MADISON, Wis. — Wisconsin’s U.S. Sen. Ron Johnson could be the deciding vote in the U.S. Senate on legislation authored by Sen. Elizabeth Warren, and sponsored by Sen. Tammy Baldwin, to allow student loans to be refinanced. In June, the Senate fell just four votes short of overcoming a Republican-led procedural motion to take up the bill with five Republican senators and one Democratic senator absent the day of the vote. A second Senate vote on Sen. Warren’s bill may occur as early as Tuesday.
“Now is where the rubber meets the road for Sen. Ron Johnson and the 812,000 federal student loan borrowers in Wisconsin,” said Scot Ross, One Wisconsin Now Executive Director. “This is a market-based solution that would allow student loan borrowers the simple right to refinance their loans at a time when we have historically-low interest rates. It’s a simple question for Sen. Johnson: Should student loan borrowers be able to refinance their loans, just like you can with a mortgage, a car loan or any other loan?”
Nationally there are over 40 million student loan borrowers with over $1.2 trillion in debt. According to statistics from the federal Department of Education, 812,000 borrowers owe over $18.2 billion in federal student loan debt in Wisconsin. Fiscal estimates of the federal refinancing legislation project 20 million borrowers would refinance their loans within 18 months. White House projections show an estimated 515,000 Wisconsin borrowers would take advantage of the ability to refinance their loans.
Original research by One Wisconsin Institute dramatically illustrates the need for help for student loan borrowers to keep the current $1.2 trillion debt crisis from becoming a full-blown economic catastrophe. They found that student loan debt has 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.
“Thanks to champions like Sen. Tammy Baldwin, the fight to restore fairness for student loan borrowers continues. They’ve worked hard for their education and took on the personal responsibility of paying for it. That should earn them a fair shot at the middle class, not a multi-decade debt sentence,” said Ross.
Wisconsin has become national ground zero on the fight for student loan debt reform. With a Republican U.S. Senate minority blocking common sense reforms and Rep. Paul Ryan’s Republican-led U.S. House of Representatives unwilling to even debate the issue, Wisconsin’s student loan borrowers have seen state Democrats take the lead in proposing groundbreaking state reforms.
In October 2013, Rep. Cory Mason (D-Racine) and Sen. Dave Hansen (D-Green Bay) introduced common sense reforms including refinancing and a tax break for borrowers in their historic Higher Ed, Lower Debt Act. Despite having 54 co-sponsors, Gov. Scott Walker’s Republican allies killed the bill. Democratic gubernatorial candidate Mary Burke included these proposals in her comprehensive jobs and economic development blueprint for the state.
“Leaders like Sen. Baldwin, Reps. Mark Pocan, Ron Kind and Gwen Moore have provided leadership on the federal level for student loan borrowers, while Rep. Mason, Sen. Hansen and Mary Burke have made student loan debt reform their priority. These leaders recognize student loan reform is the right thing to do – for both borrowers and for Wisconsin’s economy and jobs.”
One Wisconsin Now has become a nationally-recognized leader on student loan debt reform, regularly appearing on state and national media as an expert on the causes and solutions to the crisis.