Governor ‘Incomplete’ on Student Debt

It’s certainly not tricky math. A former member of the University of Wisconsin System Board of Regents about the state’s $19 billion student loan crisis summed it up in these numbers:

In 2000, ten cents of every dollar of general purpose revenue funding in state’s biennial budget went to funding higher education.

Today, after the reckless of Gov. Scott Walker’s blistering cuts that number is down to 4.7 cents.

We’ve seen our beloved University of Wisconsin system eviscerated by nearly $800 million in Walker cuts. We’ve seen Wisconsin’s proud technical college system — the nation’s oldest — endure a 30 percent cut in state funding as it celebrated its centennial anniversary. All told, cuts of $1 billion.

We’ve seen over 40,000 eligible students denied any financial aid because of the failed priorities of Gov. Walker. On the campaign stump the governor touted non-stop about a tuition freeze, but one which came after his own budget increase tuition a full 11 percent.

Gov. Walker has offered his “solution” to the student loan crisis facing approximately one million Wisconsinites and their families, and the verdict is simple: not one student loan borrower in Wisconsin will see their monthly payments reduced by one cent.

This comes after five years of a Wisconsin economy lingering near the bottom in the Midwest and nationally and after a year in which saw 10,000 new layoff notices were doled out.
A plan that leaves 97 percent of the student loan borrowers, many enduring student loan interest rates of 6, 8, 12 even 14 and 15 percent, getting nothing because Gov. Walker opposes the state plan proposed by Democrats which would allow student loan borrowers the market-based solution of being able to refinance their student loans at a lower rate.

To be clear: allowing student loan borrowers in Wisconsin to refinance their loans, just like you can a mortgage or an auto loan, would not cost taxpayers a dime.

More importantly, it would bring badly-needed relief and restore some economic power to hundreds of thousands of student loan borrowers. According to figures from the White House, a similar federal plan that would allow borrowers to refinance their federal student loans would bring immediate relief to 515,000 of Wisconsin’s 812,000 federal student loan borrowers.

The federal refinancing bill authored by Sen. Elizabeth Warren and our own Sen. Tammy Baldwin has been blocked multiple times by Republican filibuster in the Senate by members like Ron Johnson and utterly ignored by the Republican-controlled House of Representatives, now led by Wisconsin’s Gen X poster child, Rep. Paul Ryan.

As Gov. Walker toured a series of university and technical colleges this week, he claimed his opposition to the state’s Higher Ed, Lower Debt student loan refinancing plan is based on his assessment that a plan in Connecticut has produced interest rates well under five percent.

I spoke to the Chair of the Connecticut House Banking Committee and author of the Connecticut refinancing legislation, Matthew Lesser, and he was incredulous about Gov. Walker’s numbers, given that Connecticut refinancing plan just passed into law — and which has not established its rates.

Lesser told me of Walker’s apparently intentional mangling of the facts, “Our new program isn’t scheduled to release its first rates until late spring, but we expect them to be lower than the Federal Parent PLUS Loan. If he actually wants to help Wisconsin borrowers, he should give us a call.”

The governor has also claimed that only a limited number of borrowers participate in a refinancing program established in 2014 in Rhode Island. Why? Well, the state of Rhode Island has offered low cost state-based education loans since 1981.

Make no mistake, Gov. Walker didn’t create Wisconsin’s student loan debt. But his attacks on higher education, combined with his anemic response to the $19 billion crisis, are much like his own college career: Incomplete.