Students and Borrowers Call for Reforms Not Empty Rhetoric to Stem Crisis of College Affordability and Loan Debt
Stories of Students and Borrowers, Research on Consequences Points to Urgent Need for Action
WAUSAU, Wis. — At a town hall forum on college affordability and student loan debt hosted by State Senator Julie Lassa and Representative Katrina Shankland at UW-Marathon County today, students and borrowers sent a clear message: it’s time for real reform and not election year gimmicks. Representatives of One Wisconsin Now, a leading advocate for student loan reform, also appeared at the event to present findings from their research on the root causes of skyrocketing student loan debt and the serious economic implications of the $1.3 trillion national crisis.
“Two things are clear: the student loan debt and college affordability crises are real challenges facing the people and economy of Central Wisconsin, and it’s real reform, not election year gimmicks, that are needed,” said One Wisconsin Now Executive Director Scot Ross.
At the event, students and borrowers shared their stories about the challenges they face in affording higher education and job training and how student loan debt is affecting their families and the economic decisions they make.
Ross said research by One Wisconsin Institute confirms what students and borrower alike had to say. The economic impact of student debt is significant and negative on the Wisconsin economy with borrowers much more likely to rent versus own their home and over $200 million in new car sales lost annually due directly to student loan debt.
According to additional research by One Wisconsin Institute and the national think tank Demos, declining financial support for higher education by the state of Wisconsin has shifted costs onto consumers, increased student loan debt and decreased the affordability of higher education. The study finds the confluence of the these factors is “endangering the quality of its institutions of higher learning, threatening the state’s economic competitiveness and the future of its young people.”
According to recent memo from the nonpartisan Legislative Fiscal Bureau, under Gov. Walker and the Republican controlled legislature, funding for the University of Wisconsin System and Technical Colleges has been reduced by nearly $1 billion when compared to the year before Walker entered office. In addition they have hiked tuition by 11% and so woefully underfunded financial aid that 41,000 students eligible for aid received none.
Under the Higher Ed, Lower Debt Act, first introduced in 2013 and again in 2015 by legislative Democrats, a state authority would be created to help borrowers refinance their student loans, just like you can with a mortgage. The measure also extends a state tax break to payments on student loans that could provide an annual tax benefit of over $530 for an individual or $1,000 for a couple and provides additional consumer information about higher education loans.
Meanwhile, according to Ross, a “woefully incomplete” plan touted by Walker and state legislative Republicans denies any help reducing monthly student loan payments by not allowing Wisconsin borrowers to refinance, like you can with a mortgage. According to their own estimates their scheme provides zero benefit to 97 percent of the estimated one million Wisconsinites with student loan debt.
He concluded, “Students and borrowers have worked hard to get their educations and they’ve taken on the personal responsibility to pay for it. But right now the system isn’t treating them fairly. They’ve earned fair shot at the middle class, but policy makers are going to have to enact real reform if they’re going to get it.”