The cost of higher education is a major headache for people, even years after graduation. A program in Washington State aims to make borrowing for college a little easier.
State lawmakers passed a measure this year that will establish a 1% interest rate student loan program. It will start with a one-time investment of $150 million from the state, after an actuary has analyzed the plan.
The bill’s sponsor, State Rep. Pat Sullivan — D-Covington — said the state had a big budget surplus this year.
“We had a decent amount of one-time money,” Sullivan said, “and I really thought putting it in a student loan account for 1% student loans made perfect sense. Timing was everything. simply perfect.”
The state had a $15 billion surplus to work with in the 2022 session.
Most Republicans voted against the legislation, saying the money should have gone back to Washingtonians through tax breaks.
Washingtonians owe an average of about $33,000 in student debt, according to the Student Loan Hero website. Sullivans said debt burdens people long after they leave college.
“Interest rates are too high,” Sullivan said. “You have graduates unable to take out a loan even for a car in some cases, and buying a home is out of reach given how much debt they are graduating with.”
The Biden administration is considering forgiving some of people’s student debt — possibly up to $10,000.
Sullivan – who is also the majority leader at the State House – said it was great, but his 1% loan scheme is about helping students get ahead.
“It will help a lot of students, but that’s in the future,” Sullivan said, “and so until the federal government can come up with a better solution for students, they’ll continue to go into debt.”
A report on how the program might work in the long term and what level of funding it might need is due on the governor’s desk on Dec. 1.
Support for this report was provided by Lumina Foundation.
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