MADISON, Wis. — Student loan debt continues to rise at alarming rates in Wisconsin, slowing the state economy and preventing borrowers from getting the shot at the middle class they earned by working hard for a higher education and taking on the personal responsibility of paying for it. One Wisconsin Now Executive Director Scot Ross hailed the reintroduction today of the Higher Ed, Lower Debt Act as a common sense way to help hundreds of thousands of Wisconsinites by allowing them to refinance their student loans, just like you can with a mortgage.
“Student loan debt is a crisis that hurts not just borrowers but our entire economy,” said Ross. “The good news is that there’s a common sense way to help — allow borrowers to refinance their student loans and put more money in their pockets and the economy. Thanks to Rep. Cory Mason and Sen. Dave Hansen for again offering this serious solution to the student debt economic crisis.”
According to the federal government, there are over 800,000 Wisconsin residents owing over $18 billion in federal student loan debt alone. Many more used loans from private lenders to help finance their higher education or job training. Nationally there are 43 million Americans with student loan debt exceeding $1.3 trillion, an amount that exceeds both credit card and auto loan debt.
A report from One Wisconsin Institute in association with national think tank Demos, Wisconsin’s Great Cost Shift, found that the state’s de-investment in higher education and rising tuition has shifted costs on to students. The consequences of reduced consumer spending on major purchase like homes and autos and billions in lost wealth for student loan borrowers threaten the state’s economic competitiveness and the future of its young people.
Earlier research from One Wisconsin Institute also found student loan debt has a significant, negative impact on major consumer purchases in Wisconsin. Borrowers were making average monthly payments of $388 on their student loans and were significantly more likely to rent versus own their home and buy a used versus new automobile.
In the 2013 session Wisconsin’s first in the nation state legislative effort to restore fairness for borrowers by helping them to refinance their student loans garnered 54 sponsors and received a public hearing before both Senate and Assembly standing committees. However, Republicans blocked efforts to bring the measure to a vote and Gov. Walker failed to offer support for the measure. An effort by Democratic members of the Joint Committee on Finance to include refinancing provisions in the 2015 state budget was rejected by the GOP on a party line vote.
Ross concluded, “Student loan borrowers have done the right thing. They worked hard to get their education and stepped up to take on the responsibility of paying for it. Now it’s time for their elected leaders to step up for them and put common sense before politics by allowing them to refinance their student loan, just like you can with a mortgage.”