Today there is a debt crisis in America. In fact, it is the same debt crisis that we faced three 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 stands at nearly $1.3 trillion today. Nearly 40 million Americans have outstanding student loans. In Wisconsin, almost 70 percent of the students graduating from four-year institutions will have student loan debt and the average debt amount will be $28,000.
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 heard from numerous Wisconsin students about the financial struggles they face due to the cost of higher education, including the burden of student loan debt. To help alleviate this burden, I suggest exploring options for refinancing student loans or seeking advice from financial experts such as those available on oddcoll.com site.
One woman 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.
This is the debt crisis that demands action from Washington because it is holding back an entire generation and creating a drag on economic growth for Wisconsin and our country.
To help give Americans a fair shot at getting out from under the burden of student loan debt, I believe we should let borrowers refinance at today’s lower rates. That is why I have cosponsored the Bank on Students Emergency Loan Refinancing Act. This legislation would allow struggling borrowers to refinance their student loans and take advantage of lower interest rates – the same way people refinance a mortgage, a car loan or business debt. It is paid for by making millionaires and billionaires pay their fair share in taxes to give our students a fair shot at a bright future. The U.S. Department of Education estimates that about 25 million borrowers could benefit from refinancing under this legislation, including 515,000 people in Wisconsin.
The Senate took a vote on this legislation, and while it received majority support, Republicans obstructed the bill from moving forward. The choice was clear and opponents of addressing the student debt crisis chose to protect tax loopholes for millionaires and billionaires instead of providing relief to middle class families struggling with student loan debt. Unfortunately, the Republican majority in the Senate continues to ignore this crisis.
Last fall, as the Federal Perkins Loan Program was set to expire on September 30, I worked to build a bipartisan coalition to fight for the extension of this critical investment for Wisconsin’s students. Since 1958, the Federal Perkins Loan Program has been successfully helping Americans access affordable higher education with low-interest loans for students who cannot borrow or afford more expensive private student loans. In Wisconsin, the program provides more than 20,000 low-income students with more than $41 million in aid.
Unfortunately, due to one Senator’s obstruction, the program lapsed. But I didn’t give up my fight and before the New Year, we were able to end the gridlock and ensure that this program’s funding is secured for the next two years. I took on this fight because I believe strongly that every student in America deserves a fair shot at an affordable education.
So let me tell you about how I plan to continue my fight this year to confront student debt and college affordability.
Currently, working students are eligible for less financial aid due to their work income. I don’t believe this is fair and I don’t believe hardworking students should be penalized for trying to keep up with the increasing cost of education. That is why I have introduced legislation called the Working Student Act to allow students who must work while in college to complete their degrees more quickly and with less debt. My legislation increases the amount working students can earn without that income counting against them in accessing need-based federal financial aid, including Pell Grants.
One thing is clear – college education should be a path to the middle class, not a path to indebtedness. There is a lot more we can do in Washington to respect and reward hard work, and give a much-needed break to people struggling to build a stronger future for themselves, their families and for America. I also strongly believe that America needs to out-educate the rest of the world in order to better compete in a 21st century, skills-based economy.
In his State of the Union address last January, President Obama called on Congress to make a bold investment in our nation’s students, its workforce and the future of our economy by making two years of community college free.
I answered the call and announced legislation, the America’s College Promise Act, aimed at providing students a stronger and more affordable opportunity to gain the skills they need to compete, succeed and prosper by making an investment in workforce readiness, our economy and our future.
My legislation creates a new partnership between the federal government and states to help them waive resident tuition in two years of community and technical college programs for eligible students, while promoting key reforms to accelerate student success. By making the America’s College Promise Act a reality, a full-time community college student could save an average of $3,800 in tuition per year. If all states participated under this program, an estimated 9 million students could benefit. My legislation provides a federal match of $3 for every $1 invested by a state to waive community college tuition and fees for eligible students before other financial aid is applied. It ensures that programs offer academic credits that are fully transferable to four-year institutions in their state, or occupational training that leads to credentials in an in-demand industry. Additionally, this legislation establishes a new grant program to provide pathways to success at minority serving institutions, like historically black colleges and universities and Hispanic-serving institutions, by helping them cover a significant portion of tuition and fees for the first two years of attendance for low-income students.
So where do we go from here?
If you believe, like I do, that no middle class family should be priced out of the education they the need and deserve, then I need you to make your voice be 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. Together let’s make a difference and move Wisconsin – and the nation – forward.