Op Ed

Walker Dodges Student Debt Crisis

1 million state residents have $19 billion student loan debt, Walker does little.

By - Feb 2nd, 2017 11:51 am
Scott Walker

Scott Walker

The student loan debt crisis in not a new phenomenon that only burdens a select few. It is a state and national crisis, it is a multi-generational crisis and it is a worsening crisis. There are 43 million Americans with over $1.4 trillion in student loan debt, including nearly 1 million Wisconsinites with over $19 billion in federal student loan debt alone.

The system is broken and isn’t treating borrowers fairly. Consider, for example, that you cannot refinance a federal student loan with the federal government that provided you with that loan.

We need reform, and we need our elected leaders to step up and lead. But for the Wisconsinites who worked hard to get their higher education and took on the personal responsibility to pay for it, their governor is dodging the issue. Instead of offering solutions, he told them in his 2017 state of the state speech that they should call a bank.

With this statement Gov. Walker is either being incredibly naive or purposely disingenuous on the student loan debt crisis. If banks could have solved a problem that would have gotten them 43 million customers, don’t you think they already would have?

The simple fact is you ought to be able to refinance your student loan, just like you can with a mortgage or a car loan. And the state and federal government can, and should, help make that happen.

And Gov. Walker ought to take responsibility for helping fix a student loan debt crisis his policies have contributed to worsening. On his watch, Wisconsin ranks among the top five states in the nation for percentage of college graduates with student loan debt, with 70 percent of the class of 2015 graduating with nearly $30,000 in debt along with their degree.

We got here in part because he and the Republican led legislature have cut funding for higher education by record amounts, underfunded financial aid for eligible students and hiked tuition by double digits. The result is that students are bearing an increasing share of the cost of higher education, and they are borrowing more to get the education they need.

And it is not just young college graduates bearing this burden. Fifteen percent of student debt is held by people over the age of fifty, over 155,000 Americans over the age of 60 had their social security benefits garnished to pay student loan debts.

It is important for borrowers and for our entire state economy that we act. Original research by One Wisconsin Institute 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. Other research has found student debt diminishes the ability of borrowers to save for retirement or for a child’s education and impedes entrepreneurship.

Student loan borrowers aren’t asking for a bailout. But they should be able to expect a little common sense. For example, in the last two legislative sessions, over 50 Wisconsin Democratic state legislators have sponsored the Higher Ed, Lower Debt Act, a plan to create a state authority 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 and provides additional consumer information about higher education loans.

So here’s a little advice for Gov. Walker, stop dodging the student loan debt crisis and start leading by supporting real, common sense reform.

Scot Ross is the executive director of One Wisconsin Now, a progressive statewide advocacy organization and a national leader for student loan reform.

Categories: Education, Op-Ed

2 thoughts on “Op Ed: Walker Dodges Student Debt Crisis”

  1. Kevin says:

    The problem starts and ends with the federal government: guaranteed student loans need to be constrained. Although I think every person should pursue their passion, the government should prioritize and heavily emphasize trade schools and the fields of science, engineering, education, and health care (better known as the fields with JOB growth).

    Other studies are important in today’s society, but it seems foolish to borrow funds to pursue a careers in sports management, english, archaeology, fashion, gender studies, etc. To me, these studies are better known as dead-end degrees; I have one! Most of these degrees require talent that cannot be “taught” (see theatre, music, art, etc.). Also, the job market is overly saturate when thousands of college grads list liberal arts as their degree. In my experiences, recent college grads with these dead-end degrees are mostly unwilling to pursue careers outside of their field thus becoming your next barista or part-time retail worker “until they find a real job”.

    As a college graduate with a degree I will never fully utilize, I would greatly benefit from refinancing my loans that have an interest rate of 4.88% and 7.75%. Nearly three years after I graduated, I’m now 25 and want to pay off my student loans as soon as possible. I was very fortunate to find a career **outside** my field of study that provides a very livable wage with on job training.

    Perhaps my situation and perspective is different than the 999,999 Wisconsin residents in student loan debt, but I think the government needs to not only reign in student loan lending, the government also needs to encourage schools to lower costs and to provide lending education to prospective students.

  2. Question says:

    This article doesn’t address the annual multi billion dollar industry know as “Spring Break”.

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