New Jersey Senate Bill S3566

New Jersey 2022-2023 Regular Session

• Introduced: 2/9/23
• Refer: 2/9/23

Caption

Revises calculation of student financial need and provides circumstances for reduction of financial aid at institutions of higher education and proprietary institutions.

Impact

The impact of S3566 on state laws includes significant changes in how financial aid is administered within New Jersey's higher education system. By removing expected family contributions from financial need determinations, the bill is poised to benefit a more diverse population of students, particularly those from lower-income families or who are first-generation college students. The requirement for annual reporting of external scholarship data disaggregated by several metrics further brings a focus on equity and transparency. Institutions will also be obligated to clarify in their financial aid award letters various aspects of financial support, promoting better understanding for students about their aid packages and financial responsibilities.

Summary

Senate Bill S3566 revises the calculation of student financial need for institutions of higher education and proprietary institutions in New Jersey. This legislation aims to streamline the process of financial aid by eliminating the consideration of expected family contributions in determining a student's financial need. Instead, the bill mandates that financial aid calculations focus solely on total costs of attendance. This change is designed to enhance access to financial aid for students by ensuring that external scholarships do not unjustly penalize them by reducing institutional financial aid. Instead, institutions must return excess external scholarship funds to the awarding organization when aid exceeds total financial need, providing these institutions receive permission from the scholarship-giving entity.

Contention

Debates surrounding S3566 may focus on potential challenges regarding university and institutional funding levels, as eliminating expected family contributions could strain resources. Opponents may argue that this shift could lead to difficulties for institutions in balancing their budgets while still serving student needs. Proponents, however, emphasize the need for equitable access to financial support, arguing that the benefits for students far outweigh the fiscal concerns for educational institutions. The legislation's enforcement and the robustness of institutional compliance in adapting to these changes will likely be points of scrutiny and discussion in ongoing legislative and public dialogues.