MADISON, Wis. — In addition to being the site of a University of Wisconsin System campus, the Eau Claire area is home to thousands of the estimated 753,000 Wisconsinites with federal student loan debt. Monday evening, One Wisconsin Institute hosted the first in a series of community forums being held across the state to talk about the $1.2 trillion student loan debt crisis and the Higher Ed, Lower Debt Act, state-based legislation providing common sense relief to student loan borrowers and their families.
One Wisconsin Institute Executive Director Scot Ross commented, “What we heard on Monday from borrowers in the Eau Claire community were not people asking for a bailout, but for a system that treats them fairly and allows them to get their shot at the American Dream.”
Joining Ross were State Representative Cory Mason, author of the act, legislative co-sponsors Representatives Dana Wachs and Steve Smith and community members telling their stories about how student loan debt is affecting their families and their economic well being.
The common sense provisions of the Higher Ed, Lower Debt Act could save borrowers and their family thousands of dollars over the life of their loans by:
- Creating a state authority to help borrowers refinance their student loans, just like you can a home mortgage;
- Allowing borrowers to deduct their student loan payments on their state income taxes, just like you can with home mortgage interest;
- Requiring borrowers be given detailed information before entering into loan agreements, offer counseling to students and parents on the implications of student loans and require the state to collect and disseminate information about private lenders and maintain a ranking system; and
- Tracking information about student loan debt in the state to help policy makers better understand the depth and breadth of the debt crisis in Wisconsin.
Nationally nearly 40 million Americans have an estimated $1.2 trillion and in Wisconsin the non-partisan Legislative Fiscal Bureau estimates 753,000 individuals hold federal loan debt alone. Original research by One Wisconsin Institute found that the average length of loan repayment ranged from nearly 19 years for bachelors degrees to over 22 years for graduate and professional degrees with monthly payments of $350 for undergraduate degrees and $448 for advanced degrees.
Ross commented, “Student loan borrowers have done the right thing, working hard to get ahead with school or job training and taking on the personal responsibility to pay for it. But they’re increasingly squeezed by skyrocketing tuition, cutbacks in state funding for higher education and job training and profiteering by big banks and the federal government.”
The Institute’s research also found that the fallout from student loan debt poses a clear and present danger not just to borrowers and their families, but the entire state economy. Borrower’s debt directly resulted in over $200 million in new vehicle sales lost annually and borrowers are two-thirds more likely to rent versus own their home.
“The Higher Ed, Lower Debt Act would be a huge step towards putting the system back on the side of the middle class and students of Wisconsin, giving them a fair shot at the American Dream, and providing our state economy with a much needed economic boost,” concluded Ross.