The White House has released a data sheet on how many people in each state could benefit from the Biden administration’s plan for student debt relief. The breakdown shows that borrowers in every state and U.S. territory can benefit from the loan waiver plan, which is likely to push back Republican governors who chided the Biden administration for creating a plan they believe is appropriate. for the rich.
The governors who signed the letter state that, based on White House data, more than 15 million student loan borrowers are eligible for forgiveness. Of those borrowers, more than 10 million were eligible for Pell scholarships as students and would be forgiven $20,000 in loans. By showing how much of their residents benefit, the White House is putting pressure on those governors to explain their opposition to voter loan forgiveness.
The Biden administration’s debt forgiveness plan will forgive up to $20,000 for students who received Pell Grants while in college (Pell grants are federal financial aid generally awarded to low-income students). Other eligible borrowers will see $10,000 in forgiveness if they meet the income criteria. Borrowers earning less than $125,000 ($250,000 for couples) are eligible for the plan.
The government estimates that its loan forgiveness plan will eliminate the debts of 20 million borrowers, with 43 million borrowers eligible for a certain amount of forgiveness. Many borrowers with smaller student loans were unable to complete their degrees and often fared worse than if they had never entered college, trying to pay back student loans without the benefit of the increased earning capacity that a degree provides.
The White House fact sheet highlights that 90 percent of debt relief goes to households earning less than $75,000 a year. The data also shows that no aid will go to the top 5 percent of earners.
By targeting borrowers with the greatest economic need, the fact sheet says, “the government’s actions are also likely to help narrow the racial wealth gap.” Borrowers of color, who often take on more student debt to attend college than their white peers, will benefit significantly. Borrowers of color are more likely to have received Pell scholarships while in college, making them more likely to receive $20,000 in total loan forgiveness. Nearly 71% of black undergraduate borrowers are Pell Grant recipients and 65% of Latino students are Pell Grant recipients.
The White House said it plans to release more details in the coming weeks about how the individuals will benefit from the student debt relief plan.
The application for student loan remission will be available at the beginning of October. Borrowers can use this federal website to sign up for notifications and receive updates as soon as the application is available.
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