Seek ways to address student loan debt burden: Our View
Written By: Editorial Board
Saul Newton was the first member of his family to go to college. The Milwaukee native chose to come to the University of Wisconsin-Stevens Point to study communications. It was, he said in an interview this week with the Stevens Point Journal Media Editorial Board, a relatively inexpensive university where he knew he would get a first-rate education.
The numbers did not work out that way for Newton, though. After a series of tuition increases he was forced to drop out of school. He enlisted in the Army and served two tours of duty in Afghanistan, motivated to a large degree by the GI Bill's promise of finances for his education.
Newton told his story as part of a town hall meeting hosted by Rep. Katrina Shankland and the One Wisconsin Institute highlighting the issue of historically high student loan debt levels, the drag they place on the economy and the burden they place on individual consumers.
Tuition did not skyrocket in a vacuum. Declining state aid is a big part of the story. And the marketplace for higher education, largely funded through a very profitable federal loans industry, has not had many incentives for universities to cut costs or limit tuition growth.
But Shankland and One Wisconsin Now highlighted other, more consumer-focused issues. Student loan borrowers, unlike mortgage-holders or almost anyone else with a loan, are not allowed to refinance. Their student loan debt cannot be reduced in the event they are forced to declare bankruptcy. In a particularly shocking example cited by One Wisconsin Now director Scot Ross, last year 120,000 retirees had their Social Security payments garnished to pay for student loans. (Some had taken out loans to help pay for children or grandchildren’s education; others had gone back to school themselves later in life.)
There must be a better way. We all are responsible for paying back loans we take out. But ensuring that students like Newton have access to higher education is an important societal value — not to mention an economic one.
We appreciate the work Shankland and other local legislators have done to promote the “Higher Ed, Lower Debt” bill, which would offer some remedies, for example by allowing market-based refinancing of student loans. That bill died on a party-line vote, but it’s clear that the politics of this issue are changing as more people recognize the true burden that student loan debt can be, and we hope to see more support — even bipartisan support — for the proposal in the future.
Make no mistake: For most people, over the course of their lives, going to college remains a phenomenally good value. But increasingly, if it requires going into a hole tens of thousands of dollars deep to do it, more people will not have access to a college education. That would be a historic tragedy and an economic calamity, and that is why student loan debt matters to much more than just those who carry loans themselves.