The cost of higher education is a major headache for people, even years after they’ve graduated. 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 get started with a one time $150 million investment from the state, after an actuary analyzes the plan.
The bill’s sponsor, state Rep. Pat Sullivan – D-Covington – said the state had big budget surplus this year.
“We had a decent amount of one time money that was available,” said Sullivan, “and I really thought that putting it into a student loan account for 1% student loans just made a lot of sense. The timing was just perfect.”
The state had a $15 billion surplus to work with during 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 website Student Loan Hero. Sullivans said that debt is a burden for people long after they leave college.
“Interest rates are too high,” said Sullivan. “You’re having people graduate unable to take out a loan even for a car in some instances, and buying a home is way out of reach given the debt load that they graduate with.”
The Biden administration is considering canceling some amount of people’s student debt – possibly up to $10,000.
Sullivan – who is also the Majority Leader in the state House – said that’s great, but his 1% loan program aims to help students going forward.
“That’ll help a lot of students but this is into the future,” said Sullivan, “and so until the federal government can come up with a better solution for students, then they’re going to continue to rack up debt.”
A report on how the program could work long-term, and what funding level it might need, is due on the governor’s desk December 1.
Support for this reporting was provided by Lumina Foundation.