Under federal law, you cannot refinance federal student loans with the government. This is a huge problem for over 800,000 Wisconsinites with over $19 billion in federal student loan debt, locking hundreds of thousands of borrowers into higher than necessary interest rates and costing Wisconsin families. The government is not helping to refinance federal student loans.
And, many more borrowers have private loans on which oftentimes paying double-digit interest rates while big banks borrow from the federal government at rates of less than 1%.
Research has shown that refinancing federal student loan would help us all. The crushing student debt hurts us by slowing our economy. Families can’t buy new cars or homes or save for their children’s education. Workers can’t save for their retirement. Entrepreneurs aren’t able to start the small businesses that are the bedrock of new job creation – all because they cannot refinance their student loans.
The unfortunate reality of the student loan debt crisis is that borrowers who took on the personal responsibility to pay for it are not being treated fairly by the system. Millions of Americans are being denied the fair shot at the middle class that they earned with their hard work in getting an education. We need to change the system. That means changing the minds of politicians like Scott Walker, who idea of a solution is having a website and telling borrowers to call their bank.
The good news is that together we have the power to do it.
Common sense reforms like allowing borrowers to refinance federal student loans, just like you can with a home or auto loan have been introduced both here in Wisconsin and in Washington D.C. And more and more policymakers are getting on board with the need to reform the system to make sure education remains a path to the middle class.
To make these ideas a reality, borrowers need to get educated and get involved. There are 43 million Americans with over $1.3 trillion in student loan debt. By getting educated about where policymakers stand on the issue of reform and by voting we can make the student loan debt crisis the new third rail of American politics – ignore the need for reform, and you’re out.
So get informed, get involved and get out to vote.