MADISON, Wis. — At a meeting of the University of Wisconsin System Board of Regents meeting this week, outgoing UW-Madison Chancellor David Ward reportedly said, “We’re embarrassing ourselves by having bargain-basement prices.” One Wisconsin Now Executive Director Scot Ross said that the sentiment expressed by Ward shows a substantial disconnect about financing higher education and the impact of exploding debt on borrowers.
“When we already have 37 million Americans saddled with over one trillion in student loan debt, it’s troubling that the outgoing leader of the state’s flagship university is concerned that tuition is too low,” said Ross.
Students and middle class families are being squeezed by skyrocketing tuition and big banks and the federal government that make billions in profit off of the interest on student loans. Nationally, student loan debt is the second biggest form of consumer debt, exceeded only by home mortgage debt and the University of Wisconsin System’s own figures reveal that two-thirds of graduates leave school with student loan debt that averages $27,000.
According to original research by One Wisconsin Institute the economic impact of the trillion-dollar student loan debt crisis is felt across the entire economy, not just students and their families. Individuals with bachelor degrees with student loan debt were making average monthly payments of $350 on loans with an average term of nearly 19 years. Over $200 million in annual new car sales are lost as a direct result of student loan debt and households with student loan debt are significantly more likely to rent rather than own their home. In fact, the research found that over 85% of renters reporting solid middle class incomes between $50,000 and $75,000 were making student loan payments.
The students at UW-Madison and at the other universities, technical colleges and job training programs across Wisconsin — are doing the right thing. They’re taking personal responsibility for paying for the education they need to get ahead.”
He added that the UW ought to be proud that their tuition is a relative bargain. Instead of seeking to justify increased tuition, solutions like allowing students the ability to refinance loans like is allowed with mortgages, tax deductions for interest on student loan payments for borrowers and increased aid for those who qualify are needed to help alleviate the student loan debt crisis.
Ross concluded, “We ought to be focused on reforming the system to help make sure that the hard work and personal responsibility of students is rewarded with a fair shot at joining the middle class, not punished with decades of student loan debt.”