To be generous, it may just be a lack of knowledge or personal experience that led Dave Cieslewicz to dismiss student loan debt as no big deal (Citizen Dave, 5/30/2019). It certainly isn’t the facts, as the 45 million people in the United States today saddled with over $1.5 trillion in student loan debt can attest.
The higher education landscape is very different today than during Cieslewicz’s college years nearly 40 years ago when one could attend his alma mater, the University of Wisconsin-Madison, for an annual tuition of about $900.
Back then, public support for higher education helped keep tuition low. Financial aid for eligible students covered a significant portion of the cost of education. There was not a student loan servicing business among Fortune 500 companies, and the federal government was not generating more off the interest on student loans than the profits of Exxon Mobil.
That is no longer the world in which we, and Cieslewicz, live.
Today student loan debt is the second leading form of consumer debt in the country, exceeding credit card and auto loan debt. It is increasing at a frightening rate, up 50 percent in less than a decade.
Borrowers worked hard to get their education and they took on the personal responsibility to pay for it, but they are trapped in a system that treats them unfairly.
For example, the vast majority of borrowers whose loans originated with the federal government cannot refinance their loan with the federal government. This despite a period of historically low interest rates and reams of research showing the negative impact student loan debt has on new business creation, rates of home ownership, new car purchases, retirement savings and education savings.
Lest Cieslewicsz try to write off this crisis as a problem just for those darned kids who don’t know the value of a dollar, the demographic in which debt is growing the fastest is people like him, borrowers over the age of 60. According to a study from the Consumer Financial Protection Bureau, in Wisconsin the number of borrowers over age 60 rose by an astounding 48 percent and their debt increased by 45 percent between 2012 and 2017.
We’re not in a $1.5 trillion mess because of reckless kids. The policy decisions of the politicians of Cieslewicz’s era launched us down this path by cutting public support for public education therefore fueling skyrocketing tuition; underfunding financial aid for eligible students; and profiteering off the interest on student loans.
In Wisconsin, less general purpose revenue is allocated for the University of Wisconsin System today than a decade ago. Financial aid is so woefully underfunded that the nonpartisan Legislative Fiscal Bureau reports over 29,000 University of Wisconsin and technical college system students who were eligible for financial aid received none. Nearly 7,000 students at private colleges were also denied the help for which they were eligible.
Cieslewicz grew up in…