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Assembly Passes Bill Prohibiting Garnishing Wages Over Student Loan Debt

Apr 11, 2013

Credit Creative Commons licensed from Flickr user Glenngould /

College students wouldn’t face the threat of lenders garnishing their wages if they can’t repay private student loans under a bill passed by the California Assembly today.  Amy Quinton reports from Sacramento.

Unlike federal student loans, private student loans can’t be forgiven in bankruptcy and banks can garnish up to 25 percent of a student’s wages. Democratic Assemblymember Bob Wieckowski authored a bill he says would help under-employed, debt-saddled graduates. He says the bill would simply eliminate one way private lenders can collect repayment.

“Creditors, I believe will be more inclined to work with the debtor and figure out a repayment plan that these young people can manage,” says Wieckowski.

But Republican Assemblymember Don Wagner says the bill could limit the number of loans available to college students.

“The students that will be hurt by this, those that will be driven out of the market are perhaps the ones most in need of these loans, yes they’re incurring debt, but that is their ticket to a college education,” says Wagner.

The bill would not affect federal student loans. It passed on a party line vote.