Student debt makes CA waves

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While California students mustered to lead a nationwide movement for college debt relief, policymakers and innovators grappled with the issue in ways of their own.

Students in the UC system — particularly the Berkeley campus — have taken a central role in pushing the co-called Million Student March. Protest organizers have announced a sweeping agenda including “a $15 minimum wage for student employees on college campuses, free tuition at public universities, and the abolition of student debt,” according to Time. “The Million Student March was an idea that started with a remark made by U.S. Senator Bernie Sanders, stating elected officials wouldn’t care about supporting higher education until a million students were out marching,” as UCSA President Kevin Sabo told the Daily Californian.

An uncertain path

The latest elements of student debt policy emanating from Washington have been a mixed bag. The new revisions to the federal Pay As You Earn program “will let all borrowers with federal direct student loans who are not in default cap their monthly payments at 10 percent of discretionary income, no matter when they borrowed or their debt-to-income ratio,” as the San Francisco Chronicle reported.

Meanwhile, a twist in federal robocall law has raised the specter of heightened fraud risks for targeted students. “Under the new provision, robocalls could only be directed at people with student loans backed by the federal government,” noted KOMO Channel 4 News. “For many, that’s just one more opportunity for scammers and deceptive marketers to expand their operations. State and federal regulators already have their hands full with illegal companies that make unsolicited calls claiming they can help consumers consolidate student loan debt or get loan modifications  for a large and illegal up-front free.”

Tuition politics

Californians have actually fared better than others as the debt crisis continues its upward spiral. “Students graduating from California colleges had just $21,382 in loans, fourth-lowest among the states,” the Institute for College Access and Success noted in its tenth annual report on student debt, according to the Chronicle.

“The state’s Cal Grant program pays up to the full cost of systemwide tuition and fees at University of California and California State University campuses, and up to a certain dollar amount ($9,084 in 2014-15) at qualifying private colleges. These grants, available to California residents from low- and moderate-income families, have helped defray soaring tuition.”

ICAS research director Debbie Cochrane told the Chronicle that “tuition at UC and CSU campuses rose 128 percent, but the average debt for public-college graduates rose only 43 percent” over the past 10 years.

But some Golden State politicos have sought to frame state education as a crisis in need of broad new government support. Along with UC Regent Eloy Ortiz, Lt. Gov. Gavin Newsom announced his support for an initiative called California College Promise, “a bold effort to offer two tuition-free years of community college for responsible students,” as they argued in the San Jose Mercury News. “This promise is true to California’s tradition of advancing our educational system at critical junctures to present future generations with better opportunities to succeed,” they wrote.

Disrupting debt

At the same time, student debt has attracted the attention of California’s startup scene. One new highly selective startup school, Make School, offers a two-year curriculum in tech — “billed as ‘debt-free education,'” as the Mercury News reported. “Ashu Desai, the 23-year-old cofounder of Make School, said widespread concerns about student debt and abuses in the for-profit college sector influenced his decision not to charge tuition up front. Instead, the school charges a percentage of graduates’ wages — or, alternatively, an investment in their startup — instead of a flat fee.”