A&B Summary: As we have previously discussed, effective November 27, 2019, Senate Bill 1149 (2019 NJ Laws 200) (the “Act”) creates the New Jersey “Student Loan Bill of Rights” and prohibits anyone “from acting[ing] as a student loan manager, directly or indirectly, without having previously obtained a license ”from the Department of Banking and Insurance (“ DOBI ”).

Although the law came into effect in 2019, the DOBI did not provide an application or an application mechanism to apply for a New Jersey student loan manager license in 2019. The DOBI recently issued guidelines on the application process and operational requirements for those wishing to serve students. loans in New Jersey.


On September 1, 2020, the DOBI published Bulletin n ° 20-31 (the “Bulletin”), which provides license application procedures. DOBI will begin accepting license applications from all individuals on September 15, 2020. The application must be submitted through the National Mortgage Licensing System (“NMLS”).

Individuals currently acting as student loan managers in the state who submit license forms before the close of business on December 31, 2020 may continue to function as student loan managers, pending approval by DOBI license forms. All student loan managers who are not exempt from licensure must submit all licensing requirements by December 31, 2020.

License types

The Act creates two distinct types of permits. The New Jersey Student Loan Servicer license is required for those who administer student loans other than Federal Contracted Student Loans (“FCSL”). A federally contracted student loan license is required for individuals administering student loans under a contract awarded by the United States Secretary of Education under 20 USCS 1087f.

Persons serving FCSL will automatically be issued a limited and irrevocable license, after having adequately demonstrated their eligibility. Those who manage FCLS and non-FCLS student loans are required to obtain both a federally contracted student loan license and a New Jersey student loan manager license, and must comply with all applicable requirements. to both types of license.


As noted above, the licensing requirement of the Act does not apply to: (1) any state or federal chartered bank, savings bank, savings and loan association, or cooperative credit ; (2) any wholly owned subsidiary of a bank or credit union; and (3) any operating subsidiary where each owner of the operating subsidiary is wholly owned by the same bank or credit union.

New Jersey Student Loan Service Application

Individuals seeking a New Jersey student loan manager license must complete a license application through the NMLS. Among other application requirements, applicants must submit:

  • A non-refundable license fee of $ 5,000;
  • A non-refundable investigation fee of $ 500;
  • A bond in the amount of $ 30,000 plus an additional $ 30,000 per branch;
  • A financial statement showing a net worth of $ 250,000 prepared by a CPA or a public account dated within 90 days of the end of the applicant’s fiscal year;
  • A business plan; and
  • A property table.

Beginning in 2021, all student loan manager licenses will expire at the close of business on December 31 of each year. Renewals will be processed by the NMLS.

Federal contract student loan manager license application

As noted, applicants providing FCSL service must apply for a license to engage in student loan service under a contract awarded by the Secretary of Education. Applicants must complete a license form and submit it through the NMLS. Applicants must submit:

  • A non-refundable license fee of $ 5,000;
  • A certificate indicating that the person manages student loans under a contract awarded by the Secretary of Education. The certification must be signed and sworn under oath before a notary public;
  • For those who only manage federal contract student loans, a bond in the amount of $ 30,000, plus an additional $ 30,000 for each branch. Those who manage both federal contract student loans and student loans of any other type seeking both license types are only required to obtain one bond in the amount of $ 30,000.

Operational requirements and penalties

The Bulletin covers the operational requirements of all student loan officers. Among other operational requirements, all student loan managers (regardless of license status) must: (1) keep records; (2) file an annual report with the DOBI, containing information on matters conducted during the previous calendar year; and (3) comply with all DOBI investigations and reviews.

The Bulletin notes that the DOBI Commissioner may suspend, revoke or refuse to review the license of license holders who violate the Act. In addition, the Commissioner has the power to bring a civil action against anyone who violates the Act and can request a fine of more than $ 10,000 for the first offense and $ 20,000 for the second offense and each subsequent offense.

The Act also created a private right of action for borrowers who suffer a verifiable loss of money as a result of the use or employment by a student loan officer of any method, act or practice declared illegal in under the law. Borrowers are entitled to terrible damages as well as reasonable attorney fees, filing fees and prosecution costs.


Those currently managing student loans in New Jersey should be prepared to submit a license application when the license application becomes active on September 15, 2020. Anyone currently engaged in the New Jersey student loan service should apply before December 31, 2020, or risk in an unauthorized activity after that date. Applicants should ensure that if they are serving FCSLs, they apply for both types of license.

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