New state law protects students in debt

Lindsey Pacela
Staff Writer

The California Student Borrower Bill of Rights law took effect recently to protect college students and recent graduates in this financially challenging time.

The law, Assembly Bill 376, was approved by the legislature in August 2020, and went into effect last month. It protects students who borrow for their education as follows: It sets time frames for student loan providers that must be followed; it maintains records; and it requires proper training for customer service personnel in how not to engage in unfair practices.

As of 2020 there are nearly four million borrowers in California alone today, at an average of $36,400 of debt per person, and a combined debt of $138 billion, according to

The new law does not eliminate student debt, but it protects students from aggressive student loan providers, who have taken advantage of students in the past.

“These bad practices developed over years (had) no outlook on helping to manage student debt with billions of dollars being contributed to just interest alone,” said the law’s author, State Assembly Member Mark Stone, D-Santa Barbara.

Stone said he wrote the law because of his growing concern for California students. This law could be a way for the state to protect them, Stone said.

“The longer people are tied to debt, the longer it is until they can contribute to the economy,” Stone added.

The National Center for Education Statistics in the U.S. Department of Education reported that public undergraduate college tuition in the United States has risen nearly 30% between 2007 and 2018.

Private college tuition has risen by 23% during that time period, after adjusting for inflation.

During that same time period, the Center found that undergraduate students who were awarded financial aid at four-year degree-granting post-secondary institutions between 2006 to 2018 rose 7%.

In 2016, California enacted the Student Loan Servicing Act, which allows student loan service providers to legally provide services only if they have a license through the California Department of Business Oversight, and allows commissioners of the Department to conduct investigations of applications and licenses.

The Student Borrower Bill of Rights improves on the 2016 law with increased protections for borrowers.

Carson Bechtel, political science major at the University of La Verne, was pleased to hear about the new law’s protections.

“If people’s first credit exposure (is) their student loans, then they need to know everything that comes with it to avoid lifelong debt,” Bechtel said.

Carlos Cervantes, associate dean of academic support and retention services, said student loan providers often take advantage of these loans which are different from home mortgages or car loans.

“A Bill of Rights, protecting students from predatory loan services –  something that has been long overdue,” Cervantes said.

Jason Neidleman, professor of political science, said that the way things have been going with the loan companies and increasing student debt is “similar to the dot-com bubble” of the early 2000s.

He said young adults are now continuously forced to feed their disposable income into their student loan debts, instead of focusing it on stimulating the economy. He added that they are no longer free to explore employment options outside of what will help pay back these loans.

Neidleman added that this law was a part of a larger effort by state and federal governments to begin relief for students, as a stepping stone into the future. The state and federal governments have a choice, Neidleman said: “Either continue to manufacture debt or deal with it.”

Lindsey Pacela can be reached at

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