Here is the announcement on the HESAA website.
Here is a link to the bond prospectus which was issued in late May.
Here are some of the details found in the prospectus:
- Offering size is $450 million. NJ Higher Education Student Assistance Authority (HESAA) had raised $350 million in August of 2008.
- Through March of 2009, HESAA has originated $1.85 billion in NJCLASS loans to 174,000 students.
- Pilot program to begin for medical/dental students with $5.0 million allocated to the program (p. 36 of prospectus)
- Interest rate on the Fixed Rate NJCLASS loans will be "fixed based on market rates at the time of issuance and will increase by 0.75% (75 basis points) beginning with the borrower's fifth year of principal repayment (p.42)."
- Administrative/application fee of up to 2% will be deducted from loan proceeds.
- Borrower or cosigner must have FICO of 670 or greater
- Minimum income restriction based on the 2009 Federal Poverty guideline for family of four is $22,050
- Those with FICO score between 570 and 669 must meet "a detailed satisfactory credit history review as reported on a standard credit report."
- Pay principal and interest within 60 days of disbursement (Option 1)
- Make quarterly interest payments while in school and thereafter principal and interest on monthly basis (Option 2)
- Defer interest and principal while in school and thereafter principal and interest payments made on monthly basis (Option 3). Note that interest is capitalized and added to the loan principal on annual basis.
- In 2001-02, the program originated $83.7 million in loans vs. $370.9 million for 2008-09, a 343% growth rate. Average borrower indebtedness grew from $9,030 to $13,188 over the same period.
- Table also provides originations by month which indicates the strong seasonality during the peak lending months of June-September. Most borrowers seem to request loan funds they will need for the year as the originations in December and January are insignificant compared with the summer peak months.
The bond offering is expected to close later this month. I will provide pricing information once it becomes available.