With increasing tuition fees and an average student debt of $28,000, an overflowing crowd of lawmakers, students, university officials and alumni came together Wednesday at a public hearing to discuss the implications of a new bill that would give students the ability to refinance and lower their federal loan interest rates.
The bill, introduced by Rep. Cory Mason, D-Racine, and Sen. Dave Hansen, D-Green Bay, seeks to establish the Wisconsin student loan refinancing authority that would be responsible for creating and implementing a program for Wisconsin residents to refinance their federal loan agreements.
University of Wisconsin students and alumni testified at the hearing, emphasizing the burden student loan debt has on individuals as they try to continue their education past their undergraduate degrees or try to start lives on their own.
“I have federal loans, subsidized and unsubsidized, which total to around $36,000,” Mia Akers, a UW junior and Associated Students of Madison vice chair, said. “Student loan debt has really affected whether I really want to go to law school.”
Hansen said this bill was important because it would give some support to students who often times are looking at 20 years or more of debt repayment. Currently in the United States, the profit from interest rates on student debt loans sits at $66 billion and is on the rise, Hansen said.
A major point of concern among lawmakers at the hearing was the lack of counseling services that students receive regarding their loan plans. The bill calls for institutions of higher education to put mandatory loan counseling into place for students who seek to take out a student loan, an aspect of the bill Mason pointed out as crucial.
“Being the first state in the country to offer student loan refinancing could make Wisconsin a warm climate for businesses in industries that require a bachelor’s or advanced degrees for employment as well as those looking to expand,” Hansen said. “It could turn the current ‘brain drain’ into ‘brain gain.’”
The committee heard dozens of accounts from undergraduate and graduate students, alumni and working professionals who are burdened by student debt. One woman was brought to tears as she explained because she would still be paying off her own college loans, she would not be able to save up for her children’s educations. The combined student debt in Wisconsin alone reaches nearly $20 billion.
Susan Fisher, UW director of financial aid, said students should be more careful when making the decision to take a loan. Fifty percent of students who take out a federal loan are not in financial need of it, she said.
“The Higher Ed, Lower Debt bill is an important step toward providing real relief to Wisconsin families and helping to get our economy back on track, ” Sen. Jennifer Shilling, D-La Crosse, said in a statement. “By preventing Wall Street banks from charging unreasonable interest rates, we can make higher education more affordable and help families achieve the American Dream.”