MADISON, Wis. — Gov. Scott Walker and Republicans in the State Legislature are fast-tracking legislation they claim helps deal with the student debt crisis and college affordability. But, as One Wisconsin Now Executive Director Scot Ross pointed out in his testimony to the Assembly Committee on Colleges and Universities, Walker’s scheme denies any help lowering the monthly payments of current borrowers.
“The student loan debt crisis is a $19 billion nightmare for one million Wisconsinites and their families. It prevents them from purchasing new cars and a home of their own. It stymies consumer spending and stifles new job creation,” said Ross. “And make no mistake, none of these bills will reduce by one cent the monthly student loan payments of Wisconsin student loan borrowers.”
In contrast Ross noted the Higher Ed, Lower Debt Act, introduced in the 2013 session and again in June 2015 that is currently being blocked from consideration by the GOP controlled legislature, would create a state authority to help borrowers refinance their student loans, just like you can with a mortgage. The measure also extends a state tax break to payments on student loans that could provide an annual tax benefit of over $530 for an individual or $1,000 for a couple and provides additional consumer information about higher education loans.
A report by the White House on a federal student loan refinancing plan showed that 515,000 of the current 812,000 Wisconsinites with just federal student loan debt would immediately see lower interest rates, reducing their monthly payments.
Meanwhile Walker and the GOP legislature have pursued a trifecta of wrong-headed policy choices that have left Wisconsin with the third highest percentage of 2014 college graduates with student debt in the nation. A recent memo from the nonpartisan Legislative Fiscal Bureau notes that funding for the University of Wisconsin System and Technical Colleges has been reduced by nearly $1 billion when compared to the year before Walker entered office. In addition Walker and the Republican majority hiked tuition by 11% in their budget and so woefully underfunded financial aid that 41,000 students eligible for aid received none.
Ross concluded, “Common sense reforms are before the legislature – like helping lower hard working student loan borrowers monthly payments by allowing their loans to be refinanced, just like you can with mortgage. But instead Scott Walker and his legislative cronies are selling a bill of goods that provides them with a talking point while denying any real help to one million Wisconsin borrowers.”