MADISON, Wis. — A new national coalition, Higher Ed Not Debt, is bringing advocates and borrowers together in a campaign to restore fairness to a student loan system gone horribly awry. On the March 6 “Day of Action” legislators, advocates and borrowers gathered to call for reforms like the Higher Ed, Lower Debt Act before the state legislature.
One Wisconsin Now Executive Director Scot Ross commented, “Student loan debt is a $1.2 trillion national economic crisis, and a huge drag on the budgets of hundreds of thousands of Wisconsin households. Student debt is keeping hardworking borrowers from getting the fair shot at the middle class their education should provide them with.”
One Wisconsin Now has joined forces with a national coalition to shake up the system. The Higher Ed Not Debt coalition was formed with four key goals: addressing the existing $1.2 trillion of debt; increasing the affordability and quality of higher education; combating the privatization of higher education and the role of Wall Street in compounding the student debt crisis; and sparking civic engagement and political participation among young people.
In response to the deepening crisis and intransigence of Wall Street and gridlock in Washington, D.C., Representative Cory Mason and Senator Dave Hansen introduced the Higher Ed, Lower Debt Act in Wisconsin (Senate Bill 376 and Assembly Bill 498). Both the Senate and Assembly have held public hearings on the proposal that would:
- Create a state authority to help borrowers refinance their student loans, just like you can a home mortgage;
- Allow borrowers to deduct their student loan payments on their state income taxes, just like you can with home mortgage interest;
- Require borrowers be given detailed information before entering into loan agreements, offering counseling to students and parents on the implications of student loans and requiring the state to collect and disseminate information about private lenders and maintain a ranking system; and
- Track information about student loan debt in the state to help policy makers better understand the depth and breadth of the debt crisis in Wisconsin.
Wisconsin U.S. Representative Mark Pocan (WI-2) has also introduced legislation (H.R. 3047) to allow borrowers with federal student loans to refinance their loans to the lowest rate available for that loan.
Original research by One Wisconsin Institute points to the urgent need for reform with findings showing a significant negative impact of student loan debt on borrowers economic activity. Borrowers with an undergraduate degree in Wisconsin were making average payments of nearly $350 per month for almost 19 years. The economic impacts include over $200 million in lost new car sales annual and significantly lower rates of home ownership among student loan borrowers versus their economic peers without debt.
A national version of the Wisconsin research conducted by One Wisconsin Institute showed similar results, including that the auto industry loses $6.4 billion every year in new car purchases directly attributable to student loan debt.
Among the growing number of supporters of the Higher Ed, Lower Debt Act in Wisconsin are associations representing small businesses, social workers, dentists, teachers, organized labor and students.
“The hard work and personal responsibility borrowers showed to get an education and pay for it should earn them a a fair shot at the middle class, not a multi decade debt sentence. With our partners in the Higher Ed Not Debt coalition across the country and here in Wisconsin we’re going to keep fighting to put the system back on the side of the people,” concluded Ross.