Wisconsin State Rep. Cory Mason (D-Racine) has proposed a bill to help borrowers struggling with student loans. The measure faces an uncertain future, but it received a hearing on Feb. 10 in the state Assembly after going before the state Senate last week.
The “Higher Ed, Lower Debt” bill would allow borrowers to refinance their student loans through a new Wisconsin Student Loan Refinancing Authority. It also would extend a tax break to state residents carrying student loan debt. College students currently are eligible for a deduction up to $6,943 for their tuition, but the new proposal would allow that tax break to continue years after college.
Mason co-authored the bill with state Sen. Dave Hansen (D-Green Bay), but said that he is open to changes. There were concerns in the hearings over using the Student Loan Refinancing Authority, which would be modeled after the Wisconsin Housing and Economic Development Authority.
Mason said his bill could save borrowers as much as $531 each year, according to the nonpartisan Legislative Fiscal Bureau. Student loans are now the second-largest debt behind mortgages, averaging about $27,000 in Wisconsin. With a monthly $400 payment, it takes an average of 19 years to pay off that debt after principal and interest.