N.J. Admin. Code § 9A:10-6.12

Current through Register Vol. 56, No. 21, November 4, 2024

Section 9A:10-6.12 - Deferments and forbearance

(a) Under certain conditions, borrowers shall be permitted to defer payments of interest and/or loan principal for specified periods of time. Some deferments may only be granted if both the borrower and co-borrower qualify for the deferment. During periods of authorized deferment, borrowers remain responsible for the payment of the interest accruing on their loan(s), except for during approved periods of temporary total disability of the eligible student borrower. The following are available NJCLASS Loan Program deferments and their requirements:

1. Full-time and half-time study at an eligible institution;

2. Unemployment.

i. Borrower must be currently unemployed and conscientiously seeking but unable to find full-time employment.

ii. The borrower may be granted up to a six-month deferment upon his or her initial request if the borrower provides acceptable proof of eligibility for unemployment benefits or a signed written statement describing his or her conscientious search for full-time employment. The statement must include:

(1) Proof that at least three attempts were made to gain employment;

(2) The names, addresses and phone numbers of the possible employers contacted;

(3) The name of the contact person at each possible employer; and

(4) A certification of registration with a public or private employment agency.

iii. For all requests beyond the initial request, the borrower shall provide a signed written statement describing his or her conscientious search for full-time employment during the preceding deferment period. The statement must include the documentation, contact information and certification specified in (a)2ii above.

iv. In order to remain eligible for the deferment, the borrower shall not restrict his or her search to specific fields, positions, or salaries;

3. Service as an intern or resident.

i. Borrower must be currently participating in an eligible internship or residency program of supervised training that is required by a State licensing agency prior to certification for professional practice or service.

ii. Borrower shall provide certification from the appropriate State licensing agency attesting to the necessity of the internship or residency.

iii. Borrower shall provide certification from the organization with which the internship or residency is being undertaken, which specifies:

(1) Acceptance of the borrower into the internship or residency program; and

(2) Anticipated beginning and completion dates of the program;

4. Active duty status in the Armed Forces.

i. The borrower shall provide documentation attesting to full-time active duty status. Acceptable documentation includes, but is not limited to, a copy of military orders or leave and earning statements. Borrowers shall notify the Authority upon release from active duty;

5. Peace Corps;

i. To qualify for this deferment, a borrower shall submit a request and provide the Authority with a statement from an official of the Peace Corps program certifying:

(1) That the borrower has agreed to serve as a volunteer on a full-time basis for at least one year;

(2) The date on which the borrower's service began; and

(3) The date on which the borrower's service is expected to end; and

6. Temporary total disability.

i. To qualify for this deferment, a borrower shall submit a request in a form prescribed by the Authority, and provide the Authority with a statement from a physician, who is a doctor of medicine or osteopathy and is legally authorized to practice, certifying that the borrower is temporarily totally disabled. If an eligible student borrower qualifies for this deferment it will be granted regardless of whether the other parties to the loan qualify for a deferment.

(b) The deferment begins on the date the borrower's qualifying status is certified to begin and ends on the date the borrower's qualifying status is certified to end. Maximum allowable time periods for all deferments except full-time and half-time study at an eligible institution, temporary total disability of an eligible student borrower, and active duty in the armed forces shall not exceed six months for loans with a 10-year repayment term, 18 months for loans with a 15-year repayment term, 24 months for loans with a 20-year repayment term, 30 months for loans with a 25-year repayment term, and 36 months for loans with a 30-year repayment term for an unemployment deferment, and for each of the remaining deferments, as established by the Authority. Full-time and half-time study deferments are not available within 24 months of the loan maturity date. Deferments for NJCLASS Loan Program loans with a 10-year repayment term are limited to unemployment and total temporary disability deferments.

(c) Upon receipt of a borrower request for a deferment and all required documentation, the Authority shall notify the borrower regarding the deferment's authorization.

(d) The Authority may also, at its discretion, grant borrowers periods of forbearance in the repayment of the NJCLASS Loan Program loan(s). Forbearance will only be granted if the ability of both the borrower and co-borrower to make scheduled payments has been impaired based on the same or differing conditions. Forbearance may be granted for situations including, but not limited to, financial hardship, which means situations where the overall financial circumstances of the individual seeking relief are such that he or she is unable to maintain a basic standard of living and still make NJCLASS Loan Program debt payments. The maximum allowable time period for financial hardship forbearance shall not exceed six months for loans with a 10-year repayment term, 18 months for loans with a 15-year repayment term, 24 months for loans with a 20-year repayment term, 30 months for loans with a 25-year repayment term, and 36 months for loans with a 30-year repayment term. In granting a forbearance, the Authority permits a temporary cessation of principal payments and temporarily permits payments of interest only, or a temporary cessation of both principal and interest payments. Interest continues to accrue during all forbearance periods.

N.J. Admin. Code § 9A:10-6.12

Amended by 46 N.J.R. 2358(a), effective 12/1/2014

Amended by 48 N.J.R. 2433(a), effective 11/21/2016

Amended by 49 N.J.R. 2965(a), effective 9/5/2017