State of New Jersey
Office of the State Treasurer
PO BOX 002
Trenton NJ 08625-0002

P.L. 2001, c5 (N.J.S.A. 52:14B-4) requires an agency to give notice of its intended action to the news media maintaining a press office to cover the State House Complex prior to the proposal, amendments or repeal of any rule.

The New Jersey Department of the Treasury, Office of the State Treasurer is proposing rules for readoption (Proposed Rule No. PRN 2008-360) regarding the offset of State lottery prizes to satisfy defaulted Federal and State student loans. The notice for readoption will be published in the November 3, 2008 edition of the New Jersey Register. The public comment period for these proposals will be extended to 60 days in order to qualify the notice for an exception to the rulemaking calendar requirements set forth in N.J.S.A. 52:14B-3 and N.J.A.C. 1:30-3.3(a)5. Written comments on the proposed readoptions with amendments may be submitted by January 2, 2009 to:

Kaitlyn Adams
Office of the State Treasurer
State House
PO Box 002
Trenton , NJ 08625-0002
kaitlyn.adams@treas.state.nj.us

The New Jersey Department of the Treasury, Office of the State Treasurer has reviewed the proposed readoption and has determined it to be necessary, reasonable and proper for the purposes for which it was originally promulgated, pursuant to Executive Order No. 66 (1978).

Pursuant to N.J.S.A 52:14B-5.1c, Offset of State Lottery Prizes to Satisfy Defaulted Federal and State Student Loans (N.J.A.C. 17:43) are scheduled to expire on April 2, 2009. The Office of the State Treasurer has reviewed the rules and has determined them to be necessary, reasonable and proper for the purposes for which they were originally promulgated, as required by Executive Order No. 66 (1978).

The notice in the New Jersey Register indicates that the rules proposed for readoption will enhance the ability of the State to identify and recover offsets to State lottery prizes to satisfy defaulted Federal and State student loans . The recovery of student loan payments will have a significant social impact on students who are eligible for these loans. Defaulted student loans negatively impact access to low cost student loans since the Federal government has to increase Federal spending to cover the costs of defaulted student loans, and since the State student loan program will have less to lend to students if it has to use bond proceeds to cover the costs of defaults.

Continuing these rules will enhance the ability of the State to continue to collect defaulted Federal and State student loans and therefore, providing the State another collection tool can help safeguard the student loan funds that facilitate access to higher education. N.J.A.C. 17:43 implements the provisions of N.J.S.A.5:9-13.10 through 13.16, which provides for an offset against State lottery prizes in excess of $1,000 for defaulted student loans.

The current rules are divided into eleven sections. These rules provide for a match of lists of winners of lottery prizes in excess of $1,000.00 with lists of individuals who are in default of student loans. The match has been based on lists maintained by the Division of State Lottery and HESAA (Higher Education Student Assistance Authority) in the Department of the Treasury. No lottery prize in excess of $1,000.00 is disbursed until a comparison has been made and a resolution of the debt is satisfied.

If a match is found, HESAA is required to notify the lottery winner that payment of the prize is being withheld and that the individual may request a hearing on the debt. If the individual does not request a hearing, the lottery prize will be applied to the debt prior to the disbursement of the remainder of the lottery prize. If the individual requests a hearing, the resolution of the hearing process will determine whether or not the lottery prize will be applied to the debt. If the defaulted loan is subject to a judgment, the lottery prize will be applied to satisfy the judgment prior to the disbursement of the remainder of the lottery prize. If the debtor appeals the judgment, the resolution of the appeal will determine whether or not the lottery prize will be applied to the debt.

A complete copy of the notice can be found in the New Jersey Register and the full text of the current rule may be found in the New Jersey Administrative Code at N.J.A.C. 17:43 available in the reference section of most local libraries and on the Lottery website http://www.state.nj.us/lottery/general/6-4-0_rules_regs.htm. A complete copy of the proposed readoption with amendments notice can also be found on the Lottery website http://www.state.nj.us/lottery/general/6-4-0_rules_regs.htm and on the Treasury website http://www.state.nj.us/treasury or by calling Kaitlyn Adams at (609)292-5908.

See the complete copy of the Proposed Readoption: N.J.A.C. 17:43 - Offset of State Lottery Prizes to Satisfy Defaulted Federal & State Student Loans