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S2180 SHI Statement 3/16/26
SENATE HIGHER EDUCATION COMMITTEE
STATEMENT TO
SENATE, No.
2180
with
committee amendments
STATE
OF NEW JERSEY
DATED:
�MARCH
16, 2026
����� The Senate Higher Education Committee reports
favorably and with committee amendments Senate Bill No. 2180.
����� As amended, this bill requires the registration of
postsecondary education debt creditors and establishes protections for
borrowers.
����� The bill prohibits a postsecondary education debt
creditor from extending postsecondary education debt to a New Jersey resident
without first registering with the Commissioner of Banking and Insurance and
with the Nationwide Multistate Licensing System and Registry. Postsecondary
education debt creditors are required to provide the commissioner, at the time
of registration and not less than once per year thereafter, certain information
about the entities and the postsecondary education debt that they provide.� The
commissioner is required to post on the department�s website information about
postsecondary education debt creditors registered in the State.� The bill also
requires postsecondary education debt creditors to post on their websites a
copy of each model promissory note, agreement, contract or other instrument
used by the postsecondary education debt creditor to substantiate postsecondary
education debt. The bill provides that the commissioner may impose a civil
penalty not exceeding $25,000 on any person for a violation of the registration
provisions of the bill. Each violation which constitutes a knowing violation is
a crime of the third degree, which is punishable by three to five years
imprisonment or a fine of up to $15,000, or both.
����� The bill requires postsecondary education debt
creditors to deliver certain information to a cosigner related to impacts on
the cosigner in certain circumstances, prior to the extension of postsecondary
education debt that requires a cosigner.� For any postsecondary education debt
that obligates a cosigner and provides for cosigner release, a postsecondary
education debt creditor is required to provide the borrower and the cosigner an
annual written or electronic notice containing clear and conspicuous information
about cosigner release. Under the bill, if the borrower has met the applicable
payment requirement to be eligible for cosigner release, the postsecondary
education debt creditor is to send the borrower and the cosigner a notification
informing them that the payments requirement to be eligible for cosigner
release has been met.
����� The bill requires a postsecondary education debt
creditor to provide written notice to a borrower who applies for cosigner
release, but whose application is incomplete. Within 30 days after a borrower
submits a completed application for cosigner release, the postsecondary
education debt creditor is required to send the borrower and cosigner a written
notice that informs them whether the cosigner release application has been
approved or denied.
����� The bill prohibits a postsecondary education debt
creditor from imposing any restriction that permanently bars a borrower from
qualifying for cosigner release.� For any postsecondary education debt executed
after the effective date of the bill, a postsecondary education debt creditor
is prohibited from requiring greater than 12 consecutive, on-time payments of
principal and interest as criteria to apply for cosigner release.� This
codifies the standard currently used by major student loan companies, such as
Sallie Mae Bank. Under the bill, if a borrower or cosigner requests a change in
terms that restarts the count of consecutive, on-time payments, the
postsecondary education debt creditor is to notify the borrower and cosigner in
writing, by mail, or by electronic mail, of the impact of the change and
provide the borrower or cosigner the right to withdraw or reverse the request.�
The bill provides that a borrower has the right to request an appeal of a
postsecondary education debt creditor determination to deny a request for
cosigner release.
����� The bill prohibits postsecondary education debt
executed after the effective date of the bill from including a provision that
permits the postsecondary education debt creditor to accelerate, in whole or in
part, payments on the postsecondary education debt, except in cases of payment
default.� The bill prohibits a postsecondary education debt executed after the
effective date of the bill from including a provision that permits a
postsecondary education debt creditor to attempt to collect against the cosigner�s
estate, other than for payment default.� Upon receiving notification of the
death or bankruptcy of a cosigner, when the postsecondary education debt is not
more than 60 days delinquent at the time of the notification, the postsecondary
education debt creditor may not change any terms or benefits under the
promissory note, repayment schedule, repayment terms, or monthly payment amount
or any other debt provision.
����� Under the bill, a postsecondary education debt
creditor, upon determination of the total and permanent disability of a
borrower or cosigner, is required to release the borrower or cosigner from
their obligations under postsecondary education debt, as is the case with
federal student loans. Upon determination of the total and permanent disability
of a cosigner, a postsecondary education debt creditor is required to release
that individual cosigner from the obligations of the cosigner. The bill
requires postsecondary education debt creditors to notify borrowers and
cosigners if a cosigner or borrower is released from the obligations of the
postsecondary education debt, within 30 days of the release.� The bill requires
postsecondary education debt creditors that extend postsecondary education debt
to provide the borrower the option to designate an individual to have the legal
authority to act on behalf of the borrower with respect to the postsecondary
education debt in the event of the total and permanent disability of the
borrower.� In the event a cosigner is released from the obligations of a
postsecondary education debt, a postsecondary education debt creditor may not
require the borrower to obtain another cosigner on the debt obligation.� The
bill provides that postsecondary education debt creditors may not declare a
default or accelerate the debt against the borrower on the sole basis of the
release of the cosigner from the postsecondary education debt.� After making
the determination of the total and permanent disability of a borrower, a
postsecondary education debt creditor may not attempt to collect on the
outstanding liability of the borrower or cosigner or monitor the disability
status of the borrower after the date of discharge.��
����� The bill requires the postsecondary education debt
creditor to deliver a statement that benefits and protections applicable to
existing postsecondary education debt may be lost due to refinancing before
offering a person a postsecondary education debt that is being used to
refinance an existing postsecondary education debt.� If a postsecondary
education debt creditor offers any borrower flexible repayment options in
connection with a postsecondary education debt, those flexible repayment
options are to be made available to all borrowers of the postsecondary
education debt creditor. The bill requires postsecondary education debt
creditors to publish the criteria used to determine borrower interest rates in
all places where the interest rate is published, if the postsecondary education
debt creditor does not offer the same interest rate to all borrowers.
����� The bill provides that a postsecondary education debt
creditor may not: offer any postsecondary education debt that is not in
conformity with the bill, or that is in violation of any other State or federal
law; engage in any unfair, deceptive, or abusive act or practice; or make,
advertise, print, display, publish, distribute, electronically transmit,
telecast, or broadcast, in any manner, any statement or representation which is
false, misleading, or deceptive.�
����� The bill provides that a postsecondary education debt
creditor or debt collector attempting to collect a postsecondary education debt
is to provide certain documentation related to the debt in the first debt
collection communication with the borrower and at any other time the borrower
requests the documentation.� The bill also prohibits postsecondary education
debt creditors or debt collector from collecting or attempting to collect a
postsecondary education debt unless the postsecondary education debt creditor
or debt collector possesses certain information and documentation related to
the debt.
����� Following a payment default on postsecondary education
debt by a borrower, and before a postsecondary education debt creditor may
accelerate the maturity of the postsecondary education debt or commence a legal
action against the borrower, a postsecondary education debt creditor is
required to provide to the borrower a notice of intention to accelerate the
postsecondary education debt.� The bill provides that an action to enter a
default judgment against a borrower must be commenced within six years of the
date the borrower failed to make a payment.� The bill requires a postsecondary
education debt creditor seeking to commence legal action against a borrower to
attach certain documentation and information to a complaint filed in a court of
competent jurisdiction.�
����� The bill also provides that a borrower or cosigner who
suffers damage as a result of a violation may bring an action in a court of
competent jurisdiction to recover certain relief and damages.
����� This bill was pre-filed for introduction in the
2026-2027 session pending technical review.� As reported, the bill includes the
changes required by technical review, which has been performed.
COMMITTEE AMENDMENTS
:
����� The committee amended the bill to:
�
remove a provision that
permitted the commissioner to establish alternative registration and
re-registration procedures and fees for postsecondary education debt creditors
that are also providers of postsecondary education;
�
remove a provision that
permitted the commissioner to �establish an alternative process for reporting certain
information required under the bill for postsecondary education debt creditors
that are providers of postsecondary education; and
�
add a provision that a
postsecondary education debt �creditor that is a
provider of postsecondary education and that submits certain required documents
is to be deemed to have satisfied its registration requirements. The
requirements established by the commissioner may be specific to providers of
postsecondary education, and are not to include the use of the Nationwide
Multistate Licensing System and Registry.