THU AM News: Student loan forgiveness plan could impact hundreds of thousands of Wisconsin borrowers; State tax collections $1.6 billion higher for ‘21-22 than previous projection

— Several hundred thousand borrowers in Wisconsin could get relief from billions of dollars in debt because of the Biden administration’s student loan forgiveness plan. 

Nick Hillman, director of the Student Success Through Applied Research Lab in Madison, says as many as 220,000 borrowers in the state could have their federal loans completely forgiven if they meet the income threshold. In an interview yesterday, he noted about 31 percent of the approximately 715,800 Wisconsin residents with federal student loan debt have less than $10,000 in debt. 

“We’ve known for a long time that some of the borrowers that are struggling the most are those that have the smallest debts,” Hillman told 

The White House yesterday announced the Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the federal agency, and up to $10,000 for non-Pell Grant recipients. This loan forgiveness will only be provided to borrowers whose individual income is less than $125,000, with a threshold of $250,000 for married couples. 

For comparison, the median individual income in Wisconsin was about $33,000 in 2020, and the state’s median income was about $63,000, according to the U.S. Census Bureau. 

A 2020 report from the SSTAR Lab found about 23 percent of the state’s 3.1 million labor force participants had federal student loan debt. These 715,800 borrowers owed a total of $23.1 billion in federal education loans, and had an average balance of $32,230, the report shows. 

It also notes student loan debt in Wisconsin is “relatively low” compared to other states, ranking 45th in average debt per borrower across all states, Puerto Rico and the District of Columbia. Wisconsin also has lower aggregate and per-borrower student debt levels, as well as fewer borrowers overall, than neighboring states with the exception of Iowa, according to the report. 

Hillman explained most borrowers who default on their loans and struggle with making payments aren’t “the ones who have doctorates or law degrees.” Rather, they’re often those who enrolled for a semester, took out a loan, and dropped out without obtaining a degree. 

“They don’t get that return on investment in the labor market, so they basically have that debt and no degree,” he said. “Those students are the ones who’ve struggled the most historically … the impact can be huge to just have that off of their credit reports, have that off of their family budgets.” 

He also highlighted federal data showing about 57 percent of undergraduates who took out loans to attend a college in Wisconsin in the 2017-18 school year received a Pell Grant. 

While it’s not clear exactly how many borrowers in the state will qualify, he said in an email this figure “gives at least some context that a fair share of loan holders will have also been Pell Grant recipients and therefore eligible for that $20k.” 

See more on the loan forgiveness plan here: 

— State tax collections for the 2021-22 fiscal year came in $1.6 billion higher than what the Legislative Fiscal Bureau projected just seven months ago, driven by strong growth in income and corporate taxes.

The LFB in January had expected the state would finish the 2021-22 fiscal year with a surplus of $2.8 billion. Adding the higher-than-expected tax collections pushes that to around $4.4 billion, though a final accounting of what the state spent during the 12-month period won’t be completed until October.

It continues a run of good fiscal news for the state with Gov. Tony Evers saying Tuesday the state is on path to finish the 2021-23 biennium with a surplus of more than $5 billion. He called for using some of the projected surplus to pay for a $600 million tax cut package, but GOP legislative leaders quickly rejected it. They want to wait until the next biennium to put together a tax cut package.

Overall, general purpose revenue tax collections increased 5 percent during the fiscal year to $20.5 billion, according to numbers from the Department of Revenue. That’s 8.6 percent higher than what LFB projected in January. Then, the agency projected general fund tax collections for 2021-22 would drop 3.2 percent compared to the year before.

Income tax collections for 2021-22 came in $1 billion higher than expectations for the most recent fiscal year. Withholding tables were changed in January to reflect recent tax cuts. That was expected to drop withholding tax collections by 6.4 percent over the last six months of 2021-22. But those collections were only 4.1 percent lower, according to LFB.

Meanwhile, estimated payments for individual and corporate taxes were higher in April and June than what previously expected from businesses and investors over the first six months of the year.

LFB also projected in January the state would take in $20.9 billion in taxes during the 2022-23 fiscal year. The DOR report doesn’t include any updates on that figure. The Evers administration in November will provide the first look at expected revenues for the 2023-25 biennium with LFB to follow with its own projection in January.

See the DOR release:

See the LFB memo:

— Preliminary July unemployment rates declined in all 12 of Wisconsin’s metropolitan areas over both the month and year, according to the latest local figures from the DWD. 

The Department of Workforce Development release shows July unemployment rates ranged from 2.5 percent in Madison to 4.2 percent in Racine. 

Meanwhile, July unemployment rates also declined or stayed the same in 29 of the state’s 35 largest cities over the month. Over the year, rates declined or remained unchanged in 33 of those cities, the release shows. 

At the county level, unemployment rates either declined or stayed the same in 63 of Wisconsin’s 72 counties over the month. Over the year, that number increases to 70 counties. Unemployment in July ranged from 2.5 percent in Dane County to 9.1 percent in Menominee County. 

See the release: 

— UW-Stevens Point has announced a new partnership with Milwaukee Tool with the manufacturer providing a $1 million tool and equipment endowment through 2030. 

According to a release, students in the university’s College of Natural Resources will get access to tools, equipment and training through the partnership. Power tools and hand tools will be used in various courses, with the company providing repair services for the tools when needed. 

Rick Gray, executive vice president of Milwaukee Tool, says the partnership with UW-Stevens Point “will provide us with regular user feedback that will help us deliver on the demands of forestry and conservation professionals in a constantly changing work environment.”

See more on the partnership in the release: 

— Madison has been ranked third among U.S. cities with the largest recent growth in startup funding by York IE, an investment firm based in New Hampshire. 

After Kirkland, Wash., and Stanford, Calif., Madison came in third on the firm’s list, which focuses on investment funding in the second quarter of this year. It spotlights three significant funding rounds: a $20 million Series A round for EnsoData; a $30 million Series B round by Moxe Health; and a $240 million Series E round for Fetch Rewards. 

Fetch Rewards’ large round in April drove “a huge increase” in Madison’s funding growth, report authors wrote. The list shows a 793 percent growth rate for the city, calculated by comparing the total funding amount for the second quarter with the city’s average quarterly funding amount over the prior four quarters.  

Download the full report: 

— The vice president for university relations at Marquette University, Paul Jones, has been named chair of the board of directors for the Greater Milwaukee Foundation. 

The former Harley-Davidson executive previously served as the board’s vice chair, according to a release from the university. The philanthropic foundation has existed for more than a century and has more than 1,400 individual charitable funds, the release shows. 

“I am truly honored to serve as the chair of the Greater Milwaukee Foundation and help to further its mission of sparking philanthropy throughout the area to address critical issues of great need,” Jones said in a statement. 

See the release: 

— Health officials in Wisconsin are “actively monitoring” the spread of polio in New York but are not conducting any wastewater testing for poliovirus. 

Earlier this year, the virus that causes polio was discovered in New York state, London and Jerusalem, raising concerns among health officials around the world. One case of polio-related paralysis was reportedly identified in New York earlier this summer. 

According to the state Department of Health Services, the polio virus was last reported in Wisconsin in 1979, when three cases were identified. 

But the recent polio detection comes as some children in the state have fallen behind on regular childhood vaccinations during the pandemic. 

“We have seen a slight decline in many vaccines, including polio and urge parents and guardians to get their children caught up on immunizations …  If your child has fallen behind, call your care provider to make an appointment, it’s not too late to catch up,” DHS spokeswoman Jennifer Miller said in an email. 

As of 2021, the statewide polio vaccination rate among young children was 83.81 percent, DHS figures show. Since 2013, that rate has ranged from 84.93 percent to 86.54 percent. 

Miller said DHS is “always concerned about the possibility of vaccine preventable diseases finding their way into our community,” particularly in places where lower vaccination rates could allow more transmission. 

“As we receive more guidance from the federal government, we will provide an update regarding our surveillance efforts,” she said. 

See the polio vaccination rates here: 

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