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California’s college students can unexpectedly incur thousands of dollars in debt to the universities they attend, sometimes derailing their educational plans, advocates told the Little Hoover Commission.
“Institutional debts work differently than student loans, and they tend to be more harmful,” said Dr. Charlie Eaton, associate professor of sociology at the University of California, Merced, and cofounder of the Higher Education, Race, and Economy Lab, noting that roughly 300,000 mostly low-income students in California incur such debts each year, creating significant obstacles to completing their education.
The commission launched a study of debt students owe to the institutions they attend at the request of Assemblymember Blanca Pacheco, who also testified before the commission.
Representatives of California’s three segments of public higher education – the University of California, the California State University, and the California Community Colleges – also testified before the Commission, describing their efforts to help students who fall behind on payments remain enrolled and continue progressing toward their degrees.
“You can’t manage what you don’t measure,” said Commission Chair Pedro Nava, emphasizing the need for better data and transparency to understand the scope and impact of institutional debt across California’s higher education systems.
Several witnesses also highlighted the direct impact of these debts on students’ ability to complete their education and transition into the workforce.
Stephany Cartney, a recent graduate, described how institutional debt can arise unexpectedly and create lasting obstacles even after leaving school. She noted that even modest balances can delay graduation, restrict access to a diploma, and complicate the transition into the workforce.
Commissioners underscored the importance of understanding how institutional policies affect student outcomes. “If our goal is to help students complete their education, we should focus on preventing them from becoming debtors in the first place,” said Commissioner David Beier.
Commissioners also paid keen attention to the need to balance student support with fiscal realities. “We have to address these challenges in a way that is fair to students while recognizing the responsibilities institutions have and the expectations of taxpayers,” said Commissioner Janna Sidley.
The hearing explored potential policy approaches, including improved data collection, clearer communication of financial obligations, and strategies to support students in remaining enrolled while addressing outstanding balances.
Testimony from researchers, advocates, higher education representatives, and individuals with lived experience highlighted both the complexity of the issue and the opportunity for targeted reforms.
