Will Biden’s college debt forgiveness plan help Missourians?
JEFFERSON CITY, Mo. — The average amount a college student in Missouri borrows to pay for school is roughly $35,000, according to the Department of Education.
In August, President Joe Biden announced that 43 million Americans would see their student loan debt erased under his forgiveness plan. Missouri is right in line with the average student loan debt, with the overall average at $35,889.
“For so many people, this is life-changing,” said U.S. Secretary of Education Miguel Cardona. “We know the pandemic affected us all and some more than others. We want to make sure our borrowers are not worse off than they were before the pandemic.”
According to the Education Data Initiative from 2022, 833,000 Missourians owe money for their college education. It’s about 13.5% of all residents. Under Biden’s plan, Americans that make less than $125,000 annually will have up to $10,000 forgiven from their federal loans. Pell Grant recipients will receive up to $20,000.
“Everyone knows that college costs have gone out of control,” Cardona said. “We’re addressing that. We’re increasing accountability, we’re going after those who have taken advantage of students.”
Missouri Sen. Josh Hawley said the President is abusing his power by forgiving student loans.
“I don’t think that the President has the authority, number one, or the right, number two, to take away the money from hardworking Missourians and give it to some of the wealthiest people in the nation because that’s what happening here,” Hawley said. “The people who benefit from this are disproportionally in the top 10 to 20% of all income earners in the United States.”
The Institute for College Access and Success shows graduates from St. Louis College of Pharmacy and Missouri Valley College in Marshall, both private schools, leave with the highest amounts of debt in the state at $62,085 and $49,000. College graduates from the University of Missouri – Columbia leave with $28,457 and following right behind is Missouri State University in Springfield with $27,075. The lowest average of student loan debt in Missouri is State Technical College in Linn with $1,800.
“Who pays for it?” Hawley said. “Working Missourians pay for it, people who didn’t go to college, who got a job, who are trying to support a family and now their tax money is being taken illegally to illegally pay off these student loans.”
Attorney General Eric Schmitt, who is the Republican nominee for the U.S. Senate race to replace Sen. Roy Blunt, has previously said he is looking into legal challenges against Biden’s plan.
Cardona said under this loan forgiveness program, 90% of the money going to loan debt relief is going to Americans making under $75,000.
“We’re helping everyday Americans who are trying to make ends meet, the middle class, and those that have fallen on hard times,” Cardona said. “I would tell the senator, look at the facts and it’s hard to argue. People are now going to be able to get back on their feet, buy a home, contribute to the economy and yes, it’s going to get people back to school.”
Additionally, under the plan, Biden is capping the number of years a public servant like a nurse, teacher, or police officer has until total loan forgiveness. He is reducing the monthly repayment rates for undergraduate loans to 5% of the borrower’s monthly income.
“We can make it, so they don’t pay anything for a month and then, the interest doesn’t accrue so they’re not buried in interest over time,” Cardona said. “If you’ve made loan payments for 10 years and you’ve served the public for over 10 years, you should have total loan forgiveness now.”
Of the state’s 833,000 borrowers half of them are under the age of 35 and only 15.5% of them will see complete loan forgiveness. Roughly 22% Missourians owe between $20,000 and $40,000. About 1.8% owe more than $200,000.
“We’re using the authority we have to help everyday Americans get back on their feet and move on with life,” Cardona said.
Cardona said the President’s administration is looking at reimbursing Americans who paid off their federal college loans during the pandemic.
In addition to the loan forgiveness, the administration also extended the payment pause on the loans until December 2022. Cardona said the U.S. Department of Education has information for about eight million borrowers. He expects the loan forgiveness process to start within the next month.