Democrats Push to Lower Student Loan Burden for Alaskans
Measure cuts high loan rates for Alaskans who remain in or return to Alaska
JUNEAU – Today, seven Democratic legislators announced they will pre-file legislation to reduce the high cost of student loans for Alaskans who stay in or return to Alaska. “It is telling that you can get a 2.75 percent interest rate for a used car loan, but pay upwards of 6.5 to 8 percent for job training and college loans in Alaska,” said Rep. Les Gara. Lowering the cost of education and job training for Alaskans helps both students and the state by reducing costs to Alaskans and giving all Alaskans who want to open new career doors the incentive to help improve Alaska’s economy.
“Student loans are an investment in human capital, and human capital is the only asset that appreciates over time, rather than depreciates. It makes a lot of sense for the state to invest in our human capital base,” said Representative-Elect Harriet Drummond.
Under the proposed legislation, all Alaskan students would receive an annual reduction of 2.5 percent of the principal amount of their Alaska student loans each year if the borrower establishes and maintains Alaska residency. According to the Alaska Student Loan Corporation (ASLC), a 2.5 percent principle reduction is roughly equivalent to a 3 percent interest rate reduction, and is a cheaper way to administer the discount.
According to CNBC (article attached), student loan debt in America is roughly $1 trillion in size, exceeds either auto or credit card debt, and is second only to mortgage debt. “Money shouldn’t be a barrier to college and job training, and student loans shouldn’t cost Alaskans twice the rate of a used car loan. Student loan debt is crushing for many people and we should stand with people who want to succeed and contribute to the community and economy,” said Rep. Les Gara.
Molly Towner, an Anchorage-area teacher and single mother of two children, said, “I attended graduate school in Alaska when my children were very young to prepare myself for a job that could cover the living expenses for our family of three. I am committed to the teaching profession and the state of Alaska. It is challenging, however, to cover all of our expenses, which include a monthly student loan payment of over $600. I support the plan to reduce the student loan burden for families like mine in Alaska through the student loan reduction bill.”
“For Alaska to be competitive, we need to make sure our workforce gets the training it needs and that our students put their skills to work in Alaska,” said Rep. Guttenberg. “This bill makes it easier for Alaskans to stay here or to return to help build our state.”
House Democratic Leader Beth Kerttula (Juneau), Representative Les Gara (D-Anchorage), Representative-Elect Harriet Drummond (D-Anchorage), Representative David Guttenberg (D-Fairbanks), Representative Lindsey Holmes (D-Anchorage), Representative Scott Kawasaki (D-Fairbanks), and Representative Chris Tuck (D-Anchorage) are primary sponsors of the legislation.