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The trouble with NJCLASS loans

NJCLASS? You decide In my view, NJCLASS loans create a special set of problems. The following is meant as an introduction to just a few of them.

If you don’t already know, NJCLASS loans are New Jersey-based student loans offered to New Jersey residents to attend in-state or out-of-state schools or to out-of-state residents to attend New Jersey schools. NJCLASS stands for “New Jersey College Loans to Assist State Students”.  These loans are administered by a state agency, the New Jersey Higher Education Student Assistance Authority (NJHESAA).

There is information out there on how to get an NJCLASS loan. Personally, I would recommend against it and I explain some reasons why in this post.

Clients who already have one or more NJCLASS loans come to me on a fairly regular basis, usually after the problems have been going on for a while. They are already in default because they’ve missed payments or they haven’t been able to make full monthly payments for awhile. When these loans default, NJHESAA transfers them over to one of its handful of law firms for collection. Often, that law firm will file a collection lawsuit against the primary borrower and the co-signer.

NJCLASS loans are often co-signed by someone like a parent or other relative who owns a major asset, such as a home. Legally, a co-signer is 100% liable for the entire amount of the loan, just as the primary borrower is. So if the collection law firm that HESAA hired manages to get a judgment against the primary borrower and the co-signer, that judgment may, at some point, become a lien against the home.  For that reason, many people prefer to avoid judgment if possible.

If you have been sued by HESAA because you defaulted on an NJCLASS loan, you need legal representation. Please call me at (201) 676-0722.

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