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Wednesday, November 2, 2022

LA County to Explore Purchasing Student Debt of Some Employees


Los Angeles County will look into ways the county can purchase student loan debt that is unpaid or defaulted on by county employees who earn less than the median income of the area they live in, after a Board of Supervisors vote Tuesday.

Introduced by Supervisors Hilda Solis and Holly Mitchell, the motion requires the county government to report back to the board in 120 days with suggestions of how to purchase county employee’s student debt, what the most appropriate debt to purchase is, criteria that county employees will have to meet, ways the county can recoup debt payments if an employee leaves the county within five years of the debt being purchased, and ways to fill job vacancies by implementing the initiative.

According to the county’s Department of Consumer and Business Affairs, 9.8% of Californians have some form of student debt. The motion from the Board of Supervisors states that “Black women in particular are most severely impacted” by student loan burdens.

“According to the ACLU, the median Black borrower owes 95% of debt compared with the median white borrower who has paid off 94 percent of debt two decades after taking out student loans,” the motion states. “Student loan debt also disproportionately impacts Latino undergraduate students. Excelencia in Education found that 51% of Latino undergraduate students who began their postsecondary education in 2012 borrowed funds. Approximately 36% of Latinos will owe more than the amount they originally owed after starting college 12 years earlier.”

The motion also requires all county departments inform their employees about President Joe Biden’s federal student debt relief plan, and post information about the plan on their websites, email newsletters and other communications to make sure people without internet access know about the plan and are able to apply for it if they are eligible.

The federal program would forgive up to $20,000 of Pell Grant loans per individual and up to $10,000 for people who hold other government held federal student loans if it survives current court challenges. To qualify for federal student debt relief, individual applicants have to have earned less than $125,000 in annual income in 2020 or 2021, or $250,000 between married couples.

An online application for the federal program has been available since last month, but implementation of the plan is at least temporarily blocked after a coalition of Republican-led states filed a motion with the 8th Circuit Court of Appeals to stop the plan, arguing that it is unfair and would add to Americans’ inflation burden.

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