Wisconsin now ranks among the top five states in the nation for percentage of college grads holding student loan debt, with the average Wisconsinite carrying around $30,000 in loans.
Student loan debt cannot be discharged in bankruptcy and is all but impossible to refinance as you can a mortgage or a car loan. A bill to change that in Wisconsin - 2015 SB 194, called the Higher Ed Lower Debt Act - has languished in the legislature for years while the problem has continued to grow.
Scot Ross, executive director of the public policy non-profit group One Wisconsin Now, said it's not just a problem that affects young people. He said 15 percent of student loan debt is held by people over age 50. "And this statistic ought to scare everybody: in the year 2014, 155,000 seniors over the age of 60 had their Social Security payments garnished because of student loan debt," Ross said.
The Higher Ed Lower Debt Act would create a state authority to help borrowers refinance their student loans at lower rates, and would give a tax break to those paying off student loans. Ross said he hopes the Act will get a fair hearing in this new legislative session. The student loan debt crisis is a problem in every state, Ross said, and while Wisconsin has played a leadership role by at least proposing legislation to help ease the crisis, part of the problem is the federal government itself, which profits greatly from student loans. "There was a study in 2013 that showed that the interest from student loan debt allowed the government to collect $51 billion," Ross said. "And to put that in perspective, that year the most profitable corporation in America, Exxon-Mobil's profits were $46 billion."
Ross said there are nearly 1 million Wisconsinites who owe more than $19 billion in student loan debt. He said the Walker administration is making the problem worse, by cutting funding for higher education in record amounts. Ross said a 2016 poll showed wide agreement that the Higher Ed Lower Debt Act should be passed.
"Bipartisan support at over 84 percent, so Republicans and Democrats both think this is a common sense solution," he said. "For whatever reason Governor Walker and his Republican legislative leaders do not. I would think they'd join us in trying to come up with real solutions."
