Task Force On Student Loan Debt To Continue Despite Funding Being Removed From Budget

The office of State Treasurer is planning to move forward with a student loan task force to address the ballooning $24 billion debt, despite funding for that proposal being removed from the budget.

In Gov. Tony Evers’ budget proposal, $50,000 would have gone toward funding the Student Loan Refinancing Study Committee to research and report ways to ease the burden of student loan debt. The committee supported establishing a bonding authority to refinance loans, according to the Legislative Fiscal Bureau.

That financial provision was taken out by the Joint Finance Committee, but Wisconsin State Treasurer Sarah Godlewski and a small task force will continue to tour the state and hold listening sessions to identify problems associated with student loan debt.

The $50,000 would have paid for research, outreach, information gathering and the analysis of the data.

“I recently had a great conversation with the governor’s office, and we’re going to move forward with that because we, as executives, have task force authority,” she said.

Godlewski took office six months ago.

Godlewski said one of the first priorities of the task force is to travel across the state to identify what the problems are related to student loan debt. A website is in the process of being set up that will list the public meeting schedule. One meeting has already been held.

“My mom always jokes, ‘Sarah, you have two ears and one mouth for a reason — you should do more listening as a politician,’ and I 100 percent agree with her on that,” Godlewski said.

After the statewide listening sessions, Godlewski said potential solutions will be drawn up.

One of the issues she sees now is related to consumer protection.

For example, Godlewski referred to one instance where a woman was told by a private lender that her interest rates on loans could be reduced by 1 percent. But she was unaware that making that change meant she would lose her federal benefits.

The refinance didn’t save her money, and strapped her into a floating rate, meaning the interest she would pay is subject to fluctuation.

“These are things that we want to make sure Wisconsinites are protected against with regards to making sure private lenders disclose information and provide transparency about their rates,” she said.

She spies another problem with the socioeconomic groups that benefit from refinancing — most notably students from families who are well-off. Students who don’t fall into this category may not have assets or collateral to bargain with and are therefore subject to higher interest rates.

“Not to dork out, but (interest rates are) anywhere between 1.5 to 3.5 percent, and yet we’re charging students 15 percent on interest,” she said. “This is insane, and I think it’s unjust and something we have to address.”