MILWAUKEE — One Wisconsin Institute today joined U.S. Representative Gwen Moore, students and higher education advocates at an event exposing the disastrous consequences of allowing federal student loan interest rates to double on July 1. Scot Ross, the Institute’s Executive Director spoke on the results of his organization’s research showing the detrimental impact of student loan debt on not just students and their families, but the entire state economy.
Ross commented, “The trillion dollar student loan debt is a clear and present danger to our economy. It is not right that banks and the government are profiting to the tune of billions of dollars. We need fighters like Rep. Moore to help stop federal student loan interest rates from doubling.”
Original research conducted by the One Wisconsin Institute found that student loan debt’s impact is not confined to students and their families, but is a significant drag on the entire Wisconsin state economy with:
- Graduates with Bachelor degrees reporting making average monthly payments of $350 for an average term of 18.7 years;
- Those attending technical college or earning Associate degrees reporting monthly payments of $288 for a term of 16.8 years;
- Economy-wide detrimental impacts of this debt including over $200 million in lost new auto sales every year; and
- Significantly lower rates of home purchasing and ownership among graduates earning solid middle class incomes but saddled with student loan debt.
Ross noted that both Wall Street banks and the federal government are making billions of dollars in profit from the interest on student loans. Allowing rates to increase by inaction, or rise to variable rates as Congressional Republicans have proposed, would only deepen the crisis. Rep. Moore and Wisconsin’s Democratic Congressional delegation have voted to close several corporate tax loopholes to maintain the current cap on student loan interest rates.
“Students, their families and our economy cannot afford allowing student loan interest rates to double. We cannot allow the trillion dollar student loan debt crisis to become the two-trillion dollar crisis. And we must prevent future generations from finding that their higher education at a university or job training at a technical college has become a sentence to decades of debt instead of the pathway to the middle class,” concluded Ross.