Biden’s student loan forgiveness cancels debt for millions. How many in MO, KS will benefit?
More than a million people in Kansas and Missouri could see at least some debt relief after Wednesday’s White House announcement that the federal government will forgive up to $20,000 in student loans for those who qualify.
The government will forgive up to $20,000 in loans for Pell Grant recipients and up to $10,000 for other borrowers. In order to have your loans canceled, your income must be less than $125,000, or less than $250,000 for a married couple.
Out of the more than 45 million people in the U.S. who owe a collective sum of $1.6 trillion, roughly 20 million people could soon see their student loan balances completely erased, according to the White House.
More than 60% of Americans with student loans are Pell Grant recipients, which is a federal grant intended to help students with “exceptional financial need” pay for college.
The average borrower in the U.S. has about $38,000 in student debt.
How many people will this help in Missouri?
According to the latest numbers from the federal government, around 830,000 Missourians—more than 13% of state residents—have student loan debt, totalling $29.5 billion. More than half of Missouri borrowers are under age 35.
The average Missouri borrower owes about $36,000, with about one in five borrowers owing between $20,000 and $40,000. That’s slightly under the national average.
There are about 125,000 Pell Grant recipients in Missouri.
How many people will this help in Kansas?
In Kansas, there are around 380,000 people living with student loan debt totalling $12.5 billion, according to the latest numbers from the federal government. That’s just over 13% of state residents. More than half of Kansas borrowers are under age 35.
The average Kansas borrower owes around $33,000, with about one in five borrowers owing between $20,000 and $40,000. That’s about $5,000 under the national average.
There are 58,000 Pell Grant recipients in Kansas.
Are loan payments still paused?
Yes. Loan repayment will start again in January 2023, according to the White House.
Why is this happening now?
Forgiving student loans was one of items that President Joe Biden campaigned on in 2020. The goal of the forgiveness program is to offer some relief to people still reeling financially from the pandemic, to help make loan payments smaller and to protect communities that disproportionately deal with student loan debt.
For example, nationwide, Black people who have student loans owe $25,000 more on average than their white counterparts, according to the Brooking Institute. Black borrowers are also more likely to struggle making those loan payments, in comparison to white borrowers, according to a study by Lending Tree.
How do I sign up to get my loans forgiven?
If the U.S. Department of Education has your income information, your loans will be forgiven automatically. Otherwise, you’ll need to do an application process.
The program is still sorting out the details for how borrowers will sign up, you can sign up to get notifications from the federal government when that information is available.
Officials said the program will be up and running and accounts will reflect the cancellation before loan payments start back up in January.
This story was originally published August 24, 2022 at 6:53 PM.
