Student loan debt has reached every corner of America, including the state of Wisconsin where 64% of students who graduated from college in 2018 left school with debt. In January of 2020, Governor Tony Evers created a task force to tackle the student loan debt nightmare keeping so many Wisconsin residents up at night.
His executive order cited statistics that shed light on the state of debt in Wisconsin:
- The average amount of student loan debt held by former students increased by nearly 85 percent between 2006 and 2018.
- One in five students nationwide is behind on their loan payments.
- 36% of college students in the U.S say they have more than $1,000 in credit card debt.
- In 2019, credit delinquency hit an eight-year high with more than 8% of balances held by people ages 18 to 29 hitting serious delinquency after going more than 90 days overdue without payment
Student loan debt is a burden that can breed other debts. Graduates struggling to manage their payments may turn to other forms of credit for relief, like credit cards, which can mean the beginning of a vicious debt cycle.
Debt Relief Options for Wisconsin Residents
InCharge is a nonprofit credit counseling service operating in Wisconsin. Through a process known as debt management, InCharge can work with creditors to consolidate credit card debt, lower interest rate paid and arrive at an affordable monthly payment that reduces debt.
The program is open to all credit profiles, which means a bad credit score won’t keep an applicant from qualifying. Instead of sifting through multiple bills, you can make a single payment to InCharge each month. InCharge will then distribute your payment to creditors each month in agreed-upon shares.
A debt management program is just one of many possible solutions to alleviating the burden of debt.
Other options include:
Debt Settlement – This method lets you settle your debts for less than you owe. Borrowers who can make a substantial lump-sum payment can have up to 50% of their debts forgiven. The downside: this process can drag and the interest on your debts may keep growing while saving for that lump-sum payment. Not to mention, it will bludgeon your credit score. Debt settlement is often pursued to erase large amounts of debt without filing bankruptcy.
Debt Consolidation Loan – This is a personal loan you use to pay off debt. The debt consolidation loan should come with lower interest rates than your credit cards, which will effectively decrease the amount you spend per month on interest. It will also allow you to consolidate your debts for streamlined payments, minimizing the risk of missed payments and late fees.
Bankruptcy – Often viewed as unthinkable, but for those suffering from insurmountable debt, bankruptcy can mean a fresh start. Bankruptcy wipes clean all of your credit card debt but tarnishes your credit report for the next 7-10 years. This will make it difficult to establish credit or take out a home or car loan.
Do it yourself plan – If you’d prefer a DIY approach, InCharge offers debt management templates that let you outline your own plan.
Wisconsin Debt Resources
You can find Wisconsin financial assistance at all levels of government. Below are some links to resources offering emergency, home, food and financial assistance.
Emergency Assistance: This is a one-time payment available for low-income individuals with at least one child facing an emergency such as a natural disaster or impending homelessness.
Wisconsin Works (W-2): This is Wisconsin’s version of Temporary Assistance for needy families (TAMF). It is designed to help low-income parents find work through educational and vocational training. It provides cash assistance, as well, for those in the process of looking for work.
Job Access Loans: These loans are meant for low-income parents who need help affording work-related expenses, like transportation or equipment. Contact your local W-2 agency to apply.
BadgerCare Plus: This program offers help to low-income individuals to help pay for medical expenses.
Wisconsin Child Care Subsidy: This program pays a portion of a child’s daycare cost while the parents are working or involved in an “approved activity”.
The Wisconsin Home Energy Assistance Program: This is a federally funded program offering heating and electrical assistance to Wisconsin residents.
WIC (Women, Infants, and Children) Program: This program provides pregnant women and infants nutritional assistance, education and support.
Children’s Health Insurance Program (CHIP): These programs provide health care coverage for low-income families to cover routine check-ups, immunizations and dental care.
Child and Adult Care Food Program (CACFP): This program is for both children and adults. It provides reimbursements for meals served to children in daycare, after-school programs or emergency shelters.
Wisconsin Debt Statistics
Wisconsin is fairly average, as far as the cost of living is concerned. You won’t come across the sky-high prices found in America’s coastal cities. Nor will you find the widespread bargains so common throughout the deep south. Some see Wisconsin (and the Midwest in general) as quintessential middle America.
Here are some stats comparing Wisconsin to the rest of the U.S.
- Wisconsin is ranked 35th in rent with residents paying an average of $1,115 a month.
- On average, residents have a credit score of 725–5th in the country.
- Wisconsin has the 26th highest estimated average income at $72,154.
- The median home value in Wisconsin is $191,600, 32nd
- The state ranks 37th for mortgage debt at $142,993.
- It is tied with Virginia for 22nd highest homeowner rate at 66.6%.
Evers, T. (2020, January) Executive Order #67. Retrieved from https://content.govdelivery.com/attachments/WIGOV/2020/01/29/file_attachments/1368417/EO067-StudentDebtTaskForce.pdf
N.A. (2020, November) Economy at a Glance: Wisconsin. Retrieved from https://www.bls.gov/eag/eag.wi.htm
Stolba, S. (2019, November 6) California Leads Nation in Rent. Retrieved from https://www.experian.com/blogs/ask-experian/research/median-rental-rates-for-an-apartment-by-state/
Suneson, G. (2019, June 27) How much mortgage debt does your state have? Two states are far and away above the rest. Retrieved from https://www.usatoday.com/story/money/2019/06/27/home-debt-states-with-the-most-mortgage-debt-financial-burden/39575457/
Stolba, S. (2019, November 19) Median Home Values by State. Retrieved from https://www.experian.com/blogs/ask-experian/research/median-home-values-by-state/