receiving loan redemption benefits under the program is guilty of a crime of
the fourth degree.�

���� 8.� The authority, in
consultation with the department, shall adopt rules and regulations pursuant to
the �Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et seq.),
necessary to implement the provisions of this act.

���� 9.��� This act shall take
effect immediately.�

STATEMENT

����� This bill establishes the
Grow Your Own Teacher Loan Redemption Program in the Higher Education Student
Assistance Authority (HESAA).� The purpose of the program is to encourage
students who graduated high school from a school district, or lived in a school
district for more than five years, with a shortage of teachers to teach in that
school district.� The bill�s definition of �school district� includes school
districts, charter schools, and renaissance school projects.��

���� Under the bill, HESAA is
required to offer loan redemption up to $10,000 of principal and interest of
eligible student loan expenses for each full year of employment by the program
participant.� The total loan redemption amount for a program participant, for
five years of employment, is not to exceed $50,000.� HESAA is not to spend more
than $500,000 for program implementation in any State fiscal year.

���� To be eligible to participate
in the program, an applicant is required to: be a resident of the State and
maintain domicile in the State during participation in the program; have
previously graduated high school in a school district designated by the Department
of Education as having a shortage of teachers during the year in which the
applicant submits a program application to HESAA or have resided in the
jurisdiction in which a school district with a teacher shortage is located for
more than five years; be hired as a certified teacher by the school district
from which the applicant graduated high school or a school district located in
a jurisdiction in which the applicant has resided for more than five years,
provided that the district is experiencing a shortage of teachers as determined
by the department; and have an outstanding balance on a State or federal
student loan and not be in default on any loan.

���� The bill requires a program
participant to enter into a written contract with HESAA to participate in the
program.� The contract is to specify the duration of the applicant�s required
employment, which is to be no less than five years, and the total amount of
eligible student loan expenses to be redeemed by the State in return for
employment as a teacher in the school district.