President Coughlin touts New Jersey College Affordability Act tax savings for students and working families effective for 2022
(TRENTON) – New Jersey has worked hard to prioritize access to higher education for New Jersey students, knowing the importance of college opportunities for people of all ages and backgrounds, the economy and the future of the state.
In conjunction with the Higher Education Student Assistance Authority of New Jersey, Assembly Speaker Craig J. Coughlin held a press conference Thursday at the College of New Jersey to highlight new tax savings that will take effect at beginning with the 2022 tax year under the New Jersey College Affordability Act.
“Today’s young people, even before buying a house, have a mortgage and it’s called their student loans”, said President Coughlin (D-Middlesex). “With a three-pronged approach to help New Jersey’s working and middle-class families afford college by encouraging savings on future college costs, providing tax relief to those who pay the tuition fees and assisting with the repayment of loans from the state, we ease the discouragement challenge of paying for higher education.The goal is to ensure that every child and parent knows that the state has a back for succeed socially and economically.
The Act creates three new tax savings programs for families and households earning up to $200,000:
- An annual state income tax deduction of up to $10,000 in contributions to each NJBEST 529 College Savings Plan account.
- An annual state income tax deduction of up to $10,000 for tuition paid to a college or university in New Jersey.
- A state income tax deduction of up to $2,500 in principal and interest paid on the balance of a New Jersey College Loan to Assist State Students (NJCLASS) family loan.
For families with adjusted gross income between $0 and $75,000, the law also provides a one-time grant of up to $750, as a dollar-for-dollar match for the initial deposit into a new account with a new student beneficiary. With the minimum initial investment to open a tax-advantaged NJBEST account being just $25, it is an affordable and accessible savings vehicle for most families.
“The NJBEST 529 College Savings Plan helps New Jersey families borrow less and avoid student loan debt by saving for future college expenses. We are now offering new incentives to save for college through the New Jersey College Affordability Act that was signed into law under the leadership of Governor Murphy, President Coughlin, President Jasey and their colleagues at the College. ‘Legislative Assembly’, said David Socolow, executive director of the New Jersey Higher Education Student Assistance Authority (HESAA). “Eligible New Jersey families who open a new NJBEST account can receive up to $750 in dollar-for-dollar matching grants to increase their savings. When NJBEST account recipients enroll in a college or university in New Jersey, they can apply for a scholarship of up to $3,000.
“Starting with the 2022 tax year, New Jersey taxpayers can deduct up to $10,000 in annual contributions to an NJBEST account from their state income taxes, as well as tax deductions for annual payments for in-state tuition and NJCLASS loans. Along with HESAA’s existing state financial aid grants and scholarships and the new Garden State Guarantee, these initiatives are helping to make college more affordable and expand economic opportunity.
“The College Affordability Act will help break down barriers in New Jersey that have prevented many low-income families from accessing the significant benefits that higher education offers,” said Dr. Kathryn Foster, President of the TCNJ. “A college-educated workforce is critical both to the future of our state and to the economic mobility of its citizens.”
“To prepare our students for success, we must tackle the devastating student loan debt that limits the ability of college graduates to pursue their careers and life goals,” said Assembly Higher Education Committee Chair Mila Jasey (D-Essex, Morris). “Many graduates are forced to delay important milestones like buying a home or starting a family because their student loan debt has followed them well into adulthood. By helping New Jersey families afford a college education through the New Jersey College Affordability Act, we are preventing countless students from having to choose between academic success and economic security in their future.
“Providing an affordable college education is a cornerstone of the state’s vision for higher education,” said Assistant Secretary for Higher Education Katie Comanto. “Investments in post-secondary access and success are critical to improving employment prospects and outcomes for residents, especially those in low-income and marginalized communities. By supporting students and retaining talent in the state, we can continue to build a highly skilled and educated workforce that builds economic prosperity for all New Jerseyans.
“On 1.2 million New Jersey residents — one in six adults — collectively owes $40.5 billion in unpaid federal student loans,” said Beverly Brown Ruggia, Financial Justice Program Director for New Jersey Citizen Action. “These residents, young and old, cannot use this money to buy a first home, start a family, cover basic expenses, save for retirement, or participate fully in our state’s economy. Tax deductions under the College Affordability Act will help New Jerseyans invest in their education without going into debt and are another example of the comprehensive approach state policymakers are taking to address the crisis of student debt. We commend President Coughlin for championing this vital bill, which comes into effect this tax season. We look forward to continuing to work with the Legislative Assembly and Governor Murphy on ways to end the crisis and restore the great American tradition of access to higher education for all.
“The affordability of a college education is central to building a better future for New Jersey’s youth,” said Roshni Raji, Executive Chair of TCNJ’s Student Government. “Helping talented, passionate, and hard-working students in New Jersey find the same opportunities I was given to thrive, the College Affordability Act means that every student who dreams of going to college now has a easier way.”
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