SB 16 lowers the amount that creditors can garnish from Californians
Sacramento – The Assembly Judiciary Committee today approved a bill by Senator Bob Wieckowski (D-Fremont) that would provide relief to Californians struggling to pay off their private student loan debt by lowering the wage garnishment cap to the same level as people who defaulted on federal student loans.
Currently, the garnishment rate is 25 percent of a person’s paycheck for those who have defaulted on their private student loan. But the cap on federal loans is only 15 percent. Wieckowski’s SB 16 would lower the private rate to 15 percent.
“Many of today’s jobs require a bachelor’s or master’s degree, but these degrees can only be attained after students have taken on a large burden of debt,” said Wieckowski, a member of the Senate’s Judiciary Committee. “With today’s high cost of living, graduates with private loan debt need the extra money SB 16 will allow them to keep to pay for everyday expenses. While the big banks live a life of luxury, thousands of graduates throughout California live a much different, and harsher financial reality.”
Nationwide, student loan debt is more than $1.3 trillion, higher than auto loan or credit card debt. The student loan debt burden results in many graduates postponing home purchases, starting a family, building retirement savings and getting married. SB 16 will help the hundreds of thousands of young people in California who take out private student loans each year.
Abraham Mendoza, a recent graduate of California State University, Sacramento, testified in support of the bill before the committee.
“Many times during the course of my undergraduate career my economic reality pushed me toward taking private student loans, but just the fear of not being able to repay them dissuaded me,” Mendoza said, noting that he slept in a living room and survived on Top Ramen for two years to make ends meet. “But I know many people who did end up taking them because they had no other choice and they were forced to accrue debt.”
Wieckowski said the tremendous increase in student loan debt is partially a result of a federal law preventing graduates and others with high debt from discharging their debt in bankruptcy. In 2013, he passed a resolution putting the California Legislature on the record, urging Congress to allow discharging student loan debt in bankruptcy to give Californians a new financial start.
SB 16 is supporting by Western Center on Law & Poverty, Consumer Federation of California, California Faculty Association, California State Student Association, Faculty Association of California Community Colleges, California Association of Nonprofits, Legal Aid Association of San Bernardino, East Bay Community Law Center and the Public Law Center.
Senator Wieckowski represents the 10th District, which includes southern Alameda County and northeast Santa Clara County.