Level the playing field for public & private borrowers
Wieckowski student loan bill helps level the playing field for public, private borrowers
SB 16 lowers the cap on how much private lenders can garnish to the federal loan level
Sacramento – State Senator Bob Wieckowski (D-Fremont), who has successfully brought relief for low-income Californians fighting wage garnishment in the past, is now setting his sights on assisting private student loan borrowers by lowering the amount that can be taken from their paychecks to the same level as federal loan borrowers. The senator introduced SB 16 yesterday, the first day of the legislative session.
Private student loan creditors can garnish up to 25 percent of a young person’s disposable income. SB 16 lowers that cap to 15 percent, the same as federal loan servicers.
“While Donald Trump can file bankruptcy six times for his failed casinos and hotels, our young people pursuing higher education are not so lucky,” said Wieckowski, a member of the Senate’s Judiciary Committee. “SB 16 instills some modicum of fairness by ensuring that all struggling California student loan borrowers are treated equally, regardless of loan origin.”
Federal law prohibits student loan debt from being disposed of in bankruptcy. California is home to an estimated $20 billion in outstanding private student loan debt. More than 40 million Americans have student debt, totaling more than $1.3 trillion nationally, and outpacing credit card debt as the leading source of household debt. This huge burden causes many graduates to postpone buying a home, getting married and starting a family.
Private loans generally do not offer the number of repayment options that help students pay off federal student loans. A person with federal student loan debt can often defer payments, cancel or discharge part of a loan balance, postpone payments, or enter into a repayment plan with the loan servicer.
Senator Wieckowski represents the 10th District, which includes southern Alameda county and northeast Santa Clara County.