MADISON, Wis. — U.S. Sen. Ron Johnson has said a lot about the $1.2 trillion student loan debt crisis – like calling for less financial aid for eligible students, more for-profit colleges and wondering why kids today can’t afford school like he did in the mid-1970s. According to One Wisconsin Now Executive Director Scot Ross, Sen. Johnson’s disingenuousness was on full display today as he conflated efforts to help student loan borrowers refinance their loans with limited loan forgiveness programs and suggested that federal financial aid is causing tuition increases and student debt.
“Sen. Johnson’s comments are exhibit A on exactly what’s wrong with the system today. Out-of-touch and ill-informed politicians like him blame students’ desire to get an education and measures to help them afford it instead of supporting common sense solutions,” said Ross. “It apparently has never occurred to Sen. Johnson to help borrowers by restoring fairness to the system and cracking down on abuses by bad actors like big Wall Street banks.”
The Senate Committee on Budget, on which Johnson sits, today held a hearing on the issue of student loan debt and its impact on borrowers and the economy. In his opening statement, Johnson suggested that common sense solutions for borrowers, like allowing them to refinance their student loans as you can with a mortgage or auto loan, are ill advised. He attempted to make his point by conflating allowing refinancing, and still charging borrowers interest and requiring them to repay all their debt, with a limited federal program that offers debt forgiveness for certain public service employees meeting eligibility criteria.
“Student loan borrowers have done the right thing, they’ve worked hard to get an education or job training and they took on the personal responsibility of paying for it. They’re not asking for a bailout, just a system that treats them fairly,” said Ross.
Sen. Johnson’s antipathy on the current debt crisis seems to stem from his personal experience in the 1970s that he frequently refers to when speaking on the issue. Johnson graduated from the University of Minnesota in 1977, when the annual tuition was $663 a year. The most recent annual tuition for a state resident at Johnson’s alma mater is now $12,060 — 1,700 percent higher than when he graduated.
Multiple bills to provide relief for student loan borrowers have been introduced at the federal level, including measures by Wisconsin Representative Mark Pocan and Senator Tammy Baldwin, and the Senate may hold votes on a refinancing bill in the coming weeks. At today’s hearing Baldwin, also a member of the Senate Budget Committee spoke out strongly in favor of the need for reform to help current and future student loan borrowers.
Original state and national 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.
“Sen. Johnson has said a lot of nonsensical things about student loan debt. But today’s tour-de-force of ignorance on the depths of the student loan debt crisis and opposition to a common sense, market based solution like allowing loan refinancing takes the cake,” concluded Ross.