Assemblymembers Dababneh and Calderon Hold Hearing on Student Loan Debt Crisis
SACRAMENTO — Student loan debt is reaching crisis proportions and making it harder for young Californians to finance their higher education goals, according to findings today at an Assembly Banking and Finance Committee joint oversight hearing.
“Nationwide, student loan debt totals more than $1.3 trillion, with an additional $108 billion in private loans – a figure that is more astonishing because it indicates a doubling of student debt over the last 10 years,” said Assemblymember Matt Dababneh (D – Woodland Hills). “Higher education costs continue to skyrocket, much faster than the rate of inflation, so we need to be more proactive in providing better options for students and families.”
Assemblymember Dababneh co-chaired today’s hearing of the Assembly Banking and Finance Committee and the Assembly Select Committee on Youth and California’s Future. According to a committee report released today, the number and size of student loan defaults are on the rise. Of the 43 million Americans with student debt, 16 percent are in long-term default – a potential hit that could saddle taxpayers with the bill.
“Missing a loan payment or defaulting on the loan has staggering consequences for consumers, which will jeopardize their ability to qualify for additional student aid and it could take years for them to reestablish their good credit record,” said Assemblymember Dababneh. “As the Chair of the Assembly Banking and Finance Committee, I plan on exploring a wide range of policy solutions on how the state and loan servicers can better support students to decrease default rates on such loans.”
“Millennials are on track to be the most educated generation in history,” said Assembly Majority Leader Ian Calderon (D – Whittier), who co-chaired today’s hearing. “Unfortunately, that means we will also be the most indebted. Finding solutions to streamline repayment is in all of our best interest to assure repayment is easy for individuals and California can continue to have a thriving economy.”
Today’s hearing featured testimony from two panels: one panel of governmental agency representatives from the federal Consumer Finance Protection Bureau, the California Department of Business Oversight and Legislative Analyst’s Office; and a second panel of private-sector experts with the Center for Responsible Lending, American Student Assistance, the Institute for College Access and Success, and the Student Debt Crisis.