How are funds disbursed?

The school determines the loan disbursement dates and amounts. The proceeds may be: Electronically transferred to your school. If the school participates in NJCLASS-EFT, all proceeds will be electronically sent to the school, regardless of whether the student or the parent is the borrower. Student Borrower Check-Issued as a check made payable to the school and mailed to the school address on file. Parent Borrower Check- Issued as a check made payable to the parent and mailed directly to the parent borrower at the address on file.

Borrower and Coborrower Rights & Responsibilities

Once the student's eligibility for the loan is finalized through the school's certification, a Loan Offer Disclosure will be sent to you. We will also send a Loan Offer Disclosure to the cosigner. The loan offer must be accepted within 30 days to continue with the loan process. A Predisbursement Disclosure Statement will be sent to all parties on the loan prior to funding. There is a 3-day right to rescind period that must expire before the loan is funded.

If the school the student attends participates in electronic funds transfer (EFT), funds will be disbursed directly to the institution and credited to the student's account. The borrower has the right to pay in full or pay more than the required installment amount at any time without penalty. The borrower has the right to examine or receive a copy of the state laws and regulations that govern the NJCLASS Program.

The borrower has the right to cancel any portion of the loan within 60 days from the date of disbursement. Borrowers should have the school return funds on their behalf. Any monies returned within 60 days of disbursement will have the accrued interest credited to the loan balance.

The borrower must repay the principal and pay the interest under the terms and conditions specified on the Promissory Note. The borrower must notify HESAA promptly, in writing, if any of the following events occur before the loan is repaid:

1. The student fails to enroll in the school chosen for the period for which the NJCLASS loan was intended.
2. The student withdraws or begins attending less than half time.
3. The student graduates or changes graduation date.
4. The borrower, co-borrower, cosigner or joint cosigner changes his/her name, address, or employer.

The borrower must use the proceeds that he/she receives from the NJCLASS loan for tuition and other reasonable and authorized educational expenses - including room and board, fees, books, supplies, equipment, laboratory expenses and for transportation and commuting costs incurred by the student to attend the school chosen for the academic period indicated on the NJCLASS Loan Application.

Cosigner and Joint Cosigner Rights and Responsibilities

HESAA will provide the cosigners with a Loan Offer Disclosure Statement and a Predisbursement Disclosure Statement prior to consummation of the loan. All parties to the loan have the right to cancel the loan within the 3-Day Right to Rescind period as disclosed on the Predisbursement Disclosure Statement.

You are being asked to guarantee payment of this debt. If the borrower does not pay the debt, you will be obligated to repay the loan. Be sure that you want to accept this responsibility. If the borrower does not pay, you will be required to pay up to the full amount of the debt including interest and any late fees and collection costs, which increase this amount.

The creditor can collect this debt from you without first trying to collect from the borrower. The creditor can use the same collection methods against you that can be used against the borrower, such as suing you or garnishing your wages.

In the case of the borrower's default the cosigner and joint cosigner remain responsible to repay this loan. If the borrower's debt is cancelled due to death or total and permanent disability, the cosigner and joint cosigner remain responsible to repay this loan, unless the borrower was the student beneficiary. Your obligation can be discharged only if you or the student beneficiary dies or becomes totally and permanently disabled.

What to Consider When You're Considering Cosigning a Loan

Privacy Act Notice Screen

Disclosure of your Social Security Number (SSN) is required to participate in the NJCLASS Program. The authority for collecting the requested information from and about you is N.J.S.A 18A:71C-21 et seq.

The principal purpose of this information is to verify your identity, to determine your Program eligibility and benefits, to permit the servicing of your loan(s) and, in the event it is necessary, to locate you and to collect on your loan(s) if it becomes delinquent or defaulted throughout the life of your loan(s).

The routine uses of this information include its disclosure to Federal, State, or local agencies, to private parties such as relatives, present and former employers, business and personal associates, to guaranty agencies, to credit bureau organizations, to educational and financial institutions, and to agency contractors in order to verify your identity, to determine your Program eligibility and benefits, to permit the servicing or collecting of your loan(s), to counsel you in repayment efforts, to investigate possible fraud and to verify compliance with Program regulations.

NJCLASS Fixed Rate Loan Features:

NJCLASS Variable Rate Loan Features:

Are there loan limits for NJCLASS Loans?

Pursuant to P.L.2017 c.198, student beneficiaries first applying for a NJCLASS loan on or after August 8, 2017 will be subject to a loan limit. This is an aggregate per student loan limit, which will be increased annually for each academic year over the prior year by the regression-based index value of the Higher Education Price Index. The loan limit does not apply to students who have previously received NJCLASS loans prior to August 8, 2017 or who applied for their current loans prior to August 8, 2017.

Must I consider Federal Loans before I take out a NJCLASS Loan?

Public Law 2017 c. 198 also added requirements regarding the maximum annual loan amounts for a student borrower. To determine the maximum annual loan amount the total federal subsidized Direct loan amount available to the student has always been deducted from the NJCLASS loan amount. The new law now requires HESAA to deduct the maximum amount of federal Direct Unsubsidized Loans available to the student from the available NJCLASS loan amount if the available interest rate for federal Direct Unsubsidized Loans is lower than the interest rate available to the student under the NJCLASS Loan Program. However to ensure that students do not lose federal loan benefits, including but not limited to income-based repayment (IBR), loan forgiveness and redemption programs, HESAA is requiring all federal Direct Loan amounts, subsidized and unsubsidized, to be deducted from the certified NJCLASS loan amount, regardless of the interest rate.