Wisconsin students face confusion over federal student loan changes and repayment options
WLUK) — Tens of thousands of Wisconsin students at both public and private institutions receive at least some sort of financial aid.
With information regarding federal student loans in flux, it can be a confusing time for those who have borrowed from the federal government, or those are planning to.
“For those folks that are in the SAVE program, there’s a lot of confusion there of which income driven repayment do I select after the SAVE program?” said Preston Cherry, a financial adviser and professor at UW-Green Bay.
From the SAVE Plan, an income-driven repayment plan designed to lower monthly payments, currently blocked in federal court — to a bill that looks to overhaul the federal government’s student loan system altogether — it might be a little more difficult to plan as a student.
FOX 11 previously told you about details on the House Committee on Education and Workforce’s “Student Success and Taxpayer Savings Plan.”
“We’re not going to be giving out as much as loans in the first place, so then if somebody doesn’t repay their loans, obviously the cost to the taxpayer won’t be as great,” said Rep. Glenn Grothman, R-Glenbeulah.
If passed, the bill would make changes to programs like pell grants, borrowing caps and would even require colleges to pay a portion of unpaid loans in default, based on how much of a return-on-investment the degree provided.
“That, to me, is problematic,” said Universities of Wisconsin President Jay Rothman. “Universities, if they respond to it, are going to say, ‘We’re going to take less risk on students. We’re not going to have the same level of accessibility because we’re going to end up having to finance that penalty when some students default.'”
While there’s always the option to explore securing private loans for school, higher education systems are still concerned for those with lower socio-economic means.
“The whole idea of federal financial aid is to level the playing field so students from lower socio-economic backgrounds are able to go out and get a degree and to prepare for a career,” said Eric Fulcomer, president of the Wisconsin Association of Independent Colleges & Universities (WAICU).
With uncertainty surrounding federal loans, Cherry says students need to evaluate their future, especially as the federal government has resumed collections on student loans in default.
“Figuring out how much that repayment will be in the future, so when you do have to repay, it can be within a budget. Also, too, there’s many ways in order to access college. Community college is one way, paying as you go, so having a job while you’re working in college,” said Cherry.
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