Student Loans
Ralph Frammolino correctly identifies California’s shortcomings at pursuing delinquent loans (“U.S. Seeks Refund for Deadbeat Students,” Aug. 4). But delinquent student loans are just the tip of California’s iceberg of debt.
A new report compiled by my office and the Franchise Tax Board found $6 billion in outstanding debt--including defaulted student loans--exists throughout the state. Rather than fix the problem in a piecemeal fashion, I am recommending legislation to empower the Franchise Tax Board as the central debt collection agency for cities, counties and state agencies.
Eight other states have already taken that step and increased their debt collection an average of 25%. A similar result in California would yield $1 billion of additional revenue.
A centralized agency to crack down on deadbeat debtors should replace the current system, in which virtually every agency at every level of government is responsible for collecting its own debt.
It is worth noting that nearly 90% of student loan recipients make good on their repayment promise. However, poor collection of defaulted student loans reduces the number of students who can borrow money to finance their education.
GRAY DAVIS
State Controller, Sacramento
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