MADISON, Wis. — In the lead up to his 2016 State of the State speech Gov. Scott Walker has been touting a college debt and affordability initiative. One Wisconsin Now Executive Director summed up the state of Walker’s agenda on the issue, that denies any help lowering monthly payments for borrowers and fails to deliver any relief to at least 97 percent of individuals with student loan debt as, “woefully incomplete.”
“Gov. Walker has a glaring omission in his plan on student debt – any help lowering the monthly payments for Wisconsin borrowers,” said Ross. “Much like his own academic career, Scott Walker’s response to the student loan debt crisis is woefully incomplete.”
New data underlines the urgent need for action on the student loan crisis in Wisconsin. A comprehensive 50 state study on student loan debt for 2014 released by The Institute for College Access and Success (TICAS) finds seventy percent of Wisconsin’s graduates have student loan debt, the third highest percentage in the nation. The average debt load of over $28,800 ranks Wisconsin seventeenth nationally. The study also found over the last decade Wisconsin graduates were saddled with a seventy four percent increase in the amount of debt upon graduation and that ten percent more graduates were leaving school with student debt.
The impact of this growing debt doesn’t just impact borrowers and their families. Original research from One Wisconsin Institute found that student loan debt has a significant and negative impact on the entire state economy. Borrowers are much more likely to rent versus own their home and over $200 million in new car sales are lost annually in Wisconsin due directly to student loan debt.
A trifecta of wrong-headed policy choices by Walker and the Republican legislature is unsurprisingly, not helping. A recent memo from the nonpartisan Legislative Fiscal Bureau notes that funding for the University of Wisconsin System and Technical Colleges has been reduced by nearly $1 billion when compared to the year before Walker entered office. In addition Walker and the Republican majority hiked tuition by 11% in their budget and so woefully underfunded financial aid that 41,000 students eligible for aid received none.
Despite the exponentially growing economic crisis, Walker has steadfastly refused to support the Higher Ed, Lower Debt Act that is supported by 50 state legislators. The bill would create a state authority to help borrowers refinance their student loans, just like you can with a mortgage. The measure also extends a state tax break to payments on student loans and provides additional consumer information about higher education loans.
Based on data from the U.S. Department of Education the Obama Administration estimated that 515,000 of the over 800,000 Wisconsin borrowers with federal student loan debt would take advantage of the opportunity to refinance those loans.
Ross concluded, “Wisconsin borrowers have earned a fair shot at the middle class. But Gov. Walker and his legislative cronies, who the enacted the policies driving them deeper into debt, continue to obstruct real solutions. Wisconsin deserves better.”