Student Loan Forgiveness Program

Acting Governor Richard J. Codey yesterday introduced legislation that establishes a plan to forgive up to $20,000 in student loans for new college graduates who enter the social service industry.

The Acting Governor announced the initiative in his State of the State address last month.

“If we can’t retain quality people, then we can’t provide quality care,” said Codey. “This plan helps us attract and retain the best and the brightest and will ensure that our most vulnerable citizens receive the first-rate help they deserve.”

Codey made his remarks during a visit to Prospect House in East Orange, where he was joined by the chairman of the state’s Mental Health Task Force Robert N. Davison and Rutgers University-Newark senior Bettina Harp.

“Recruiting and retaining qualified staff, especially at the entry level is a serious problem in the mental health field,” said Davison, also the executive director of the Mental Association of Essex County and Chief Executive Officer of Prospect House. “High staff turnover rates affect our ability to provide decent care to our consumers. Governor Codey's loan forgiveness proposal is a giant step in the right direction. It’s the right medicine for mental health."

Under the plan, the state would forgive up to $5,000 in student loans a year for four years for college graduates who work at a state, county or state-contracted nonprofit mental health or development disability facility in New Jersey. To be eligible, students must have successfully completed the first year of full-time employment as a staff member at a qualifying provider.

“Governor Codey's loan forgiveness program is a wonderful idea,” said Harp, president of the Social Work Student Organization at Rutgers. “It will encourage students to enter, and more importantly stay in the social service field. Many graduating seniors have thousands of dollars of student loans. The Governor’s proposal will decrease our financial burden and allow us to do the work we were educated to do.”

Currently, there are an estimated 1,000 vacancies in the state’s mental health industry that need to be filled immediately. Overall, the industry accounts for more than 11,000 jobs statewide.

In New Jersey, the average starting salary for social service and mental health professionals is $25,000.

In addition, according to the U.S. Bureau of Labor Statistics, 71 percent of all social service professionals are women. Their average salary is $30,108 – $4,000 less than their male counterparts.

Thirty-eight percent of recent college graduates working in community-based provider agencies leave their job after one year largely because they have difficulty paying their college loans.

A long-time mental health advocate, Codey in November signed an executive order establishing the Task Force on Mental Health, which will recommend ways to better help the mentally ill lead normal lives.

Codey also proposed in his State of the State speech the creation of a $200 million housing trust fund to provide affordable housing for the mentally ill and announced plans for an education campaign on postpartum depression. In addition, Codey said he would work with the Legislature to make New Jersey the first state in the nation to offer free mental health screenings for uninsured new mothers.

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Author: Press Release--Office of the Governor