Seceding from the Union or Providing Relief from Student Loan Debt Crisis: Which is Better for the Wisconsin Economy?
Wisconsin State Democratic Party Set to Adopt Resolution Supporting Student Loan Debt Refinancing Measures
MADISON, Wis. — At their state party convention this year, Wisconsin Republicans engaged in a well-publicized debate over a party platform resolution authorizing the state to secede from the union. Democrats meanwhile are set to take on serious economic issues, like what to do about the $1.2 trillion student loan debt crisis that ensnares 40 million Americans, including an estimated nearly 1 million Wisconsinites, at their party convention this weekend.
One Wisconsin Now Executive Director Scot Ross commented, “It seems some Republicans may believe the solution to Wisconsin’s dismal national job rankings is to leave the union. But there are more practical solutions out there, like passing common sense solutions to take on the student loan debt crisis in Wisconsin.”
One of the resolutions up for inclusion in the party platform at this year’s Democratic convention calls for action on measures to help alleviate the $1.2 trillion student loan debt crisis — including the Higher Ed, Lower Debt Act introduced in the state legislature, loan refinancing legislation supported by the state’s Democratic congressional delegation, and the loan refinancing and tax saving measures in gubernatorial candidate Mary Burke’s economic plan.
At $1.2 trillion nationally, student loan debt exceeds credit card and auto loan debt and is topped only by home mortgage loans among consumer debt. Original research by One Wisconsin Institute found that borrowers reported making significant monthly payments over long terms. For example, on average, borrowers with a bachelors degree were making monthly payments of nearly $350 for almost 19 years. These debts have a significant and negative effect on critical drivers of the economy, like new car and home sales, as borrowers are significantly more likely to buy a used versus new car and rent versus own their home.
“Higher education and job training are supposed to be the path to the middle class, and not a multi-decade debt sentence. Borrowers have worked hard and taken on the personal responsibility of paying for their education. They’re not asking for bailout, but they sure deserve a system that treats them fairly,” said Ross.
The Higher Ed, Lower Debt Act, 2013 Senate Bill 376 and Assembly Bill 498, proposed helping state residents refinance their student loans and allow borrowers to deduct their student loan payments on their state taxes. Republicans in both the Senate and Assembly voted en masse against allowing the bills to be debated by the full legislature. For his part, Gov. Scott Walker has refused to endorse meaningful solutions for the nearly 1 million state residents with student loan debt and has ignored requests to reconvene the legislature to consider the Higher Ed, Lower Debt Act.
Ross concluded, “There’s no denying the fact that student loan debt is a drag on our economy and the system is in desperate need of reform. It is encouraging that at least one political party in Wisconsin appears willing to stand behind common sense solutions to this crisis.”