GREEN BAY, Wis. (WFRV)-- Wisconsin could soon become the first state to allow college graduates to refinance student loans at lower interest rates.
Sen. Dave Hansen, D-Green Bay, is pushing a bill that would do just that.
60-percent of college students in the U.S., last year, took out a loan to cover tuition costs, according to the Chronicle of Higher Education, and for many paying back those loans will be a challenge.
“It builds up," said Tressa Zuleger, a UW-Green Bay student.
Zuleger is a UWGB Senior. She’s hoping to go onto graduate school but knows that means more debt.
“It’s going to keep adding up and adding up so eventually it’s like you’re never going to get out of it," said Zuleger.
But the "Higher Ed, Lower Debt" bill could change that.
“When you buy a home, you can refinance. When you buy a car, you can refinance, but the opportunity here is to be able to do the same. We’d like to have those loans refinanced and put that money in the economy, said Sen. Hansen.
That’s something some college students said would help them pay off their debt down the road.
"Generally when you’re out of college, you don’t make a bunch of money right away. I know most people are paying off their student loans for 10,20,30 years and I don’t see myself making a lot of money," said Audrey Prichard, a UWGB Senior.”
According to recent data 753,000 Wisconsin Residents have an average student loan debt of about $27,000. Total, that’s more than $20 billion in student loans.
But is refinancing the best option for students?
Executive V.P. of Nicolet National Bank, Eric Witczak, said it's complex.
“If they refinance, typically, there’s no collateral and it becomes unsecured and regardless of age, if you have a high unsecured limit, it’s on your credit report, it’s going to look negative," he said.
Because the state government would fund the loans, Eric worries if interest rates go down and more students default on their loans, tax payers could pick up the bill, but Sen. Hansen said that’s unlikely.