Action Needed on Student Debt Crisis

As families around Wisconsin attend graduation celebrations across our state, brighter futures are clouded by a growing burden. There is a debt crisis in America. It is the same debt crisis we faced four years ago, when student loan debt in America passed $1 trillion.

The total amount of student debt in the United States has tripled in the past decade and now stands at more than $1.4 trillion. This debt crisis demands action from Washington because it is holding back an entire generation and creating a drag on economic growth for Wisconsin and our country.

I have once again joined Senator Elizabeth Warren to take action to confront this crisis. We introduced the Bank on Students Emergency Loan Refinancing Act, legislation that would allow those with outstanding student loan debt to refinance at the interest rates offered to new borrowers in the current academic year. When a previous version of the bill came to the Senate floor for a vote three years ago, every Senate Democrat and three Senate Republicans supported moving it forward. Unfortunately, the legislation fell just short of breaking a Republican filibuster and died when that Congress ended.

Since the original bill was introduced, student loan debt has grown by about $200 billion. It is clear that the student loan debt crisis is getting increasingly worse, with no signs of slowing down. With federal student loan interest rates scheduled to rise again this summer, the urgency for Congress to address the student debt crisis and to allow borrowers to access today’s lower rates is stronger than ever. Key federal agencies like the Federal Reserve, the Treasury Department, and the Consumer Financial Protection Bureau have weighed in on the dangers of exploding student debt. It is a crisis that threatens our economy, and the futures of young people all across America.

This is real money. Money that isn’t going towards buying a car or a first home. Money that isn’t going toward supporting the local small businesses that are working so hard to move our economy forward. Money that isn’t going into growing our economy at a time when we desperately need stronger economic growth.

I have traveled across Wisconsin to hear from students struggling with student loan debt, and they have shared with me the burden that the cost of a higher education puts on them and their families.

I met one woman who is strapped with $600-per-month payments on her student loans. One graduate student said she lives with her fiancé’s parents to save money. Another said her husband borrowed against his 401(k) so that the couple could afford daycare for their children while she attends school.

With interest rates near historic lows, homeowners, businesses, and even local governments with good credit, regularly refinance their debts – but students have few options. This needs to change.

That is why I have cosponsored the Bank on Students Emergency Loan Refinancing Act and will continue to push to get the job done on this legislation so that we can give a much-needed break to young people struggling to build a future.

So where do we go from here?

One thing is sure: The budget introduced by President Trump this week takes us in the wrong direction for students.

Instead of addressing the student debt crisis, his proposal would slash supports for students. This includes subsidized loans, which keep low- and moderate-income students from accruing interest and seeing their debt grow before they even finish school, and the Perkins Loan Program, which provides affordable fixed-rate loans to our neediest students.

It even breaks a promise made to many teachers and law enforcement officers that they will get relief on their student loan debt. The Trump-DeVos budget proposal eliminates the Public Service Loan Forgiveness Program, putting a huge burden on people who have made a commitment to public service.

If you believe, like I do, that Washington needs to make higher education more affordable and has a responsibility to confront problems with solutions, then I need you to make your voice heard.

You get to decide whether we will make a difference in the lives of students who struggle with the cost of a higher education. Your engagement means you get to decide what our future looks like and whether it is defined by progress — or not.

I believe a college or technical school education should be a path to prosperity, not a path to indebtedness. So together, let’s push Congress to act on the student debt crisis and help give Wisconsin students a fair shot at building a stronger future for themselves.

Tammy Baldwin is a Democratic U.S. Senator from Wisconsin.