Whitmer directive aims to lower student loan cost
Thu, May 25, 2023 8:40 AM
By Scott McClallen, The Center Square
Gov. Gretchen Whitmer signed an executive directive aimed at lowering student loan costs for Michiganders.
The directive instructs Michigan departments to assess the costs and benefits of the state re-entering the market as a student loan originator, determine enhancements to protect borrowers, improve educational materials, and consider any additional measures to support borrowers.
The directive anticipates a U.S. Supreme Court decision on Pres. Joe Biden’s student loan proposal to cancel between $10,000 and $20,000 of student loan debt, depending on income level.
“To ensure Michiganders have the tools they need to compete in a global economy, we must work together to expand access to quality, affordable higher education,” Whitmer said in a statement. “In Michigan, we have established several programs to lower the cost of skills training and college so anyone can envision their future in our state. Together, we will keep creating economic opportunity and growing our state by lowering costs, attracting and retaining young people, and meeting business talent needs. Let’s keep working together to put every young person on a path to a bright future by expanding their education options and ultimately, improving their quality of life.”
Whitmer’s directive aims to lower costs for Michiganders by instructing the Michigan Department of Treasury to look at the benefits of Michigan restarting as a student loan originator; including whether this could permit Michigan borrowers to access lower interest rates and enable borrowing by underserved communities, and the effects of allowing Michiganders to refinance their current loans with the state.
“Paying for a college education often requires students and families to take out loans to cover tuition, books, and housing,” Treasurer Rachael Eubanks said in a statement. “Finding innovative and responsible ways to make student loans more affordable can help students achieve their dreams while minimizing the amount of debt needed. I look forward to working with Governor Whitmer and the other state departments to problem-solve this very important issue.”
Whitmer set a goal for 60% of working-age Michiganders to obtain a skill certificate or degree by 2030. The second-term governor said about 1.4 million Michiganders have student loans totaling $51 billion in debt.
Additionally, the Michigan Department of Agriculture and Rural Development, including the Office of Rural Development, the Office of the State Employer, and the Department of Labor and Economic Opportunity must consider additional measures to lower costs for borrowers and reduce student loan burdens for Michiganders.
Whitmer instructed the Department of Insurance and Financial Services to consider whether regulatory improvements could make loans more affordable and more transparent. The study will also consider whether creating a student loan ombudsperson would further these goals.
The Department of Treasury must also work with the Michigan Department of Education, DIFS, and the boards of higher education institutions in Michigan to assess current materials and outreach strategies to new and existing borrowers, identify gaps, and develop and disseminate additional educational materials for borrowers and potential borrowers.