The cost of college has risen more than 250 percent over the last three decades, making it impossible for the vast majority of students to graduate without debt. As a result, college debt has skyrocketed nationally with Americans now holding more than $1.3 trillion in outstanding online payday loans and college loans.
With that in mind, Sen. Melissa Sargent and Sen. Chris Larson announced a plan to bring Debt Free College to Wisconsin at a press conference at the Assembly Parlor of the State Capitol yesterday. “We call it the Wisconsin Promise. Let me be clear and frank up front: This is not a hand out; it’s a hand up for our students who work hard and play by the rules,” Sargent said at the press conference.
“Student loan debt is an economic and moral crisis. It’s too much. As the mother of two sons who are currently in high school and two more that will be there far too soon, I fear for the difficult choices that they are having to make,” Sargent added. “It is completely counterproductive to our country’s best interests and the state of Wisconsin’s best interests to continue forward with a system that is tying the hands of our future generations.”
Ultimately, the bill provides a path for in-state students to be able to graduate college without being strangled by student loan debt.
“Currently in Wisconsin, 70 percent of the students are having to borrow money to pay for college and their net average debt is about $29,000 a year. Wisconsin is simply better than that,” Sargent told Madison365 after the event.
Sargent sees the Debt Free College plan as an investment in Wisconsin. “We’re hoping to make a positive influence on the brain drain that is facing our state,” Sargent said.
The bill requires that students would have to maintain a 3.0 grade point average and would have to work for three years in Wisconsin after graduating. If students leave the state prior to that or don’t graduate, the grant funds would roll into a regular student loan account.
Sargent said that they were still waiting for the fiscal estimates on the more specific numbers. “Ultimately the grant would convert to a loan with an interest rate if the young people decided that they weren’t going to stay in Wisconsin for the three years or is their GPA dropped below 3.0,” she said. “But it’s not a handout. And it’s not just tuition. We’re talking about everything associated with the cost of school including fees, housing, text books … thinking about all of that together is important.”
The total volume of outstanding U.S. student loan debt has more than doubled to $1.3 trillion, according to the U.S. Consumer Financial Protection Bureau, compared with less than $600 billion in 2006. Sargent remembers when days used to be much different in America.
“Personally, I was able to graduate with about $3,000 in debt. I worked full time and I went to school full time. My books and my tuition and my housing and my fees … I was able to cover,” Sargent remembered. “I think that’s a promise we should be able to make to our young people. Instead, we’re making a promise to corporations. The money is going in the wrong direction. It’s not a matter that our state can’t afford to do this … it’s just a matter of changing our priorities. I certainly feel like investing in our people – people who are willing to go to school and to study hard and follow all the rules.”
The U.S. Consumer Financial Protection Bureau also reported that over 8 million private and federal loan borrowers are in default, representing more than $110 billion. Millions more are finding it hard to keep up with repayments.
“We can’t afford to keep waiting to address this. What has been proposed up to this point in the building is really not going to help the vast majority of people in the state of Wisconsin,” Sargent said. “We have a crisis going on right now with our young people. They deserve to live the American Dream and have the freedom to be able to move forward.”