LOS ANGELES, Calif. – Today, the Los Angeles County Board of Supervisors unanimously approved a proposal by Supervisor Hilda L. Solis and co-authored by Supervisor Lindsey P. Horvath on supporting President Joe Biden’s latest actions to provide debt relief and support to student loan borrowers.
Last year, President Biden made historic efforts to attempt to ameliorate the financial pain caused by student debt that was further exacerbated by the crippling financial effects of the COVID-19 pandemic. President Biden’s debt relief plan included providing up to $20,000 in debt cancellation to Pell Grant recipients and $10,000 in debt cancellation for non-Pell Grant recipients. However, on June 30, 2023, the Supreme Court of the United States (SCOTUS) struck down the President’s loan forgiveness plan, thereby creating a major setback for the millions who deserve the relief the President planned to provide.
“Student loan debt is preventing many from building wealth,” said Supervisor Solis. “People cannot afford to buy homes, start their own businesses, or send their own children to college. And it is no secret that the student loan debt impact is disproportionately endured by communities of color. To that end, it is incumbent on the government, including our Board of Supervisors, to amplify President Biden’s latest alternative plans for student loan debt relief.”
Over the past 40 years, the cost of college in the United States has almost tripled, resulting in millions of Americans needing to incur debt to pursue higher education. At the same time, wages have not risen to account for such a sharp increase in the cost of education, and many of Los Angeles County residents are saddled by crushing debt that impacts their financial well-being, economic mobility, and overall peace of mind.
A report by the Education Data Initiative indicates that Black and African American college graduates owe an average of $25,000 more in student loan debt than White college graduates, and that Hispanic and Latino borrowers were most likely to delay significant life events, such as getting married and having children, due to the burden of student loan debt.
“My generation and those after me have been devastated by the impacts of student loan debt and the broken education financing system,” said Supervisor Horvath. “The federal government had the opportunity to set millions on a better, more sustainable path, but the high court has once again failed to act in the best interest of the American people. At the local level, we now have an obligation to support borrowers with information sharing, and an opportunity to explore student loan forgiveness for current and future County employees as our region’s largest employer.”
In light of the SCOTUS ruling, President Biden announced new actions aimed at ensuring debt relief and supporting student loan borrowers as quickly as possible. The Secretary of the United States Department of Education (Department of Education) initiated a rulemaking process aimed at opening an alternative path to debt relief for as many working and middle-class borrowers as possible, using the Secretary’s authority under the Higher Education Act.
The Department of Education issued a notice as the first step in the process of issuing new regulations under the “negotiated rulemaking” process. The notice announces a virtual public hearing on July 18, 2023, and solicits written comments from stakeholders on topics to consider. Following the public hearing, the Department of Education will finalize the issues to be addressed through rulemaking and will begin the negotiated rulemaking sessions this fall. The Department of Education stated its intention to complete this rulemaking as quickly as possible.
Additionally, the Department of Education finalized the most affordable repayment plan ever created, ensuring that borrowers will be able to take advantage of the plan this summer before loan payments are due. Under the income-driven Saving on a Valuable Education (SAVE) repayment plan, some borrowers’ monthly payments will be cut in half, many borrowers will not have to make monthly payments, and those who do have to pay will save more than $1000 a year.
Solis and Horvath’s motion, which passed today, directs all County Departments, leveraging support from the Department of Consumer and Business Affairs, to ensure that Los Angele County is doing what it can to make residents aware of the alternative paths to debt relief that President Biden has offered, the new affordable repayment plan, and additional protections for the most vulnerable borrowers. Moreover, recognizing that many of Los Angeles County employees are part of the population saddled with student loan debt, this motion reiterates and builds upon the exploration of ways that Los Angeles County can implement programs to alleviate the impact of student loan debt on its employees.