Rep. Mason's student debt bill gets a hearing

2014-02-10T18:37:00Z 2014-02-27T22:02:19Z Rep. Mason's student debt bill gets a hearingMARK SCHAAF Journal Times

RACINE — State Rep. Cory Mason’s bill aiming to ease student-loan struggles got a hearing Monday in the state Assembly, though it faces an uncertain future.

Mason’s proposal, called the “Higher Ed, Lower Debt” bill, takes a crack at the mountain of student debt many people face by allowing them to refinance their student loans, just as they can any other loan. They would do that through a new creation: the Wisconsin Student Loan Refinancing Authority.

The bill also extends a tax break for residents shouldering student loan debt. People in college are eligible for a deduction up to $6,943 for their tuition; Mason’s proposal would allow that deduction to continue years after college to help with student loan debt.

Legislators heard hours of compelling testimony today and last week in a state Senate hearing from people with a large amount of debt who want to pay back their loans at lower rates, said Mason, D-Racine.

He was encouraged that Republicans, who control both chambers of the Legislature, allowed hearings. But the real test will be whether they schedule a vote, Mason said.

That hasn’t yet been determined. Speaker Robin Vos’ office is reviewing testimony from the hearings, Vos’ spokeswoman Kit Beyer said. It’s not certain whether the Committee on Universities and Colleges, which held the hearings, will vote on the bill.

Mason, who co-authored the bill with state Sen. Dave Hansen, D-Green Bay, said he tried to write the bill in a way that would appeal to Republicans, noting its free-market approach and tax deductions. In private conversations, several Republicans have spoken highly of it, Mason said.

He added that he’s open to tweaks. Concerns arose in the hearings over using the Student Loan Refinancing Authority for financing and whether it could effectively implement the law.

The Student Loan Refinancing Authority would be modeled after the Wisconsin Housing and Economic Development Authority, which uses the state’s bonding authority to provide loans for housing and business projects.

Mason said he’s “excited to have conversations on how to fix the bill” because student loans are a dire concern for many families. His bill could save residents as much as $531 each year, according to the nonpartisan Legislative Fiscal Bureau.

“If letting them refinance can reduce their monthly payments by 10 percent, 20 percent, and deducting some of it can reduce that cost 10 percent, 20 percent, than you’ve made it more manageable for people,” he told The Journal Times’ Editorial Board last month. “You’ve put people in a place where maybe they can afford to buy that new home instead of continuing to rent, or buy a new car instead of a used car.”

The bill tackles a huge problem, with student loans now the second-largest debt behind mortgages, Mason said. The average student loan debt in Wisconsin is about $27,000, he said, and it can haunt people for decades. Even with a monthly $400 payment, it takes an average of 19 years to pay off that debt after principle and interest, Mason said.

Mason fears that at some point the cost of the degree will outweigh its benefits. While the bill doesn’t solve every problem in higher education, it gets at a big one.

“It’s a big issue that confronts people,” he said, “not just for a few years after they graduate college, but for a long time.”

About the bill

$531: maximum savings for student loan holders under “Higher Ed, Lower Debt” bill

$6,943: maximum tax deduction for student-debt holders under bill

Source: Legislative Fiscal Bureau

Copyright 2016 Journal Times. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(11) Comments

  1. Zoo Mom
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    Zoo Mom - February 11, 2014 6:50 pm
    Keep up the good work Cory.
  2. Middle class citizen
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    Middle class citizen - February 11, 2014 3:07 pm
    We are a very middle class family and our insurance rates doubled, food is increasing all the time, we have 4 kids, and student loan debt. It is an ever increasing problem for our family. We are at the point where we feel we would have benefited More from not gaining degrees than having them. It's a financial burden with zero relief in site. Meanwhile immigrants are getting free aid for food, healthcare, and student loans. Our country is in a sad sad place. It's disappointing. I applaud this bill and hopes it won't fizzle out but help real American people who are trying to maintain middle class not end up in poverty
  3. ordmm
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    ordmm - February 11, 2014 12:02 pm
    “If letting them refinance can reduce their monthly payments by 10 percent, 20 percent, and deducting some of it can reduce that cost 10 percent, 20 percent, than you’ve made it more manageable for people,” So the taxpayer is going to fund this deal, correct? Along with an a tax break for eternity the taxpayer funds this, correct? Mason just gets all fired up when he hears there's extra money about to be returned to the people. Man, it never ends.
  4. Gearhead
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    Gearhead - February 11, 2014 11:48 am
    Anytime a bill comes out of left field with 100% Democrat support, we know it can't be based in economic reality. More grandstanding from Mason, really. It is already falling apart.
  5. Joe Taxpayer
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    Joe Taxpayer - February 11, 2014 9:02 am
    I agree this was caused by poor decisions made in the past. And while I'd never vote for Cory Mason, I do want to give credit where credit is due.
  6. Kate Remington
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    Kate Remington - February 11, 2014 6:36 am
    meanwhile it appears the University of Wisconsin is going to raise tuition costs. Debt in the thousands for a young person starting out undermines choices because there is this debt obligation bubble. It throws the graduate into a country shaped by greedy self aggrandizment system teetering on collapse because of the shrinking opportunities for the shrinking middle class and the low income poor. Cory Mason is a soldier on behalf of education and for that I applaud him but our country is facing this incredible grip of the dollar which makes the two party answers inadequate. It is the system itself which is failing all of us because we are losing freedoms. The Greek people state this situation the clearest.....America is just waking up.
  7. A Jelly Doughnut
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    A Jelly Doughnut - February 10, 2014 11:16 pm
    They're magically delicious!
  8. Zigmond
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    Zigmond - February 10, 2014 9:49 pm
    Trouble shooting a problem must start with a full understanding of the root cause of the problem, not just a quick Gov't fix. Mason is not a trouble shooter. Can't wait to vote him out.
  9. Zigmond
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    Zigmond - February 10, 2014 9:41 pm
    Think deeper you guys, ask Mason why tuition has doubled inflation . HINT - like Reagan said, Govt is not the solution, it is the problem.

    [snip] "the main reason tuition continues to rise is a dramatic change that took place regarding the Federal Stafford Loan more than a decade ago. When Uncle Sam opened the floodgates to government-backed student loans without parent income restrictions in 1992, colleges welcomed the news with open arms. The sudden injection of millions of additional aid dollars only furthered tuition increases. Add to that the government’s continued promotion of the Stafford Loan as a low-cost program, and you have the formula for hyperinflationary costs."
  10. JT fact checker
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    JT fact checker - February 10, 2014 8:33 pm
    I am proud of Cory. He finally has come up with an idea that will help everyone. Not just people who do not pay taxes. Bravo.
  11. Joe Taxpayer
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    Joe Taxpayer - February 10, 2014 8:04 pm
    I can't believe I'm typing this, but Cory Mason has a good idea and is wisely leveraging his influence. I know it's nuts... But while I will not personally benefit from this, I think it's a win/win for everyone involved. More stuff like this, Cory!
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