The Biden Administration recently announced a plan to forgive student loan debt for millions of borrowers. Student debt in Wisconsin totals $24 billion, according to a 2017 report from the Consumer Financial Protection Bureau.
This announcement is a big deal for many Wisconsinites, but others are looking for more relief. As higher education becomes more and more expensive and societal pressure pushes students into feeling they need a higher education degree, many young students take on extensive loans. Silbi Isein, a financial aid advisor at UW-Milwaukee, says there has been an influx of students contacting the financial office asking what this announcement means for them.
"[Students] have the ability to get more than just 10 grand off because students who, as it currently states, students who are not Pell eligible may only be forgiven up to $10,000, while students who are Pell eligible could possibly get an additional 10 [thousand dollars forgiven]. So we're looking at about 20 [thousand] total, right?" says Isein.
She continues, "But there is a separate conversation happening as well. So in the UW-system, there's something happening, at least with UW-Milwaukee called the Wisconsin Tuition Promise, where we are having a push back of students who are looking to enroll in fall 2023."
READ How Milwaukee borrowers will be affected by Biden's student loan forgiveness
Karen Bauer, attorney for a consumer protection unit at the Legal Aid Society of Milwaukee, highlights that concerning this announcement: "Wisconsin usually harmonizes our state tax laws with those of the Internal Revenue Code code, the federal law, but they already did that for ARPA, the American Rescue Plan Act. They did that a few months ago before this was announced. What we are hearing right now is that it is not looking like the legislature in Wisconsin is going to reharmonize the provisions of this with the federal tax code, which will mean that people in Wisconsin will get taxed on their $10,000-20,000 forgiven."
Bauer continues: "So in order for regular Wisconsin citizens to not be taxed, our Wisconsin legislature needs to act to harmonize Wisconsin State law with the federal tax code."
The loan forgiveness announcement will help students, but it will be very little relief for some. In the overall picture of the rising costs, this is a temporary fix. Both Bauer and Isein say more will need to be done by politicians to address and support families with higher education costs. Bauer encourages students to contact her and visit studentaid.gov to learn more.
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