MADISON, Wis. — Congressman Paul Ryan unveiled his new federal budget scheme, and according to One Wisconsin Now Executive Director Scot Ross, betrays the economic well-being of America’s middle class by failing to address the trillion-dollar student loan debt crisis while sending even more tax breaks to the wealthy and corporations.
“Rep. Ryan’s budget proposes giving more to the wealthiest while making devastating cuts to programs on which the middle class and the most vulnerable in our society depend. But, as he’s done with prior budget schemes, he betrays the economic well-being of the middle class by failing to take on the real debt crisis they face — one trillion dollars in student loan debt.”
Original research conducted by the One Wisconsin Institute found student loan debt has a dramatic, negative effect not just on students and families but also the state economy:
- Individuals with bachelor degrees with student loan debt were making average monthly payments of $350 on loans with an average term of nearly 19 years and those with advanced degrees had monthly payments averaging $448 on loans with an average term of 22 years.
- Over $200 million in annual new car sales are lost as a direct result of student loan debt and households with student loan debt are significantly more likely to rent rather than own their home.
- Over 85% of renters reporting solid middle class incomes between $50,000 and $75,000 were making student loan payments.
A new report from the Federal Reserve Bank of New York paints a grim picture of the student loan debt crisis, and confirms the findings of a One Wisconsin Institute study on the severe, negative impact of student loan debt on Wisconsin’s economy. The New York Federal Reserve Bank reported, “growth in student loan balances and delinquencies was accompanied by a sharp reduction in mortgage and auto loan borrowing.” In addition, the research revealed student loan debt is the second largest consumer liability, exceeded only by mortgage debt, the number of borrowers and borrowers’ debt has risen 70% since 2004 and loan delinquency rates exceed 30%.
Ross concluded, “The trillion dollar student loan debt crisis is demonstrably dragging down our economy and stands between a generation of college graduates and their share of the American dream. Rep. Ryan’s budget betrays us all by allowing big banks to continue to steal our future.”