MADISON, Wis. — Recent statements from U.S. Sen. Ron Johnson on student loan debt reveal a need for him to go back to school on the issue, according to One Wisconsin Now Executive Director Scot Ross. At a town hall earlier this week Johnson put his knowledge gap on display, claiming that education aid from the federal government was responsible for the $1.2 trillion student loan debt crisis.
“No one has ever accused Sen. Johnson of being the sharpest knife in the drawer, but his recent statements on student loan debt are shockingly ill-informed, even for him,” said Ross. “Sen. Johnson needs to go back to school on the student debt issue and get his facts straight.”
Among Johnson’s reported comments was an allegation that “…you’ve got kids coming from an affluent background, taking advantage of all these student loan programs and grants for higher education, and who’s paying for that? … In many cases, working class families – the middle class who aren’t going to college.”
Johnson went on to advocate for helping solve the student debt crisis by eliminating federal financial aid and de-emphasizing people getting a college education.
Ross noted that federal financial aid programs are need based and exclude students and families with middle class incomes. In addition, federal student loans charge borrowers interest. In fact, the program is extremely lucrative for the government – projected to earn $127 billion in profits from the interest on student loans over the next ten years.
“Borrowers have worked hard to get their education or job training, and they’ve taken on the personal responsibility of paying for it. They’re not asking for a bailout, but they deserve a system that treats them fairly,” commented Ross.
Student loan debt has skyrocketed in recent years as students and borrowers are increasingly squeezed by a system of decreasing government support for higher education, skyrocketing tuition and profiteering on student loans by Wall Street banks and even the federal government. Student loan debt today is held by over 40 million Americans and stands at $1.2 trillion, exceeding all other consumer debts except home mortgage debt.
According to original research by One Wisconsin Institute analyzing the impact of student loan debt in Wisconsin and nationally, there are significant and negative economic ramifications attributable to student loan debt. Borrowers are significantly more likely to own a used versus new car and to rent versus own their home.
Legislation to help relieve the burden of federal student loan debt by allowing them to be refinanced has been proposed by Democrats in the U.S. Congress, including Wisconsin U.S. Representative Mark Pocan and Senator Tammy Baldwin.
Ross concluded, “Sen. Johnson has it exactly one hundred percent wrong on student loan debt. There are common sense solutions, like allowing loans to be refinanced, that can and will help borrowers. But cutting financial aid for eligible students or blaming hard working borrowers and telling them to set their sights lower, as Sen. Johnson has done, are guaranteed failures.”