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Broad Support for Wisconsin's "Higher Ed, Lower Debt Act"

PHOTO: Legislation is gaining momentum in Wisconsin that would allow student debt to be treated more like mortgage debt, including some tax breaks and the ability to refinance. Photo credit: iStockphoto.com
PHOTO: Legislation is gaining momentum in Wisconsin that would allow student debt to be treated more like mortgage debt, including some tax breaks and the ability to refinance. Photo credit: iStockphoto.com
December 5, 2013

MADISON, Wis. - Support is growing for a Wisconsin plan to address the harsh burdens of huge student loan debt. Scot Ross, executive director of One Wisconsin Now, said many people are not aware of the magnitude of the problem.

"We've seen student loan debt grow from $200 billion in the year 2000 to over $1.3 trillion this year," he explained. "In fact, student loan debt is the second-largest consumer debt in the nation right now; it surpasses everything except mortgage debt. It is the only consumer debt to increase since the Great Recession."

The Higher Ed, Lower Debt Act (SB 376 and AB 498) presents what Ross called common-sense, state-based solutions to those struggling with the burden of paying back their student loans. The first step would create a way to help borrowers refinance these loans, he said, "because you can't do that right now - you know, you can go down if you have a mortgage and refinance your mortgage. You are specifically prohibited from doing that with student loans. What the Higher Ed, Lower Debt bill would do is create a refinancing authority at the state level to allow borrowers in Wisconsin to take that option, if they chose to."

The legislation would also allow borrowers to deduct their student loan payments on their state income taxes, just as can be done with mortgage interest. And it would track information about student loan debt in the state, so policymakers could better understand its effect.

According to Ross, the burden of student loan debt has a real impact on Wisconsin's economy and future.

"Here in Wisconsin, we may have the next inventor of Google or the next inventor of the iPod, but they're not going to be able to do that because they've got to take whatever job they can get in order to make sure they pay their student loan debt - because if you default on your student loan, your personal economy is ruined, he said.

Borrowers have done nothing wrong by financing their higher education through loans, but he said elected officials could be doing more to make sure the system treats them fairly.

Tim Morrissey, Public News Service - WI