In a move Gov. Scott Walker says would give more student loan borrowers the ability to refinance their loans, UW Credit Union will expand its membership eligibility to include any current or former college students who currently live in Wisconsin.
Walker and officials from the credit union and the state Department of Financial Institutions announced the change at a news conference in Madison on Tuesday. DFI Secretary Lon Roberts did not have an estimate of how many people are expected to take advantage of the expansion.
The credit union has offered refinancing and consolidation to its members for about three years, UW Credit Union president and CEO Paul Kundert told reporters. Previously, membership was available to past and current University of Wisconsin System students.
"We’ve already lent $20 million in student loan refinancing," Kundert said. "What’s changed with this announcement is there are more people eligible to access those products."
Interest rates from the credit union range from 2.2 percent to 6.8 percent.
Walker called the membership expansion a "tremendous opportunity," adding that a concern he hears frequently from people throughout the state is how to pay for college.
He touted existing initiatives from his administration, including a four-year UW System tuition freeze, and acknowledged a proposal Democrats have pushed for several years that would create a student loan refinancing authority.
The governor said Tuesday the Democratic proposal would create "another layer of government," arguing instead that borrowers could take advantage of "very competitive rates" already available through UW Credit Union.
Scot Ross, executive director of the liberal group One Wisconsin Now, which has advocated a refinancing authority for years, said the credit union announcement offers "no new ideas, no new solutions and no new opportunities" for student loan borrowers.
Also on Tuesday, Walker announced the launch of "Look Forward Wisconsin," a website featuring resources including links to scholarships, financial planning tools and a list of 13 financial institutions that offer refinancing. That website is part of an effort from a student loan debt specialist appointed last spring.
The terms and eligibility for refinancing will vary from borrower to borrower and institution to institution, Roberts noted.
Kundert acknowledged it would be difficult for a graduate in an unstable financial situation to take advantage of refinancing, but said that's no different than it would be for someone seeking to refinance a mortgage.
"Those that have found employment, are in the workforce and have established credit on their own, they could potentially qualify for better terms," Kundert said.
The state, with its new website, is trying to "facilitate easy access" to the resources that are available to those with student loans, Roberts said.
"We think that in this day and age, where you have a nice, efficient website, you’ll get better visibility for the products and services that the private sector has, and that will create more volume," he said.
According to White House figures, 815,000 Wisconsinites have student loan debt and the average debt for someone with a bachelor's degree is about $28,400. Total student debt carried by Wisconsin residents is a little more than $19 billion.
Wisconsin has the third-highest percentage of graduates with student debt, at 70 percent, according to the Institute for College Access and Success.