MILWAUKEE – The White House announced a plan on Wednesday which would cancel student loan debt of up to $10,000 for people making less than $125,000 per year. That amount would double to $20,000 for students who received their student loans through Pell Grants.
Dr. Nick Hillman is a professor in the education department at UW Madison. He tells WTMJ there are roughly 720,000 Wisconsinites who carry some form of federal student loan debt.
“Of them, about thirty percent have ten-thousand dollars outstanding – or less,” Hillman said.
That means more than 200,000 people in Wisconsin could have their federal student loan debt entirely erased.
Hillman believes that the majority of money saved by this will go towards basic necessities.
“It’s going to free up monthly budgets to pay for other things,” Hillman said.
“Now, those other things, I’m not quite sure what impact that would have on the economy. Those other things would likely be food and housing. That would be my guess.”
But despite helping hundreds of thousands of Wisconsinites climb out of student loan debt, Hillman says the major underlying problems to the student loan system are still in place.
“Streamlining the process so that borrowers can pay directly to the federal government when they have to repay a loan, that could be one huge solution that, I think, could solve a lot of problems.”
You can listen to Professor Hillman’s other proposed solutions for fixing the student loan system in the player at the top of the page.
