Loan forgiveness plan can wipe out 28% of South Carolinians debt, data says
CHARLESTON, S.C. (WCSC) - There are about 43 million Americans that owe student loans, but some of those borrowers will soon get some relief.
President Biden announced on Wednesday that people that make less than $125,000 per year would be eligible for the $10,000 loan forgiveness plan. For recipients of Pell Grants, those with the most financial need, the federal government would cancel up to an additional $10,000 in federal loan debt.
Dr. Tony Allen, Chair of the President’s Board of Advisors on HBCUs, says this could go a long way to help graduates, especially those from Historically Black Colleges and Universities. He says the average HBCU student/alumni owes about $50,000 in student debt.
“So, we do think that folks have paid down their loan debt over time,” Allen said. “The opportunity for Pell-eligible students to receive $20,000 and for non-eligible students to receive $10,000 is a significant marker for them as they are thinking about how to repay their loans and continue their career.”
Allen says about 90% of the 43 million Americans are alumni earning less than $75,000 a year. He says a substantive amount of Americans, regardless of institution, will be zeroed out.
In reference to South Carolina, there are about 729,700 total borrowers of student loans in the state, according to the Federal Student Loan Portfolio from Federal Student Aid. About 205,600 of those people have $10,000 or less left to owe the government. When dividing these two numbers, it means about 28% of South Carolinians will have their debt completely wiped out with this new plan.
“Some might see this as significant as just the first step,” Allen said. “I see it as a significant step as it relates to discussion around college affordability and student debt and what that might mean if we continue to support efforts like this over a longer time over the horizon.”
Although this loan forgiveness plan is making an impact nationally, local students like freshman Margaret Jacaruso at College of Charleston say she is seeing this as a big opportunity.
“I feel like college, especially, is turned into more of a privilege,” Jacaruso. “Especially for minority groups who might not have the resources to attend college because it is a massive financial burden. And I think that that deters a lot of people from getting an education and maybe moving more advanced in their lifetime. And I’m hopeful that the student loan forgiveness encourages a lot more people to go to college and it opens the doors for a lot more people to have the access to a college education and what comes after that.”
Current students would only be eligible for relief if their loans were originated before July 1, 2022. Biden is also extending a pause on federal student loan payments for what he called the “final time” through the end of 2022.
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