Funding for NJCLASS loans is obtained through the sale of bonds. The interest rate will be a pass through rate of the bond interest rate, associated costs of sale, and such other costs of reserves, which may be required, and/or determined as the bonds are issued. The interest on the loan is not subsidized. An administrative fee, not to exceed 5% of the approved loan amount, is charged at the time of disbursement and is deducted from the loan proceeds. The minimum loan amount is $500.00. The maximum repayment period is 20 years inclusive of all deferment periods. For all options, the interest rate will increase 75 basis points (0.75%) beginning in the 49th month of repayment, however, your payment will be level throughout the life of the loan.

Repaying principal and interest immediately will result in higher monthly payments during the in-school period but overall lower finance charges; paying only interest while in school will increase your overall loan costs; and deferring all payments while in school will result in fewer payments but the highest monthly payments and finance costs.

Annual Percentage Rate (APR)

The examples below are provided to show you the required payment amounts; the timing of the payments and the total finance costs associated with a $15,000 student loan under each of the available payment options. When your loan is approved, HESAA will send you a Disclosure Statement describing the interest rate and the amount of your payments. Annual Percentage Rate (APR) represents the cost of credit, expressed as a yearly rate. It is not the interest rate on your loan; it is calculated using your interest rates, your administrative fee, the repayment option and the number of years of repayment.

Option 1: Monthly Principal and Interest Payments

If you borrowed $15,000 for the 1st semester while attending a four year college, and the interest rate is 6.25% on the unpaid principal balance for the first 48 months of repayment, with an increase to 7.00% starting in the 49th month of repayment until the loan is paid in full, an administrative fee equal to 2.0% of the approved amount is deducted from the proceeds, and the loan term is 20 years, then your monthly payment would be $113.84 until the loan is paid in full. The annual percentage rate (the cost of your credit) under this example would be 6.96% and the finance charges and administrative fee on the borrowed amount would total $12,410.99. Total payments on this loan would equal $27,110.99.

Option 2: Interest Only Payments While in School

If you borrowed $15,000 for the 1st semester while attending a four year college, and the interest rate is 6.25% on the unpaid principal balance while attending school, and during the first 48 months of repayment, with an increase to 7.00% starting in the 49th month of repayment until the loan is paid in full, an administrative fee equal to 2.0% of the approved amount is deducted form the proceeds, and the loan term is 20 years, then the quarterly interest payments while you are in school, would be $234.38, and the monthly payment once you enter repayment would be $127.91 until the loan is paid in full. The annual percentage rate (the cost of your credit) under this example would be 7.01% when you enter repayment, and the finance charges and administrative fee on the borrowed amount would total $13,272.95. Total payments on this loan would equal $27,972.95.

Option 3: Deferred Principal and Interest While in School

If you borrowed $15,000 for the 1st semester while attending a four year college, and the interest rate is 6.55% on the unpaid principal balance while attending school, and during the first 48 months of repayment, with an increase to 7.30% starting in the 49th month of repayment until the loan is paid in full, an administrative fee equal to 2.0% of the approved amount is deducted from the proceeds, and the loan term is 20 years, then the interest that would be accrued while you are in school would be $4,329.90 and the monthly payment once you enter repayment would be $168.11 until the loan is paid in full. The annual percentage rate (the cost of your credit) under this example would be 7.24% when you enter repayment. This rate is charged on the original loan amount plus accrued interest that was capitalized (added to the loan balance) during the period of deferment. The finance charges and administrative fee on the borrowed amount would total $12,793.79. Total payments on this loan would equal $31,823.69.