Support Student Loan Repayment Parity. Pass Senate Bill 16 (Wieckowski)
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More than 40 million Americans have student loan debt. Now at $1.3 trillion, education debt outpaces credit card debt as the leading source of household debt. These mortgage-sized loans cause many graduates to postpone buying a home, getting married, starting a family, and saving for retirement. And while average student debt hit a record above-$30,000 this year, income growth has not kept pace with the rise in student loans or housing costs.
There are many programs in place to help people with Federal student loans.
• Deferment (postpone payments for a period of time and interest does not accrue)
• Forbearance (postpone payments for a period of time and interest does accrue)
• Cancellation/Discharge (part or all of the loan balance is forgiven)
• Income-Contingent Repayment
• Income-Based Repayment.
Private lenders are not required to, and usually don’t, offer different repayment options based on a borrower’s circumstances. Some private lenders have created programs for “distressed” student borrowers: Wells Fargo and Discover Bank have offered limited cancellation programs for borrowers who die or become permanently and totally disabled.
SB 16, authored by California State Senator Bob Wieckowski (D-Fremont) would better level the playing field of student loan collection by matching the private garnishment maximum to the Federal garnishment maximum – 15%.
There is no rationale for treating a struggling borrower with private loans any differently than one with Federal loans.
SB 16 will benefit thousands of borrowers in California – home to an estimated $20 billion in outstanding private student loan debt.
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