MADISON, Wis. — In his nearly $68 billion state budget proposal, Gov. Walker larders special interests with sweetheart deals and doles out millions in tax breaks for the wealthiest Wisconsinites. But, according to One Wisconsin Now Executive Director Scot Ross, not one cent is spent to provide direct relief to students or their families being crushed by the trillion-dollar student loan debt crisis.
“Gov. Walker’s budget is offensive enough for what is in it, like tax breaks favoring the wealthiest, the radical privatization of K-12 education and cutting state help with health care for over 80,000 people. But it is an insult to middle class families and an affront to students that not a single cent in a $68 billion budget is spent on direct relief from the trillion dollar student loan debt crisis for them,” commented Ross.
Original research conducted by the One Wisconsin Institute found student loan debt has a dramatic, negative effect not just on students and families but also the state economy. 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 survey found over 85% of renters reporting solid middle class incomes between $50,000 and $75,000 were making student loan payments.
The Consumer Financial Protection Bureau, currently researching policy alternatives on the student loan debt crisis, also reports that student loan debt is slowing economic recovery, in particular depressing rates of auto and home purchases by young adults.
According to Ross, “Our research and national experts research shows that student loan debt is a significant impediment to economic recovery. You’d think Gov. Walker, presiding over one of the worst records for jobs creation in the nation, would want to do something about that by taking on the issue.”
Gov. Walker’s 2011-13 budget imposed a $107 million tuition hike on University of Wisconsin System students and froze student financial aid at 2010 levels. In his recently announced 2013-15 budget plan, Gov. Walker again freezes financial aid at 2010 levels while giving the UW System unlimited tuition increase authority.
Ross concluded, “Gov. Walker’s indifference to the trillion dollar student loan debt crisis is making things worse. He’s not only harming middle class and working families and driving students deeper into debt, but he’s hurting our economy by taking millions of dollars away from economic growth and instead sending it to the big banks.”