TRENTON – A bill sponsored by Senator Joseph F. Vitale that would encourage graduates of New Jersey state colleges or universities to enter fields that are facing labor shortages was approved today by the Senate Higher Education Committee.
The bill, S-1229, would create the ‘Workforce Shortage Loan Redemption Program’ that would provide student loan redemptions of up to 75 percent in return for four years of service in a field with qualifying labor shortages.
“The ‘Workforce Shortage Loan Redemption Program’ would help to fill vacancies in professions with large workforce shortages by targeting highly-qualified recent graduates and matching them with careers that are in high demand,” said Senator Vitale (D-Middlesex). “Not only would this program benefit New Jersey’s economy by connecting people with jobs, but it would also encourage New Jersey’s best and brightest to stay in state after they graduate.”
New Jersey’s Higher Education Assistance Authority would choose qualified participants for the program who have associate, bachelor’s or advanced degrees appropriately related to a field that there is a labor shortage in the state and based on the applicants academic accomplishments and financial need. Eligible participants would have to be state residents, have graduated from a state public institution of higher learning and have agreed to perform the required service obligation.
In return for the commitment to stay in state and work in a field with labor shortages, participants of the program would receive student loan redemptions broken down over four years – up to18 percent of principal and interest for the first full year of service, up to 18 percent for the second year, up to 19 percent for the third year, and up to 20 percent for the fourth and final year of service.
The bill would establish a 13-member council including the executive directors of the Economic Development Authority and the Commission on Higher Education, the Commissioner of Labor and Workforce Development, the chairperson of the State Employment and Training Commission and nine public members who should be representative of the business, labor and higher education communities. Within 15 months of appointment, the council would be tasked in identifying no more than three fields in which there is a shortage of qualified labor in New Jersey and recommend to the Governor that these fields be included within the ‘Workforce Shortage Loan Redemption Program’. After the Governor’s review and approval of the council’s recommendation, the Legislature would have 60 days to disapprove of the recommendations by concurrent resolution. Additionally, the council would be required to update its recommendations through this process every five years.
“What makes this loan redemption program so different from others that have been proposed is that is doesn’t tie itself to any specific industry or profession but rather allows the council, in concert with the Governor and the Legislature, flexibility in determining where there is a workforce need in the state,” added Senator Vitale. “It is that flexibility that will sustain the program over the long haul, making sure that we can increase the number of qualified New Jersey graduates who stay in state and work in these much needed fields after college.”
The bill was approved by the Senate Higher Education Committee with a vote of 3-0-2. It now heads to the full Senate for consideration.