The New Jersey Pay it Forward Program, a new workforce development initiative that aims to help residents get a quality postsecondary education and training to advance their careers, was launched on Wednesday.
The first of its kind in the nation, the goal of the program is to build a robust and talented workforce while supporting economic growth in the state, said Gov. Phil Murphy at the launch at Hudson County Community College’s Journal Square campus in Jersey City.
Participants will receive zero-interest, no-fee loans at no upfront cost, as well as non-repayable living stipends and wraparound supports, to allow them to affordably prepare for good-paying, career-track jobs in the health care, information technology (IT), and clean energy sectors, Murphy said.
The “student-friendly” $12.5 million loan program for college students targets mostly interest-free tuition repayment through a partnership between the state and private companies, which links loan repayment to how much students will earn after they graduate.
The program is designed to eliminate the uncertainty and stress” that students face when the cost is a factor in picking a career or major, Murphy said. Loan terms are designed to be more borrower-friendly than even federal student loans, according to the governor’s office.
The program will train an initial cohort of students by paying their tuition and some of their costs with grant funding for stipends for living expenses and mental health counseling services.
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The fund is a “revolving” one, said David Socolow, head of the state-run Higher Education Student Assistance Authority. That loan has “extraordinary downside protections for the consumer” because students who receive the funds pay no interest or fees and are required to pay it back only if they succeed, and that success is tied to an income threshold, Socolow said after the announcement. The money paid back by students will go back into the program to fund future students in high-demand and high-growth industries.
Students need to start repaying the loan only after they get a job and start earning.
Repayment is limited to just the tuition amount and can be waived for students whose income does not meet a $55,000 income threshold. There is a 90-day grace period after students graduate before the loan kicks in, though students can wait until they actually start earning to repay what they owe, said Tracy Palandjian, CEO of Social Finance, a nonprofit hired by the state to craft the Pay It Forward program over the past year.
The New Jersey CEO Council, a group of private companies doing business in the state, made donations to the program.
Those who land great jobs at a particular income threshold pay back loans at zero interest, those who don’t get a job with a great salary don’t have to pay back the loan at all, said Palandjian. “We hope to see businesses look to this program to fill job openings,” she said, adding the program is innovative and sustainable because of how it recycles repaid loans for future students.
The program will pay tuitions for 200 to 300 students enrolled in each of the following programs: nursing at Hudson County Community College, cybersecurity at New Jersey Institute of Technology and heating, ventliation and air-conditioning (HVAC) training at Camden Community College. It will run for five years in this phase.
Eight New Jersey corporations, BD, Campbell Soup Company, Johnson & Johnson, Merck & Co., Prudential Financial, PSEG, RWJBarnabas Health and Verizon made private donations to the fund in the amount of around $5 million. The state is providing $7.5 million in appropriations, bringing the total amount available for the Pay It Forward program to $12.5 million.
Programs slated to benefit from Pay It Forward are: New Jersey Institute of Technology’s Cybersecurity Professional Bootcamp, a 10-month, part-time, online training program designed for cybersecurity careers; Hudson County Community College’s Nursing Program, a two-year, full-time associate degree program designed for careers as registered nurses; and Heating, Ventilation & Air Conditioning (HVAC) or Welding courses at Camden County College.
Murphy and other speakers at the event said they hope the program becomes a national model.
NJ kicks off ‘Pay it Forward’ zero-interest college loan program & Latest News Update
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