A Student Bill of Rights: to ensure higher education is a path out of poverty…not into it

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By: Bob Wieckowski

Note: The Silicon Valley Young Democrats (SVYD) approved Assemblymember Wieckowski’s Student Bill of Rights during their March Membership meeting and it went on to be approved by the California Young Democrats (CYD) at the California Democratic Convention in April.

A college degree is still the best road to financial security, helping to improve quality of life for millions of American families. But with the soaring cost of higher education, the route is paved with too many potholes. A few wrong turns and poor choices can lead students straight off the road of financial prosperity, into a ditch filled with crippling debt.

In fact, with student loan debt now hovering above $1 trillion nationally, many financial experts predict this mass of red ink could swamp our economy. But with some key reforms we can make sure education remains a pathway out of poverty, not into it.

That’s why I am proposing a Student Bill of Rights, a four-bill package that focuses on debt prevention through education and easing the burden on student borrowers.

In the past decade, starting salaries for college graduates have fallen 15 percent, while education debt has soared 500 percent. Unlike federal student loans, which have multiple options for of deferment and forbearance, private student loans lack many of these crucial safeguards. With private student loans, a creditor can garnish 25 percent of a debtor’s disposable income. Preventing wage garnishment will make the lenders more inclined to work with students on manageable repayment plans and give graduates a chance to stabilize their finances.

This is why I introduced AB 233, which would allow a student debtor to claim an exemption from a wage garnishment on private student loans. It now awaits action in the Senate.

Students should also receive counseling on private loans, just as they do on federal student loans. Private loans, which are becoming more of a necessity for students seeking degrees, charge higher interest rates, lack several protections and are generally a riskier transaction. By requiring parity with the counseling students receive on federal loans, AB 534 ensures students will be able to make more informed decisions.

Recently, Congress designated April as Financial Literacy Month. But California is one of only four states that do not include personal financial literacy in their economic education standards. My Student Bill of Rights would create a Common Cents curriculum (AB 391) that includes coursework on savings, checking accounts, credit cards and ways to pay for college.

Last year college students took out more than $100 billion in loans. They are taking on more and more debt at an alarming level. Yet Congress in 2005 prohibited student debt from being discharged through bankruptcy. Virtually every kind of debt — even gambling debt — can be discharged through bankruptcy.

Since that time, the average student loan debt has increased 58 percent to more than $27,000. This needs to end. I am pushing Assembly Joint Resolution (AJR 11) to urge Congress to allow private student loan debt to be discharged via bankruptcy.

In his State of the Union address this year, President Barack Obama asked us to better equip our students for jobs in a high-tech economy. The Public Policy Institute of California says the state needs to dramatically increase its number of college graduates to meet the demands of its workforce in 2025.

The road to a strong and vibrant economic future for California will be much smoother if we act now to reduce rapidly growing student debt. Providing an affordable avenue to higher education has made California the ninth largest economy in the world. Burying students with thousands of dollars of debt will limit opportunity and financial security.

California can do better.

Upcoming Event: Student Bill of Rights

If you are available, please join Assemblymember Wieckowski on the UC Davis Campus (East Quad) on Wednesday, 5/22 @ 12:30pm, where student leaders will gather for a Rally to Tackle the Student Debt Crisis and urge the Legislature to pass the Student Bill of Rights.