On October 16, State Representative Cory Mason and State Senator Dave Hansen presented the Higher Ed, Lower Debt Act. This is a significant piece of legislation that is first of its kind and I would like to thank them for taking on the issue of crippling student loan debt. This bill would help student loan borrowers and unchain them from their debt.
Borrowers would be allowed to refinance and deduct payments on state income taxes, two practices already in place for home mortgages, the only personal debt that is larger than student loan debt. Refinancing the interest on borrower’s debt helps the debt become manageable. In addition, the bill requires that borrowers receive detailed information before entering any loan agreements. Students gain protection from signing away the next twenty, thirty, or even forty years of their life in order to pay for college now.
Alleviating student loan debt is a necessity. According to research done by the One Wisconsin Institute, the average national total monthly student loan payment is $388. That money is not being put towards buying a car, becoming a homeowner, or even starting a family. The staples of what it means to be middle class in America are being stripped away by student loan debt.
The Higher Ed, Lower Debt Bill advocates for students. Too often in the pursuit of higher education, students are unaware of their options and do not know what signing a loan will entail down the road. Blindly agreeing to a loan is not a fair practice. If students are being forced to pay higher tuition and fees every year, then they should be informed about the details of a loan. The more information students receive upfront about different lenders allows them to make more educated decisions. Loans should be a catalyst to opportunity, not a promise to lifelong debt.
Student loan debt is a national issue. Over the summer, we saw Congress fight about interest rates and student loans. They did not pursue and substantial reforms. In fact, Republicans blocked a Senate bill that would have frozen the interest rate at 3.4% for another year from even being voted on.
House Republicans did vote for their destructive plan that would have added an estimated $15.6 billion to the total amount of student loan debt in the next decade. In the end, Congress’s compromise made interest rates variable, but with a cap. The ability to refinance would eliminate the uncertainty of student loan interest rates. Wisconsin is leading the nation by taking this issue, and I hope other states follow.
When I graduate from UW next May, I will be leaving without any debt. I benefit from entering the professional world not burdened by loan payments. If I decide to go to graduate school, which feels like a requirement for the current job market, I know I will need to take out loans.
There is nothing wrong or shameful about needing a loan to help finance an education. With the proposed bill, I take comfort in knowing that I will receive all the information I need before signing a loan. Additionally, the system would be set up to help me pay the loan back quickly and fairly.
If the Higher Ed, Lower Debt bill passes, the prospect of going to graduate school becomes a lot less scary and a far more achievable goal.
I am fortunate to attend the University of Wisconsin-Madison. I want all of my peers to be invested in and excited about receiving a phenomenal education. The Higher Ed, Lower Debt Bill creates a system that allows students to focus on school now, make educated decisions about how they are paying for school, and helps them afford their payments later.