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In the most-recent move targeting the burden of student debt in California, Los Angeles County could offer to pay off its employees' student loans as a hiring incentive and way to retain workers.
The proposal was unanimously supported by the LA County Board of Supervisors, who voted on Tuesday for the measure to move forward with an analysis of how the county could help its employees pay off their student debt.
The decision is part of recent efforts in California to address the issue of onerous student loan debts. Last week, California Governor Gavin Newsom, a Democrat, expanded the state's Middle Class Scholarship program by an additional $227 million in this year's budget deal, allowing many more students to obtain financial support to fund their education.
The idea behind the revamped scholarship program is to allow California college students to graduate debt-free. However, the initiative has been criticized for excluding community college students, who are not eligible but are traditionally considered the poorest students.
These measures show California's determination to help its students shoulder the cost of higher education at a time when student loan debt forgiveness has generated a nationwide debate. In June, the Supreme Court struck down President Joe Biden's efforts to cancel up to $20,000 in debt for some borrowers.
The total federal student debt has more than tripled in the last 15 years, rising from about $500 billion in 2017 to $1.6 trillion in 2023, according to the Congressional Budget Office (CBO). At a national level, student loan debt is at an all-time high of nearly $2 trillion—and it's estimated to take 20 years to repay.
Wages, on the other hand, have failed to keep up with both these increases and inflation, leaving many Americans short of money.
LA County is looking into helping its employees repay their student loans to allow them to invest in other things, like buying a home, having kids, or sending their children to college. Supervisors Lindsey P. Horvath and Hilda Solis—former secretary of labor under President Barack Obama—said that county residents have been delaying or putting off such big life projects because they have to repay their student loans, as mentioned by the newspaper Long Beach Post.
"My generation and those after me have been devastated by the impacts of student loan debt and the broken education financing system," Horvath told Newsweek. "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," she added.
"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."
A total of 3.86 million Californians—9.8 percent of the state's entire population—has some form of student debt, according to the LA County Consumer & Business Affairs group.
Newsweek has contacted Supervisors Solis by email on Wednesday.
Update, 7/14/2023 4:50 a.m. ET: This article was updated to include a comment from LA County Supervisor Lindsey P. Horvath.
About the writer
Giulia Carbonaro is a Newsweek reporter based in London, U.K. Her focus is on the U.S. economy, housing market, property ... Read more