As both graduation day and Election Day rapidly approach, Democrats and Republicans alike have turned their attention to a national trend toward increasing student loan debt.
Among them is U.S. Rep. Mark Pocan, D-Wis., who visited the University of Wisconsin-Madison Friday to talk about his bill to allow students to refinance their student loans at a lower interest rate.
“We are at 1.2 trillion dollars of student loans, number two only to mortgages,” Pocan said. “Just a decade ago, it was less than a quarter of that.”
Pocan said increasing student debt is dangerous in the current economy.
“If you are paying off those loans, you are probably going to have a used car and not buy a new car,” Pocan continued. “And that takes money directly out of the economy that otherwise would be helping to create jobs and stimulate the economy even more.”
Matt O’Keefe, a UW-Madison junior studying political science and criminal justice, is one of those individuals.
“I actually considered not going to Madison because of the amount of debt I would have,” O’Keefe said. He anticipates he will have more than $50,000 in student loan debt at graduation.
O’Keefe is not alone. At UW-Madison the average loan debt for an undergraduate student graduating in 2013 was $26,625, up from $25,759 the previous year, according to financial information published annually by the Office of the Provost.
But a report from the Institute for College Access and Success suggests UW-Madison’s debt statistics are much less severe than national trends cited by politicians and the media.
In 2012, the national average debt for graduating college seniors was more than $3,000 higher than UW-Madison’s average, according to the report. Nationally, the report showed 71 percent of college graduates graduated with loan debt in 2012. At UW-Madison, that number was 51 percent.
UW-Madison Financial Aid Director Susan Fischer said much of the national hype surrounding student loan debt is inflated by statistics from private colleges, which she said accounts for a disproportionate share of the loan debt.
Gov. Scott Walker stressed the importance of college affordability when he announced in April he would include a two-year extension of the current tuition freeze for the UW System in his next budget.
Since Walker’s first tuition freeze took effect in 2013, average undergraduate loan debt at UW-Madison has continued to increase at the same rate as it has over the last 10 years, according to the university’s annual financial report.
Despite national trends, Fischer predicted UW-Madison’s debt numbers would begin to shift back to normal in the coming years as the national economy recovers.
“During the Great Recession, people went back to school,” Fischer said. “More people were in the pool, and more people had to borrow because there were more total students here.”
No matter what financial situation students face, Fischer said she hopes students alleviate what debt they can with non-loan financing options.
“Live within your means,” Fischer said. “Every dollar you do not have to borrow now means you are going to be better off later.”
She added she would like to see students applying for scholarships and grants for every year of school.
For now, O’Keefe and many of his peers around the country look to Washington, D.C., for a solution to the student debt epidemic.
Eoin Cottrell contributed to this report.
