In an effort to combat rising student debt in the state, Gov. Scott Walker announced University of Wisconsin Credit Union will expand its membership eligibility to all Wisconsin residents who have previously attended college anywhere in the U.S. or abroad.
In the past, UW Credit Union only served students who attended a UW System or Madison College institution. Under the new plan, membership will be offered to all Wisconsin residents, regardless if they attended a UW System or Madison College school.
For out-of-state students who attended a UW System or Madison College school, they will still be eligible to refinance their loans through UW Credit Union.
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“Today we’re here to celebrate in helping not students and alumni only in the UW System, but all over the state,” Walker said at a Tuesday news conference.
One of the main concerns Walker said he has frequently heard in public hearing sessions is how parents and students should plan for college. To address some of these worries, state officials created a new website to offer students and parents information on how to finance their higher education.
The website will also function to inform graduates of the 13 Wisconsin banks and credit unions that offer refinancing for student debt.
While UW Credit Union has changed its membership eligibility, the rates for loan refinancing will still vary per person. Typically, they offer interest rates ranging from 2.2 to 6.8 percent, which Walker called “competitive.”
The process of how one may refinance their student loans is no different than refinancing a mortgage, Paul Kundert, president and CEO of UW Credit Union, said.
“If you’re not making your payments or are not current with your mortgage, it will be very difficult to find a lender who will say ‘we’d like to transfer that debt [over to us],'” Kundert said.
For those who have established credit or collateral, they could potentially qualify for better terms, Kundert said. But like in the case of mortgage financing, some may find difficulty in getting their student loan refinanced if they don’t meet the terms.
Without giving young people the opportunity to get the resources to finance higher education, Scott Ross, executive director at One Wisconsin Now, called Walker’s plan “laughable.”
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“The idea that after Wisconsin went from 10th in the nation in terms of percentage of students who graduate with student debt all the way up to third under Walker’s term, and his answer is a website and ‘go to the bank’ is offensive as it is useless,” Ross said.
Instead, Ross said Walker and the Legislature need to consider some students may not have collateral to offer when they go in to refinance a loan.
Seeing as banks are not suddenly going to give their money away to people without assets, Ross said Walker’s plan will not change the way banks do business. But, he added, a change is needed to provide for those in the state who face student debt.
“Here in the state of Wisconsin, there is $19 billion of student debt [among] one million people and Scott Walker has offered them a website and a placard — and that is offensive,” Ross said.