The national student debt in the United States has reached alarming record levels in 2024, economically suffocating millions of Americans and residents who have had to mortgage their future in order to access the right (or sometimes privilege) of a university education.
According to Federal Student Aid, as of May 2024, students owe $1.75 billion. This figure represents an increase of $240 billion since the COVID-19 pandemic began in March 2020.
There are more than 43 million federal student loan borrowers nationwide, with an average balance of $37,000. Most have federal student debt (about 67%) and are mostly undergraduate students. The rest are in debt with federal graduate loans and PLUS loans for parents (we explain the difference of the types of loans in this article).
California Takes Its Own Initiative to Help Those With Student Debt
In the sunny state of California, the student debt crisis is also a pressing and pressing reality for millions of borrowers. Currently, there is a staggering $148,000 million in debt and the government of the City of Sacramento is determined to support these young and old who are having a very bad time.
The Student Loan Empowerment Network is a new initiative available throughout the state: it brings together several non-profit organizations and agencies to give you guidance and take you to zero debt. A total of 13 organizations have partnered with the California Department of Financial Protection and Innovation (DFPI) to provide free, individualized education, case management and assistance with student loan problems for Californians.
California Funds for Indebted Students
The Student Loan Empowerment Project was authorized through the 2022-2023 budget of the administration of Democrat Gavin Newsom, which provided $10 million in funding for the General Fund for Student Loan Borrower Assistance (SB 154).
To that budget was added $7.25 million in grants, and $2.75 million for a statewide marketing and communication campaign, to get the information of the initiative to the hundreds of thousands of borrowers in trouble.
Suzanne Martindale, principal deputy commissioner for consumer financial protection at the California Department of Financial Protection and Innovation, commented on the inherent difficulties of the student loan system: “The system is riddled with systemic problems that make it difficult for people to obtain the rights and benefits to which they are entitled by law.”
Martindale explained that many borrowers are potentially eligible for some kind of credit relief, but do not know how to access it due to the lack of clear and accurate information, and the continuous modification of goals. In addition, loan servicers are often unable to provide adequate answers.
How to Ask for Help if You’re in Student Loan Debt in California
Those borrowers who wish to receive assistance from the program can complete an admission form at Studentloanhelp.dfpi.ca.gov or call (888) 774-2227.
Through the program, borrowers will be connected with financial counseling or legal aid agencies. In Los Angeles, these include Public Counsel, the Legal Aid Foundation of Los Angeles, and the Koreatown Youth & Community Center.
Additional resources also include webinars and financial counseling sessions, which borrowers can access to better prepare themselves to become debt-free one day. Martindale noted that some borrowers with “very complex legal issues” might need one-on-one help, especially those with old private loans from defunct issuers or who have defaulted on their payments.
