Pay It Forward loan program for job training: No-interest, no-fee and possibly no need to pay it back

Murphy, N.J. CEO Council announce details of innovative initiative aimed at creating more pathways to middle-class careers

Creating pathways to middle-class jobs for those who are not meant for college — or those who can’t afford it — has been a top priority of Gov. Phil Murphy since he took office.

On Monday, Murphy and the New Jersey CEO Council he created announced the New Jersey Pay It Forward Program — an initiative that will provide interest- and fee-free loans from a revolving fund to support low‐income New Jersey career seekers participating in approved training programs. The loans, in some instances, may not need to be repaid.

New Jersey is believed to be the first state in the country to dedicate public resources to a fund of this nature.

The program is a direct result of the council’s October 2020 pledge to hire or train more than 30,000 New Jersey residents from underrepresented communities of color and other underserved communities by 2030. At the time, the council challenged the rest of New Jersey’s corporate community to train or hire an additional 40,000 workers.

In line with this commitment, CEO Council members have pledged to contribute grants to the Pay It Forward Program, and the state plans to add to this commitment with a grant of approximately $5.5 million in fiscal year 2022.

Here’s how the Pay It Forward program will work:

  • The program will provide zero-interest loans and grants to students who are enrolled in non-degree credential and certificate programs at approved training providers;
  • The program will focus on helping students enrolled in short-term training programs that offer high-quality, industry-recognized credentials and certificates in high demand fields;
  • Participants will not be required to make any repayments until they have successfully completed the training program and their income exceeds a specific level.
  • The loans will feature an income-based repayment model that calculates affordable monthly payments as a percentage of participants’ discretionary income and requires no payments when participants’ post-training income falls below a certain threshold, enabling trainees to support their families without incurring unmanageable debt.
  • If repayment is not complete five years after the participant completes the training program, the remaining balance will be forgiven.

Eligible recipients of Pay It Forward loans include New Jersey residents who are receiving public assistance, people who have been unemployed long-term, individuals who were formerly incarcerated, workers who have been temporarily or permanently laid off because of the COVID-19 pandemic and self-employed individuals who became unemployed or underemployed as a result of the COVID-19 pandemic.

Pay It Forward loans only will be used for state-approved training programs that undergo a rigorous screening process and demonstrate a strong track record of successfully preparing students for in-demand career opportunities.

The review and selection of high-quality training providers will build on the state’s participation as an inaugural grantee of the Data for the American Dream initiative, led by the New Jersey Department of Labor & Workforce Development, which is developing an interactive website containing smart disclosure tools designed to help career seekers make informed decisions about training.

Participants in the program will receive wrap-around services, such as help with child care and transportation needs, as well as stipends to support their living expenses, and they will not be required to repay these non-tuition costs.

Program officials say this is possible because the Pay It Forward Program is not designed to turn a profit. Unlike similar private funding mechanisms, the expenses that are repaid by trainees receiving Pay It Forward loans will recycle back to support the next round of training for their fellow New Jersey residents.

Murphy said the program is needed now more than ever.

“As we emerge from the COVID-19 pandemic, it is crucial that we remain focused on building a stronger, fairer New Jersey economy,” he said in a release. “The New Jersey Pay It Forward Program will play a key role in achieving this goal by opening up new opportunities for New Jerseyans who have been shut out of good, family-sustaining jobs in the past.

“I am excited to partner with the members of the New Jersey CEO Council to launch this first-in-the-nation program that will bolster New Jersey’s recovery from COVID-19 and set the stage for long-term, equitable economic growth.”

The New Jersey CEO Council arose from meetings of the governor’s Restart and Recovery Commission, named in April 2020 to advise the administration on the safe reopening of the state’s economy.

The council is made up of the CEOs of BD, Campbell Soup Co., Johnson & Johnson, Merck, Prudential Financial, Public Service Enterprise Group, RWJBarnabas Health, Verizon and Zoetis.

Earlier this month, the Higher Education Student Assistance Authority issued a Request for Proposals for a program manager to establish and administer the Pay It Forward Fund, which will be seeded with grants from the state and outside donors. Proposals are due Thursday, July 1, 2021. The RFP can be downloaded at