Fast Facts: The student debt debate and a looming decision
While tuition at UW System campuses has been frozen for years, public and private college tuition elsewhere has risen dramatically over the last two decades — with student loan debt ballooning, President Joe Biden is weighing whether and how much to forgive.
June 23, 2022
Summer is here and that means another crop of college students have graduated and are hitting the job market.
Along with their diploma, many college graduates and former students also receive another document tied to their financial futures: a student loan bill. And in many cases, the amount owed is substantial.
More than 43 million Americans owe about $1.75 trillion in student loans. On average, these borrowers owe almost $30,000 each.
Here in Wisconsin, more than 700,000 residents owe nearly $25 billion in student loans. Individually, that's an average debt of more than $17,000 each.
One major part of the student loan debt debate is the cost of tuition. While there has been a freeze on in-state tuition freeze at UW universities since 2013, tuition has gone up considerably at other colleges across the nation.
At private universities, tuition has jumped almost 150% over the last 20 years. Over that time, public universities have raised tuition by more than 200%.
For years, borrowers have said their monthly loan payments aren’t manageable. And due to high interest rates some end up owing more than they borrowed.
But, relief may be on the way.
Among his other campaign promises, President Joe Biden acknowledged what's been called the "student loan debt crisis" and has pledged to address it.
Student borrowers and their advocates have long said that student loan forgiveness – where some or all of a borrower's debt is erased — is necessary. And because the majority of student loans are granted through the federal government, reformers say President Biden has the power — and should — forgive these debts.
While the exact details of the Biden administration's plan have not yet been released, reports over recent months have pegged the amount Biden is looking to forgive at $10,000.
Opponents to forgiveness plans, however, say that borrowers knew they were taking on this debt and should remain responsible for it, just as they would be for other financing, like car and home loans.
During the pandemic, the federal government has paused student loan collections, including interest. Those payments are set to resume at the end of August, just around the time the Biden administration is expected to issue its decision on student loan forgiveness.