MADISON, Wis. — A standing room only crowd packed the room to share their stories and call for action on the student loan debt crisis at today’s Senate committee hearing on the Higher Ed, Lower Debt Act, Senate Bill 376. One Wisconsin Now Executive Director Scot Ross joined the call for action and in his testimony shared original research detailing the toll of $1.2 trillion in student loan debt on borrowers’ personal finances and Wisconsin’s economy.
Ross said, “Rising levels of student debt is now a national crisis. And if we fail to act, it will blossom into an economic catastrophe undermining the American ideal that hard work and a good education or job training are the keys to a better economic future.”
According to the nonpartisan Legislative Fiscal Bureau there are over 750,000 Wisconsinites currently paying back federal student loans alone. Original research conducted by One Wisconsin Institute found the economic impact of student loan debt extends far beyond just borrowers and has a significant, negative impact on the entire state economy. Wisconsinites with solid middle class incomes and student loan debt are far more likely to rent versus own their own their home and over $200 million in new vehicle sales are lost on an annual basis due to student loan debt.
Catherine Ruetschlin, policy analyst with the national think tank Dēmos, also testified to the committee presenting the findings of their research showing how student loan debt is severely hurting the economic success of borrowers. In their study, At What Cost? How Student Debt Reduces Lifetime Wealth, Dēmos found the $1 trillion plus in current student loan debt will cost borrowers $4 trillion in lifetime wealth largely because they are unable to save for their retirement and acquire assets like a home while paying off their education debt.
The Higher Ed, Lower Debt Act offers common sense solutions like allowing refinancing of loans, expanding a current state tax deduction to include student loan payments and providing borrowers and legislators with more information upon which to make their decisions.
Ross concluded, “The Higher Ed, Lower Debt Act is not a handout to borrowers. It is instead a step towards restoring fairness for people who have done the right thing – working hard to get an education and taking on the personal responsibility for paying for it.”