Subject: [big campaign] NEW Research Shows Trillion Dollar Student Loan Debt a Drag on Wisconsin Economy
From: Aniello Alioto <[email-masked]>
To: [email-masked]
Date: Thu, 27 Sep 2012 12:12:23 -0400
List-Id: <bigcampaign.googlegroups.com>

This has been in the works for a long time and the many hours of legwork
are now coming to fruition. There's some great data in here - please use
widely and at will!

---------- Forwarded message ----------
From: Scot Ross, One WI Now <[email-masked]>
Date: Thu, Sep 27, 2012 at 12:00 PM
Subject: New Research Shows Trillion Dollar Student Loan Debt a Drag on
Wisconsin Economy
To: [email-masked]

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*For Immediate Release
September 27, 2012*
*Contact: Mike Browne
Phone: (608) 444-3483*

 New Research Shows Trillion Dollar Student Loan Debt a Drag on Wisconsin
Economy *Institute for One Wisconsin Research Reveals Hundreds of Millions
in Potential In-State Economic Activity Diverted to Student Loan Debt
Repayment
*

Madison -- As student loan debt tops one trillion dollars nationally,
surpassing credit card debt, federal officials are pointing to the debt
crisis as a drag on economic recovery efforts. Original research from the
Institute for One Wisconsin released today confirms the detrimental
economic impact of student loan debt, finding it reduces new car purchasing
in Wisconsin by over $200 million annually and that middle class households
with student loan debt are overwhelmingly more likely to rent than own a
home.

Scot Ross, Executive Director of the Institute for One Wisconsin,
commented, “The trillion dollar student loan debt is not just a crisis for
students. It is literally standing between college graduates and their
share of the American dream and a more robust economic recovery both
nationally and, as shown by our research, in Wisconsin.”

According to the Institute for One Wisconsin’s analysis of a detailed
financial survey of nearly 2,700 Wisconsin residents across income and age
levels, over one-third of persons with bachelors or advanced degrees were
making student loan payments.

The Institute’s research further revealed:

   - Individuals with bachelors degrees reported making an average monthly
   student loan payments of $350 and those with graduate or professional
   degrees made an average payment of $448;
   - The length of student loan debt was nearly 19 years for persons with
   bachelors degrees and over 22 years for those with graduate or professional
   degrees;
   - An increasing reliance on private student loans versus government
   loans and an increasing number of individuals consolidating their loans,
   therefore extending the repayment period and total amount paid, post-1996
   Student Loan Marketing Association Reorganization Act;
   - Individuals paying on a student loan are more than twice as likely to
   purchase a used versus new automobile;
   - Annual aggregate new vehicle spending may be reduced in Wisconsin by
   up to $201.8 million;
   - A strong correlation between student loan debt and renting with 85.6%
   of renters with household incomes between $50,000 and $75,000 currently
   paying on a student loan.

Increasingly students and their families have been unable to absorb the
cost of college in their budgets as the average tuition has increased 600%
since 1980, far outpacing income and wage growth, creating an increased
reliance on student loans.

As more students were forced to take out loans, federal laws were changed
to remove bankruptcy protections, refinancing rights, statutes of
limitations, truth in lending requirements, fair debt collection practice
requirements and even state usury laws while unprecedented powers of
collection were granted to the lending industry. In addition, federal
legislation was passed to encourage student loan debt consolidations,
increasing the length of indebtedness and increasing the total amount paid
to retire the loan.

“Laws were changed to tilt the system against borrowers, and rising tuition
continues to force more and more people into the vicious cycle of student
loan debt. College used to be the path to the middle class and a prosperous
future. But our research shows we are in danger of reducing middle class
college graduates to indentured servitude to lenders, renting instead of
owning a home and deferring new vehicle purchases, all to the detriment of
Wisconsin’s economy,” said Ross.

Ross noted that some steps have been taken to undo the damage of law
changes adopted in the mid and late 1990s, including making the government
the originator of federal loans, capping loan payments at a fixed
percentage of household income and limiting the term of loans.

He concluded, “Millions of dollars are being taken from Wisconsin residents
and businesses because of student loan debt. If we want a stronger economy
today and a brighter future for our children, we can no longer afford to
ignore this crisis and the policies that helped create it.”

The Institute’s complete findings on student loan debt are available at:

http://www.onewisconsinnow.org/files/IOW%20Student%20Loan%20Research.pdf.

# # #

The Institute for One Wisconsin is a non-partisan, progressive research and
education organization dedicated to a Wisconsin with equal economic
opportunity for all.

Media Inquiries: (608) 204-0677 | Email:
[email-masked]

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