What’s New?

Redefining Repayment: The Future of Student Loans

Post author By Aisha Khan
Post date July 24, 2025

Posted on July 24, 2025

Authored by:
Adriana Bland
Deborah T. Poritz Summer Public Interest Legal Fellowship Program, LSNJ

For more information on positive youth development efforts, contact Isaiah Fudge at Ifudge@acnj.org.

Access to higher education has evolved significantly, as doors have opened to welcome students from all walks of life. Institutions that were once only available to the wealthy or elite, are now available to all genders, ethnicities, cultures, and socioeconomic statuses. Increased financial aid, perceptions about the importance of higher education, and flexibility in curriculum and technology have all contributed to increased enrollment in college and graduate school programs. However, these strides may be in jeopardy with HR1. HR1 will significantly impact students’ and families’ decisions about attending college and/or graduate school in the upcoming years. HR1 changes student loan repayment options, sets new borrowing limits, and alters federal financial aid.

Terms to Know:

Student Loans - money borrowed that must be paid back with interest.
Direct Subsidized Loans - a federal student loan where a borrower isn’t generally responsible for paying interest while in an in-school, grace, or deferment period.
Direct Unsubsidized Loans - offers students a low, fixed interest rate and flexible repayment terms. It’s not based on financial need.
Direct PLUS Loans - available to graduate students and parents of dependent undergraduate students for which the borrower is fully responsible for paying the interest regardless of the loan status.
Repayment Options - different ways a borrower can pay back a loan or debt.
Forbearance - allows borrowers to temporarily stop making monthly student loan payments or temporarily make smaller payments for certain situations (financial difficulties, medical expenses, change in employment, other acceptable reasons).
Free Application for Federal Student Aid (FAFSA) - a form required to be eligible for federal student aid (i.e., federal grants, work study, loans) and must be completed every year.
Pell Grants - a federal grant for undergraduate students with financial need, designed to assist students from low-income households.

FAFSA and Pell Grants
Starting in 2024, students and families who were completing the FAFSA were required to list certain assets (i.e., family farms, fishing enterprises, small businesses, etc.). As of July 1, 2026, these assets will no longer be part of the federal financial aid eligibility calculation, making it easier for some individuals to qualify for aid.

Another change under HR1 will greatly impact Pell Grants. The Federal Pell Grant program is the largest federal grant program available only to undergraduate students who demonstrate exceptional financial need on their FAFSA. Unlike loans, Pell Grants typically do not need to be repaid. Also, award amounts tend to change yearly–for the 2025-2026 award year, students could receive a maximum of $7,395. Under HR1, the use of Pell Grants has been expanded, allowing individuals to use their award money for non-degree programs, such as job training, at accredited institutions starting July 1, 2026. While this change expands access to the workforce for low-income students, if a school awards a student financial aid that equals or exceeds the cost of attendance, that student will not receive the Pell Grant.

New Borrowing Limits
Both graduate students and their parents will be limited in how much money they can borrow for student loans. Before HR1, students and their families could borrow up to the school’s cost of attendance, minus other financial aid received. The use of the federal Grad PLUS loan program and federal Parent PLUS loan program made college and graduate school more accessible. However, effective July 1, 2026, parents will only be able to borrow $20,000 per year, at a lifetime cap of $65,000 per student. Additionally, the Grad PLUS program will no longer accept new borrowers and will impose caps. For professional school degrees, borrowers will be limited to $50,000 per year and $200,000 total (not including undergraduate debt). For other graduate degrees, the cap will be $20,500 per year and $100,000 total, also not including undergraduate debt. For graduate student borrowers this is especially troubling as little financial aid is often available for graduate school. Taking away the Grad PLUS program makes it more difficult for graduate students to afford tuition and/or living expenses.

Student Loan Repayment Options
HR1 will streamline student loan repayment options, however, borrowers may pay more than before. Beginning on July 1, 2026, borrowers will have the choice between a “refashioned” standard repayment plan or the Repayment Assistance Plan (RAP). The standard repayment plan requires fixed payments that are made over a term of years based on the amount of the loan. The larger the loan, the longer the term; with payments ranging from 10 to 25 years. RAP is most similar to what some borrowers know as the Income-Driven Repayment (IDR) plan, tying payment amount to a borrower’s adjusted gross income. These payments will range anywhere from 1% to 10%, while previously existing IDR plans will cease to exist for new borrowers.

HR1 also eliminates the Saving on a Valuable Education (SAVE) plan, the Biden-Era repayment plan that was the most affordable option for many borrowers. Almost 8 million student loan borrowers are currently under this plan which will be defunct starting August 1, 2025. Under SAVE, payments were based on 5% of a borrower’s income. Now, with the repayment plan changes, some borrowers will not be able to afford their payments. Further, HR1 eliminates loan deferments for individuals experiencing economic hardship and unemployment and decreases how long students can be in forbearance from 12 to 9 months.

Current students and those assessing higher education affordability must stay on top of their loans and further information about how student loans will be impacted by HR1. Low-income students, and those of color especially, may see significant reductions in access to college and graduate school. While students will still have access to private loans, these loans often have much higher interest rates, reduced protection for borrowers, and sometimes require certain credit scores. One thing is for sure, borrowers will be forced to make tough choices regarding their degrees.

Stay informed on our state and federal budget advocacy.

Alert: State Budget Shortfall Cuts Child Care Access For Thousands of Families

Post author By Eloisa Hernandez-Ramos
Post date July 23, 2025

Posted on July 23, 2025

ACT NOW

SIGN PETITION: Calling for a special New Jersey legislative session to address the child care budget shortfall.

Thousands of New Jersey families will not have access to child care assistance due to a $30 million funding gap in the state budget that went into effect Aug. 1, 2025.

Good news! In November, the State announced a limited re-opening of child care assistance applications. Read more.

$30M

State Budget Shortfall

387 Days

Since Changes Took Effect

6%

Higher Co-Payment Rate

∞

New Applications Paused
*Limited re-opening announced in Nov.

You may have heard about the recent changes to New Jersey’s Child Care Assistance Program (CCAP), which is administered by the Department of Human Services, Division of Family Development (DFD), and distributes subsidies to providers through their local Child Care Resource and Referral (CCR&R) agency. This is the result of a $30 million state budget shortfall needed to fully fund the program.

These changes are devastating but your voice still matters. While the state budget has been finalized, lawmakers need to hear how it’s hurting your business, your staff, and the families you support.

Read brief on how state's underfunding threatens New Jersey’s child care system, families and economy.

SPEAK OUT NOW! Your stories can spark change and shape future funding opportunities.

Just because changes have been made doesn’t mean they are permanent. You can still make an impact.

Watch Recording: Parents & Providers Speak Out at July 30th East Orange Town Hall

WANT TO DO MORE?

Call or email your State Assemblymembers and Senators today and tell them how these changes affect your program and the families in your care.

Find your legislators

Email your legislators

📣 Encourage parents to speak up too. Volume and personal stories matter.

Download and Share a factsheet for parents

Download and Share a factsheet for Providers

📝 ACNJ would like to hear about parents' and child care providers' experiences accessing the New Jersey Child Care Assistance program to understand the challenges they face and inform our advocacy efforts.

Child Care Providers: Share your story with ACNJ

Parents: Share your story with ACNJ

Key changes that will significantly impact both providers and families across New Jersey starting August 1, 2025:

Co-Payment Increases:

New co-payments will take effect for families starting August 1, 2025, at the time of redetermination.
Most full-time co-pays will be around 6% of a family's income, although actual amounts will vary.
- Families under 100% FPL will continue to have no co-pay.

No Changes for:

- Children from families receiving Work First New Jersey (WFNJ) cash assistance.
- Children involved in child protective services or post-adoption services.

Application Closure:

DFD will pause new applications and additional child applications for CCAP starting 11:59 PM on July 31, 2025.
Applications received before the deadline will be processed, and payments for all active cases will continue.
The online portal (https://mynjhelps.gov/home) and state child care websites will be updated to reflect these changes (https://www.childcarenj.gov/).

Download Update for Providers

THIS REDUCTION IN SERVICES IS A DIRECT RESULT OF INSUFFICIENT FUNDING IN THE STATE BUDGET

The final New Jersey state budget did not include the additional $30 million needed to fully fund the Child Care Assistance Program (CCAP) and continue accepting new families. While CCAP received an $80 million increase, this fell $30 million short of what was required to maintain open enrollment and serve additional children from existing families.

It is essential to note that this additional funding would have been allocated from the state budget, not federal sources.

Unpacking the NJ State FY26 Budget on New Jersey’s Kids and Families

Post author By Lana Lee
Post date July 16, 2025

Posted on July 16, 2025

Highlights of FY26 State Budget Spending on Children and Families

The State Fiscal Year 2026 Budget was approved by the Legislature and signed into law by Governor Murphy before the June 30th deadline, with total appropriations of $58.8 billion and a projected surplus of $6.7 billion. The budget allocates resources, programs, and services that will benefit New Jersey residents in the upcoming year.

Advocates for Children of New Jersey (ACNJ) engaged throughout the process, advocating for critical investments that support children and families. Below are key highlights.

Child Care

$565.8 million in the NJ Child Care Assistance Program to help low-income families cover the cost of child care for children ages 0 - 13.

Public Preschool Expansion

$34.6 million in new funding to expand free, universal pre-K across New Jersey communities.
$10 million specifically to help launch new preschool programs.

K-12 Education

Fully funds New Jersey’s schools under the School Funding Reform Act (SFRA) for the second year in a row, with an additional $386 million in aid for FY 2026—the largest school aid contribution in state history.
$3 million in incentive grants to help school districts transition to phone-free learning environments, supporting academic success and student well-being.
$7.5 million in new grant funding for school districts to provide high-impact tutoring for students needing extra academic support.

Hunger and Food Insecurity

$30 million to maintain a minimum monthly $95 in SNAP benefits for approximately 40,000 households.
$85 million in aid for the state’s food banks and emergency feeding organizations.

Maternal Health

$10 million to ensure State employees can take parental leave at full pay to care for a newborn.
Nearly $36 million to expand Family Connects NJ, offering free home visitations for postpartum mothers and newborns.
Over $50 million—the single largest investment in New Jersey history—for women’s health care programs beyond state-sponsored insurance. This will provide safety-net family planning services, upgrade family planning facilities, and grow the reproductive health care workforce.
$5.2 million for the newly created Maternal and Infant Health Innovation Authority.

Child Health

Continued funding for Cover All Kids and NJ FamilyCare, projected to provide free health insurance coverage to up to 867,000 children.

Mental Health

Building a statewide system of mental health resources with $43 million for the NJ Statewide Student Support Services (NJ4S) Network.

Positive Youth Development and Other Supports

Approximately $20 million to maintain the Alternative Responses to Reduce Instances of Violence and Escalation (ARRIVE) Together program, which pairs police officers with mental health professionals when responding to mental health crises.

ACNJ will continue to provide post-budget updates as additional information becomes available. Stay tuned!

Governor Phil Murphy signed significant legislation to expand access to early childhood education on July 11, 2025.

“I Need to Go to Work, But I Can’t Find Child Care!”

Post author By Eloisa Hernandez-Ramos
Post date July 11, 2025

Posted on July 11, 2025

Cindy Shields
Senior Policy Analyst for Early Childhood Education

This is a common cry across the country, and New Jersey is no exception. Families are struggling to find quality child care, and when they do, the cost is often unaffordable. What’s driving this crisis, and how do we begin to fix it?

A Broken Market

In other industries, companies might cut staff or raise prices to cope. But in child care, cutting staff isn’t an option due to licensing regulations. You need ample staff to maintain safe and nurturing learning environments. And raising tuition? Many families are already financially stretched to the limit.

Worse yet, there's no room to trim wages. Early educators, mostly women and disproportionately women of color, earn less than dog walkers, with a national average of just $15.41/hour according to the U.S. Bureau of Labor Statistics. Burned out and underpaid, many early care educators are leaving the field for less stressful, better-paying jobs in retail or warehouses. That means fewer open classrooms, longer waitlists, and even more pressure on parents trying to access and afford child care.

Let's make children and their
families the center of the
2025 Election Campaign.

Partner with us!
Engage with candidates!

The Cost of Child Care to Families

Wages account for about 80% of a child care center’s budget, leaving razor-thin margins to cover everything else. The pandemic pushed the child care industry past its breaking point.
Today, New Jersey families face impossible choices. The average cost of center-based care is:

$20,213 per year for an infant
$19,448 per year for a toddler

For a dual-income family earning the NJ average of $167,018, that’s 12% of their income; more than they might spend on housing or even college tuition. For a single parent earning the state average of $44,800, child care eats up 45% of their income.

NJ working class left behind high child care costs

By comparison, the U.S. Department of Health and Human Services recommends that families spend no more than 7%of their income on child care. Clearly, something is wrong.

A Squeeze on the Middle Class

In New Jersey, only families earning approximately $300,000 or more can afford the average annual cost of center-based infant care—about $20,000—without spending more than 7% of their income.

For families earning less than 185% of the federal poverty level (roughly $64,300 for a family of four), the New Jersey Child Care Assistance Program offers vital help covering child care costs for children up to age 13.

But New Jersey’s working middle class is being left behind. These families earn too much to qualify for assistance, yet far too little to absorb the staggering cost of child care. They’re falling through the cracks.

The burden often lands hardest on mothers, many of whom are pushed out of the workforce entirely. Parents are forced into impossible choices: pay for housing and food, or pay for child care. Too often, they are working multiple jobs just to get by, with no good options in sight.

Child Care Is Essential Infrastructure

New Jersey’s economy cannot function without child care. Without a stable child care system, the workforce suffers, and so does the economy.

But here’s the good news. By investing in early care and education, New Jersey could save upwards of $3.6 billion annually. With a return on investment of $7–$13 for every dollar spent, child care is not just a moral imperative; it’s a smart financial strategy.

Our children deserve safe and enriching child care environments with well-compensated educators. Our working, economically contributing families deserve choices, not compromises.

This Election Year: Ask the Candidates
As we head to the polls, child care must be a central issue in every candidate’s platform. We urge every voter to ask:

What will you do to ensure equitable access to high-quality early care and education for all working families in New Jersey?
How will you support the child care workforce to ensure they are qualified, respected, and fairly compensated?
What policies will you champion to preserve and grow options for families, especially given the challenges child care providers face today?

New Jersey’s children, families, and economy are depending on it.

Read our latest updates on maternal and infant health.

Governor Murphy’s Historic Early Childhood Education Legislation Marks Critical Progress with Room for Improvement

Post author By Eloisa Hernandez-Ramos
Post date July 11, 2025

Posted on July 11, 2025

UPDATE: New Jersey Universal Preschool

This week, Governor Murphy signed significant legislation expanding access to early education, addressing several policy priorities ACNJ has long advocated for, while also leaving areas of opportunity for further improvement.

The centerpiece legislation (S3910/A5717) codifies New Jersey's preschool funding formula into statute, strengthening and sustaining the state’s pre-K expansion effort, while also setting the course to provide full-day kindergarten by 2030. This represents the culmination of decades of advocacy, beginning with ACNJ’s involvement in the Abbott v. Burke Supreme Court decision more than 25 years ago, which mandated high-quality public preschool for children in high-poverty districts.

The other two bills include:

The authorization of three-year contracts between school districts and community childcare providers, providing much-needed stability for community providers (S4476/A5780).
Amendments to the Fiscal Year 2026 Appropriations Act, updating various language provisions concerning Preschool Education Aid to align with legislation (S3910/A5717) that modifies the allocation of Preschool Education Aid ( A5908/S4695).

Governor Phil Murphy signed significant legislation to expand access to early childhood education on July 11, 2025.

Key Provisions Aligned with ACNJ Priorities

Ensuring Universal Preschool Expansion: The law codifies annual preschool expansion grants and revises preschool education aid requirements, providing the predictable investment our early learning system needs to thrive.
Enhanced Stability for Providers: Recognizing that community-based providers are essential partners, the legislation extends contract terms from one to three years. Multi-year contracts makes it easier for providers to secure funding for facility upgrades and new program start-up costs, as well as planning. The previous one-year contract agreements created uncertainty about program continuation, not knowing if they would be renewed another year. Extended contract terms now offer the stability needed for meaningful facility investments and stronger partnerships.
Comprehensive Coordination: The legislation also addresses the fragmentation ACNJ has long identified as a barrier to effective preschool delivery, improving coordination and transparency by:

- Establishing a Universal Preschool Implementation Steering Committee with representatives from key State agencies and the Legislature.
- Requiring the Departments of Education, Children and Families, and Human Services to maintain and annually update public information on preschool and child care providers.
- Mandating annual reports to the Legislature on the status of preschool education and the effectiveness of the mixed-delivery model.
- Directing State agencies to publish guidance on expanding access to high-quality preschool in high-need areas.

ACNJ thanks Governor Murphy for keeping his promise to expand early education to New Jersey’s youngest learners. Since taking office, 229 districts have been added to state-funded preschool programs. And more recently, in February 2025, the state announced that the Department of Education and Department of Children and Families would amend their rules to align state-funded and licensed child care centers to the same minimum space requirement of 42 square feet of usable space per child. This critical regulatory change, which ACNJ has long advocated for, removes a significant barrier that often prevented child care providers from participating in preschool expansion.

New Jersey’s public pre-K program is a nationally recognized model, demonstrating the profound impact of quality early education. Research by the National Institute for Early Education Research confirmed that students who attended Abbott preschools continued to excel through 10th grade, with a 15% reduction in grade retention and 7% decrease in special education placements.

Critical Gaps That Require Continued Attention

Although this legislation is a big step forward, the state can still do more to build a stronger, comprehensive early education system.

We know that a robust mixed-delivery model -public schools partnering with community child care centers- is essential to meeting the diverse needs of families. However, the legislation stops short of mandating it. Declining participation by private child care providers threatens the viability of the broader early care and education system. In former-Abbott districts, enrollment in the community decreased by 25% from 2009 to 2022, while in expansion districts, only 17% of preschoolers are served by private providers. The loss of preschool-aged children from community-based centers threatens the entire birth-to-five system by undermining the financial viability of infant and toddler care. This creates "infant toddler care deserts" that ultimately harm working families and the broader economy.

In addition, the legislation does not establish the pathways and timeframes to help existing early childhood educators meet the certification requirements, potentially exacerbating the teacher shortage crisis.

Conclusion

ACNJ commends Governor Murphy, Senate Majority Leader Ruiz, Assemblywoman Katz, and all the legislative sponsors for their leadership. As we work toward implementation, ACNJ remains committed to ensuring this legislation achieves its full potential by strengthening the mixed delivery system that serves as the backbone of quality early childhood education in New Jersey.

The promise of universal preschool is within reach. With continued advocacy and thoughtful implementation, New Jersey can build an early childhood system that truly serves all children and families.

For more information on this topic, contact Winifred at wsmith-jenkins@acnj.org.

Read our latest updates on preschool expansion.