Surging student loan debt that is “casting a shadow” over current and former borrowers brought the California Assembly Select Committee on Student Debt to UC Irvine for a discussion of the debt issue and efforts being made to support borrowers.
“For borrowers, these really are kitchen table financial issues,” said Assemblywoman Cottie Petrie-Norris (D-Laguna Beach), the committee chairwoman. “From deciding whether to buy a home, which career to pursue, whether to start a family or to save for retirement, student debt is casting a shadow over so many aspects of people’s lives, and the ripple effects are being felt all across our society.”
“This debt is fueling economic, gender and racial inequities and inhibiting asset accumulation and accelerating wealth gaps that are already so pervasive here in California and across the country,” she added.
The meeting included four discussion panels and testimony by current and former students who took loans to attend nonprofit state colleges or for-profit campuses such as technical or arts schools.
The two-hour hearing was co-presented by the Associated Students of UCI, the Consumer Law Clinic at UCI and NextGen Policy, a nonprofit that focuses on clean energy.
It was followed by a free workshop where experts from NextGen Policy, Student Debt Crisis and the Legal Aid Foundation of Los Angeles discussed federal loan repayment options and how to apply for the Public Service Loan Forgiveness Program available to employees of government or not-for-profit organizations.
The hearing came on the heels of the committee’s establishment and appointments in late March.
Student loan debt currently affects 3.7 million borrowers in California who owe about $123 billion, or nearly $33,250 on average, according to the Student Borrower Protection Center, a nonprofit that focuses on alleviating student debt.
Bloomberg reported in February that debt among 19- to 29-year-old Americans exceeded $1 trillion at the end of 2018, according to the New York Federal Reserve Consumer Credit Panel. Student loans made up the majority of that, followed by mortgages. Student loan debt grew 102% since 2009, the report said.
Forbes magazine reported in February that more than 44 million borrowers overall owed $1.5 trillion in student loan debt in the United States.
Mike Pierce, policy director and managing counsel at the Student Borrower Protection Center, said it was “great” that Friday’s hearing was called the “changing face of the student debt crisis,” because “I think that’s really what we’re looking at here.”
“Today, 400,000 borrowers in rural parts of California have student debt; 300,000 older borrowers have student debt in California … 500,000 borrowers across the state … are now behind on their loans,” Pierce said. “What that means, I think, with the changing face of the student debt crisis … is that we should … think about the conventional wisdom that led us to a trillion and a half dollars worth of student debt nationwide.”
“It’s a much bigger problem than just a handful of predatory schools or a handful of predatory lenders,” Pierce added. “It’s something that affects communities across the state.”