New Jersey Student Loan Servicing Licenses Now Available


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The licenses, required under legislation approved in 2019, are due by the end of the year and will be issued starting in January 2021.

9/15/2020 15:00

The New Jersey Department of Banking and Insurance applications for student loan servicing licenses are now available online and applications are due by Dec. 31, 2020.

The department has issued a bulletin on the new license applications, which are required by the New Jersey “Student Loan Bill of Rights” that took effect in November 2019.

“On Sept. 15, 2020, the department will begin to accept license submissions from all persons subject to the act’s licensing requirements, through use of the Nationwide Multistate Licensing System,” according to the bulletin. “The act also imposes various regulatory obligations on student loan servicers, including entities that are exempt from the licensure requirement, and provides the department with the appropriate investigative, examination and enforcement authority to implement the regulatory framework.”

Under the legislation, the department will also appoint a student loan ombudsman to help student loan borrowers with understanding loan agreements and dispute resolution.

The license requires a $5,000 application fee with a $500 investigation fee. Renewal fees are the same amount as the application fees.

Applicants must also obtain an electronic surety bond (ESB) from a surety company authorized to transact business in New Jersey. The amount of the surety bond must be $30,000, plus an additional $30,000 for each branch office of the applicant. The ESB applications are available Oct. 15; however, companies may still apply for their license and obtain the ESB once it becomes available.

Student loan servicing licenses will have to be renewed on an annual basis and servicers licensed in New Jersey and those exempt from the licensing requirements will need to keep records of all student loan education reports for two years after payoff or assignment, whichever occurs first.

Current student loan servicers in New Jersey that submit license applications before close of business on Dec. 31, 2020, may continue to operate as student loan servicers pending the Department of Banking and Insurance’s approval of the license forms.

Read the complete bulletin for more guidance on student loan servicing requirements.

For more information on how the ACA Licensing staff can assist with your licensing needs, please contact us at [email protected] or call (952) 926-6547.