MADISON, Wis. — Republicans in the U.S. Senate today voted to block action on legislation authored by Sen. Elizabeth Warren, and sponsored by Sen. Tammy Baldwin to allow student loans to be refinanced. Nationally there are over 40 million student loan borrowers with over $1.2 trillion in debt. According to statistics from the federal Department of Education, there are 812,000 borrowers with over $18.2 billion in federal student loan debt in Wisconsin.
Fiscal estimates of the federal refinancing legislation project 20 million borrowers would refinance their loans within 18 months. White House projections released yesterday show an estimated 515,000 Wisconsin borrowers would refinance their loans.
Original research by One Wisconsin Institute dramatically illustrates the need for help for student loan borrowers to keep the current $1.2 trillion debt crisis from becoming a full-blown economic catastrophe. They found that student loan debt has a significant and negative effect on critical drivers of the economy like new car and home sales as borrowers are significantly more likely to buy a used versus new car and rent versus own their home.
The following are the statements of One Wisconsin Now Executive Director Scot Ross on today’s Senate vote:
“Allowing borrowers to refinance their student loans just like you can with a mortgage or car loan is a simple, common sense solution that will help millions of Americans, including the nearly one million Wisconsinites with student loan debt.
“Thanks to champions like Sen. Baldwin, the fight to restore fairness for student loan borrowers continues. They’ve worked hard for their education and took on the personal responsibility of paying for it. That should earn them a fair shot at the middle class, not a multi-decade debt sentence.
“Unfortunately Sen. Ron Johnson voted against simple, common sense help for over half a million people he’s supposed to represent. He even went on to somehow blame the borrowers for simply wanting to refinance their student loans just like you can with any other loan.
“Hopefully Sen. Johnson’s vote today is just a case of him not being able to grasp the concept of the benefits for borrowers and our economy of lowering their interest rates. The alternative is that he doesn’t believe in the value of higher education or support the bedrock American values of hard work and personal responsibility that borrowers have shown in getting their education.”