Although state and federal policymakers have taken action to support student loan borrowers, another type of student debt has gone mostly unaddressed – institutional debt. Institutional debts are owed by current or former students directly to an institution of higher education. The economic and public health consequences of the pandemic forced record numbers of students to withdraw from their courses of study. As a result, institutional debt ballooned and now more than 750,000 low-income students owe more than $350 million in institutional debt to California public colleges. Current or former students with outstanding institutional debt can face disastrous consequences that not only stop students from graduating but also adversely affect their future financial and social well being.
Stopping the most harmful debt collection practices by California higher education institutions will allow students to persist in their courses, obtain their hard earned degrees, and successfully enter the workforce.
“At a time when the state is facing an enrollment crisis, this bill helps students persist with a degree in hand ready to enter the workforce. Institutional debt especially burdens low-income and students of color - students hard hit by the pandemic. The time is now to end harmful debt collection that stops students in their tracks.”
Ensuring students achieve academic success from cradle to career by addressing historic inequities in our education systems and advancing progressive policies that promote student success and access to the promise of quality educational opportunities.
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