5. Eligible program participants who entered the program prior to the effective date of P.L.1999, c.46 (N.J.S. 18A:71A-1 et al.), and who seek loans to finance their education shall apply for loans under the Federal Family Education Loan Program. In the event that these participants have borrowed the maximum permitted under the terms of this program but would otherwise be eligible borrowers under this program, they may apply for nonfederal direct loans in amounts not exceeding $10,000.00 per student annually which loans may be renewed for up to a maximum of four academic years for a total loan indebtedness not exceeding $40,000.00 per student. However, the amount of a nonfederal direct loan shall not exceed, in combination with other financial aid, the total educational costs of a participant attending a college or university participating in this program. Nonfederal direct loans will be evidenced by promissory notes and may be secured pursuant to forms established by the Higher Education Student Assistance Authority.

Nonfederal direct loans shall not bear interest or finance charges during the time a student is enrolled as a full-time student in the program or is engaged in approved redemption service pursuant to this act. Nonfederal direct loans shall become due and payable pursuant to section 8 of this act six months after graduation if no redemption contract is in effect, or six months after change to part-time student status, withdrawal from the program, or termination from full-time employment either as a faculty member at a New Jersey college or university or other qualified employment.

L.1984,c.189,s.5; amended 1994, c.48, s.274; 1999, c.46, s.56.