Wash. Rev. Code § 67.08.100
RCW 67.08.100
Findings-Intent- 2018 c 199 : "The legislature finds that an educated workforce is essential for the state's economic development. By 2020 seventy percent of available jobs in Washington will require at least a postsecondary credential. According to the 2015 A Skilled and Educated Workforce report, bachelor degree production in high-demand fields, such as science, technology, engineering, mathematics, and health, does not meet the demand of Washington's employers. The state has also set educational attainment goals to recognize the need and benefits of an educated workforce. College degree holders have higher incomes, better financial health, and are more likely to be homeowners than those who do not have college degrees. In fact, young adults aged twenty-two to thirty-five with a college degree are fifty percent more likely to own a home than those without a degree.
However, the legislature finds that the cost of higher education has risen dramatically in recent years. Between 2003 and 2013, the price index of tuition rose eighty percent, three times the increase in the consumer price index and nearly double the increase in the medical price index over the same period. The legislature also finds that students are financing their education with more student loan debt. According to the institute for college access and success' project on student debt, in 2014 fifty-eight percent of recent graduates in Washington had debt, and the average federal student loan debt load for a student graduating from a four-year public or private institution of higher education was twenty-four thousand eight hundred dollars. This is an increase of forty-two percent since 2004, when the average debt load was seventeen thousand four hundred dollars. These averages do not take into account additional private loans that many students take out to supplement their federal loans.
Student loan debt can greatly impact the economic benefits of earning a college degree. Surveys indicate that people burdened by student loan debt are less likely to buy a home; get married and start a family; start a small business; pursue lower paying professions such as teaching, nonprofit work, or social work; or even continue their education. The legislature finds that these decisions create a chain reaction of economic and social impact to the state.
The legislature recognizes that student loan debt is very different from other forms of debt, such as auto loans and home mortgages, for a variety of reasons. With most debt, borrowers know beforehand how much their monthly payment will be. However, student loans are more complicated because a student may borrow different amounts term to term and make decisions on an incremental basis as their financial aid packages, work, and living situations change. In addition, student loans may have origination fees, accumulated and capitalized interest, grace and forbearance periods, and income-based repayment options that all change the monthly payment amount. The legislature recognizes that another major difference with student loan debt is the unknown factor: Students take out the debt without having a clear idea of their future income and other financial obligations. Lastly, if a student has trouble repaying a student loan, the loans are not secured with physical property that can be sold, and in the event of bankruptcy, are nearly impossible to discharge.
According to the United States department of education, Washington students are defaulting on their federal student loans at roughly the same rate as the national average. For the cohort that entered into repayment on their federal student loans in 2013, ten percent, or seven thousand seven hundred forty-six students, fell into default during the fiscal year ending September 30, 2016, just under the national average of eleven percent.
The consequences of default can haunt student loan borrowers for years unless they are able to rehabilitate their loans. These consequences may include suspension of the borrower's professional license; excessive contact from collection agencies; garnishment of wages and bank accounts; as well as seizing of the borrower's tax refund and other federal payments, such as social security retirement, and disability benefits. Defaulting on a student loan damages a borrower's credit, making it difficult to qualify for a mortgage or auto loan, rent an apartment, and even find employment, closing people off from the resources they need for financial stability.
The legislature acknowledges that the state currently allows regulators of twenty-six professions to suspend the professional licenses or certificates of student loan borrowers who have defaulted on their loans. In 2015 the department of licensing reported one hundred ten license suspensions for student loan default within the eleven professions it regulates, most of which were in the field of cosmetology. Twenty-one states have similar laws, but recently some states have repealed their laws or introduced legislation to do so, recognizing that license suspension hinders a borrower's ability to repay. It is the legislature's intent to repeal the statutes regarding professional license or certificate suspension and intends for those who had their license or certificate suspended to be eligible to have their license or certificate reinstated.
The legislature also finds that Washington state has high postjudgment interest rates and generous wage and bank account garnishment rates that negatively impact private student loan borrowers who default. Studies indicate that wage and bank account garnishment contributes to financial and employment instability, unemployment, bankruptcy, homelessness, and chronic stress. Washington's high interest and garnishment rates also increase the courts' caseload by making it more attractive for lenders of private student loans to sue a borrower in court and obtain a judgment than to negotiate an agreement or settlement with the borrower.
Washington state's postjudgment interest rate was set at twelve percent in 1980 when the prime interest rate was fifteen percent. The current prime interest rate stands at three and one-half percent. In addition, the state's current postjudgment rate on torts is around three percent.
Regarding wage garnishment, many states, such as Texas, Pennsylvania, and South Carolina do not allow for wage garnishment for consumer debt. For federal student loans, the department of education can garnish up to fifteen percent of a borrower's disposable income, but not more than thirty times the minimum wage. In Washington, a borrower can have twenty-five percent of his or her disposable earnings garnished, or thirty-five times the federal minimum wage. As for bank account exemptions, Massachusetts protects two thousand five hundred dollars from garnishment compared to Washington's current exemption of five hundred dollars. To put this figure into perspective, the average rent in the Seattle metropolitan area is two thousand eighty-seven dollars.
Therefore, it is the legislature's intent to help student loan borrowers in default avoid loss of professional license or certification, which hinders repayment. It is also the legislature's intent to help student loan borrowers in default to maintain financial stability and to avoid the hardships of bank account and wage garnishment by making the postjudgment interest rate for private student loan debt more comparable to the market rate and by increasing the exemptions for bank account and wage garnishments." [ 2018 c 199 s 1.]
Short title- 2018 c 199 : "This act may be known and cited as the student opportunity, assistance, and relief act." [2018 c 199 s 301.]
Findings- 2017 c 46 : See note following RCW 67.08.330.
Effective date-2002 c 147: See note following RCW 67.08.002.
Effective dates-2002 c 86: See note following RCW 18.08.340.
Part headings not law-Severability-2002 c 86: See RCW 18.235.902 and 18.235.903.
Short title-Part headings, captions, table of contents not law-Exemptions and waivers from federal law-Conflict with federal requirements-Severability-1997 c 58: See RCW 74.08A.900 through 74.08A.904.
Effective dates-Intent-1997 c 58: See notes following RCW 74.20A.320.