SACRAMENTO—Some California college graduates could get help refinancing their student loan debt under a bill by Assembly Speaker John A. Pérez that also would permit the state to provide limited debt restructuring, consolidation and interest rate buy-downs.
Today the Assembly Higher Education Committee has passed Assembly Bill 2377.
“In the past ten years, the price of attending California’s universities has more than doubled,” said Speaker Pérez (D-Los Angeles). “We created the Middle Class Scholarship to reduce costs for current and future students and now we need to help those who have already incurred student loan debt. The California Student Loan Refinancing program will assist California graduates in easing their student loan debt, paving the way for them to reinvest in the state’s economy.”
Existing law authorizes California Educational Facilities Authority to borrow money and issue bonds, notes and other obligations. The Speaker’s AB 2377 authorizes the Authority to create a state-funded loan loss reserve leveraged by private lenders for the purposes of providing student loan refinancing options, including loan consolidation, interest rate buy-down, debt restructuring, establishing a loan loss reserve account, and alignment with various federal student loan alternative repayment programs.
Speaker Pérez is the creator of the Middle Class Scholarship, which reduces the cost of tuition at state universities, specifically for children of families whose earnings exclude them from other assistance.
As of 2013, California residents have an average of just over $20,000 in student loan debt upon graduation. Of the approximately 250,000 California residents who received bachelor’s degrees both in and out of the state in 2012, 52 percent had some level of loan debt.
The bill will next be heard by the Assembly Appropriations Committee.
CONTACT: John Vigna (916) 319-2408(916) 319-2408
Website of Assembly Speaker John A. Pérez: www.asmdc.org/speaker