State treasurer and gubernatorial hopeful John Chiang is wading into the increasingly high-profile debate over college affordability with a new push for California to play a role in alleviating the burden of high-interest private student loans.
Chiang is sponsoring legislation that would create a $25-million fund that would offer a degree of protection to student loan providers. With the state assuming some of the risk, the measure’s proponents say financial institutions will be more likely to offer lower interest rates to those carrying student debt.
“We know that unfortunately too many Californians, too many Americans, are saddled with extraordinary debt,” Chiang said in an interview, touting his plan as an effort to “try to get them out of debt as quickly as possible.”
The proposal, which is being carried in the Legislature by Sen. Ben Allen (D-Santa Monica), is among a swell of measures introduced in the Legislature this year aimed at tackling the high cost of college. Allen and Chiang will unveil the legislation at a Capitol news conference Tuesday.