College costs
have gotten some attention in Arkansas lately with rising tuition, declining state support, preference for higher income students on the lottery scholarship and even some embryonic talk of an idea of need-calibrated tuitions aimed at leaving college graduates without loans to pay off.  (Hillary Clinton has also talked about a no-loan tuition plan.)

It could be worse. You could live in New Jersey.

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The New York Times reports today on New Jersey, whose state loan program doesn’t even provide a debt reprieve for students who die. 

New Jersey’s loans, which currently total $1.9 billion, are unlike those of any other government lending program for students in the country. They come with extraordinarily stringent rules that can easily lead to financial ruin. Repayments cannot be adjusted based on income, and borrowers who are unemployed or facing other financial hardships are given few breaks.

The loans also carry higher interest rates than similar federal programs. Most significant, New Jersey’s loans come with a cudgel that even the most predatory for-profit players cannot wield: the power of the state. New Jersey can garnish wages, rescind state income tax refunds, revoke professional licenses, even take away lottery winnings — all without having to get court approval.

“It’s state-sanctioned loan-sharking,” Daniel Frischberg, a bankruptcy lawyer, said. “The New Jersey program is set up so that you fail.”

By the way: The New Jersey governor appoints all the members of the board of this agency and has veto power over its decisions. The governor, Chris Christie, declined to comment on the findings.

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