Aug 24, 2022 - News

What college debt forgiveness means to Mass.

A chart showing Mass. student debt.

Data: Federal Student Aid; Note: Includes outstanding principal and interest balances from Direct Loans, Federal Family Education Loans and Perkins Loans; Table: Simran Parwani/Axios

The Biden administration's plan to cancel student loan debt for millions of borrowers could be a boon for Massachusetts, which has more college graduates per capita than any other state.

Why it matters: Boston is a big college town that struggles to keep graduates from fleeing to lower-cost states once they're saddled with debt.

  • Loan forgiveness could be a boost for struggling middle-class graduates, and could aid the state's ability to retain workers with bachelor degrees.

What's happening: The administration announced Wednesday that it will forgive up to $10,000 for those earning under $125,000 a year, and an additional $10,000 for Pell Grant recipients, Axios' Sophia Cai and Erin Doherty report.

  • And for future borrowers, Biden will cap payments at 5% of a borrower's monthly income and forgive balances of $12,000 or less after 10 years.

By the numbers: Massachusetts has the 29th-highest student debt average in the nation, at $34,146, according to the Education Data Initiative.

What they're saying: Beth Kontos, president of the Massachusetts branch of the American Federation of Teachers, wrote in a widely distributed statement that loan forgiveness will be especially helpful for educators who are required to hold advanced degrees.

  • "President Biden's student loan forgiveness plan will be life-changing for tens of thousands of Massachusetts teachers, counselors, librarians, and other workers who have dedicated their lives to public service," she wrote.
  • U.S. Sen. Elizabeth Warren, who made debt forgiveness a cornerstone of her 2020 presidential campaign, wrote in a statement that Biden "has taken a powerful step to help rebuild the middle class."

The other side: Gov. Charlie Baker told reporters Wednesday Biden's plan is "unfair," according to the State House News Service.

  • Baker claimed that targeted workforce programs are more beneficial than blanket forgiveness.
  • At the same event, U.S. Rep. Jake Auchincloss (D-Newton) said he'd rather see Biden support career development tools for workers and debt relief go to medical bills.

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