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Davis, California

Saturday, September 25, 2021

State representatives, students promote four student debt bills

A press conference was held on the South Steps of the State Capitol on April 8, where State Representative Bob Wieckowski (D-Fremont), State Controller John Chiang (D-Torrance), members from the California State Student Association (CSSA) and other California higher education students expressed support for several bills focusing on reducing the $1 trillion student loan debt. There were around 150 people in attendance with five speakers.

According to College Board Trends in Student Aid for 2011-12, undergraduate students received an average of $13,218 per full-time equivalent (FTE) student in financial aid, including $6,932 in grant aid from all sources and $5,056 in federal loans. In addition, students borrowed about $8.1 billion from private, state and institutional sources to help finance their education.

Wieckowski’s four bills — Assembly Bill (AB) 233, AB 391, AB 534 and Assembly Joint Resolution 11 — use a dual approach to the student debt issue that focuses on preemptive financial literacy education as well as alleviating the financial stress from paying off student loans for graduates, according to Wieckowski.

Student Bill of Rights
AB 233 was approved by the State Assembly on April 11 with a vote of 50-22 and will go to the State Senate. The other bills are still moving through the Legislature.

AB 233, also known as Student Loan Wage Garnishment, would require creditors to work out a repayment plan with debtors to prevent a maximum of 25 percent of a student’s disposable income garnished by a creditor.

AB 391, also known as the “Common Cents Curriculum,” would increase financial literacy by adding economics curriculum standards to K-12 education.

AB 534, the “Know Before You Owe” bill, would require entrance and exit loan counseling to students and would be applied to all private loans.

Assembly Joint Resolution 11, the “Financial Fresh $tart Act,” would allow students to file for bankruptcy for private loans.

Information about the assembly bills was compiled from the Student Bill of Rights package summary.

“This is a crisis that is getting worse. A college education is supposed to improve your financial security, not destroy it. That is why I have introduced a Student Bill of Rights,” Wieckowski said in a released statement.

Progressive support needed
Supporters at the rally said there needs to be change soon before the student debt issue worsens.

“We are one small recession from the student debt being an urgent issue again. What we saw from 2006-08 in terms of the banks’ practices in private student loans didn’t ease up when the economy got better in the way health loans got better, so all the practices are still there waiting,” said rally volunteer and former instructor at UC Santa Cruz Tamara Belknap.

The bills are supported by the CSSA, a nonprofit student association governed by a student board of directors composed of the officially recognized representatives of each of the 23 CSU campuses that address issues affecting students statewide and system-wide. There were around 100 CSSA-affiliated students in attendance at the rally.

“I think Wieckowski’s bills address an important piece of the puzzle,” said CSSA executive director Miles Jason Nevin. “We need to do a better job earlier in student life for financial literacy education. If it’s mandatory in the K-12 curriculum, we should see better financial decisions being made.”

Student advocates from the CSSA spoke at the rally, sharing personal stories of their own experience with private student loans and debt.

“Financial literacy is certainly part of the problem. I think the bills are one way to address the issue but they aren’t going to answer the whole problem. A lot of students don’t understand how debt and the whole financial system works,” said CSSA Vice President of Legislative Affairs Pedro Ramirez.

Ramirez said the bills address the rights issues within California, but the problem stands on a much larger scale.

“It needs to be addressed federally. Student debt is a national issue. That being said, I do think California is leading the way and protecting its students,” Ramirez said.

Challenges accepted
Some individuals foresee some challenges that will come along with Wieckowski’s bills.

“There will be challenges because the bills will require some funding from the public system. [Wieckowski] will have to find resources through the appropriation committee. However, the economic payoff is so much greater that we don’t see it as an expense but rather as an investment to provide students the tools to be conscious consumers,” Nevin said.

The student debt problem is prevalent among UC Davis students as students must deal with private student loans very often. One student shared her experience.

“By the time I graduate, I’ll have $20,000 in loans. It’s something you don’t really think about while you’re in college but as soon as you’re done you have to think: Well, how am I going to pay this back? I had some background on student loans education in high school. My teacher showed us how to calculate compound interest and how to manage funds. I still find it helpful so I support [Wieckowski’s] financial literacy bill,” said third-year environmental policy and planning major Ashley Goldlist.

Supporters of Wieckowski’s bills believe this issue is gaining support and can benefit from widespread student advocacy.

“A call to your local assembly member will truly build a lot of momentum,” Belknap said. “It is astonishing how much attention gets paid to the calls, letters and emails in support and in opposition to bills. I encourage all students to get involved and take part in the decision that will directly affect their futures.”

GABRIELLA HAMLETT can be reached at city@theaggie.org.

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