Aug 24, 2022 - News

How Biden's student loan forgiveness will affect Texans

Illustration of a ball and chain replacing the tassel of a graduation cap, with the chains breaking.
Illustration: Maura Losch/Axios

Millions of Texans may be off the hook for some or all of their remaining student loan debt as part of the Biden administration's new plan to alleviate the burden of higher education on Americans.

The big picture: The long-awaited changes could completely cancel student loan debt for approximately 20 million Americans, Axios' Sophia Cai and Erin Doherty report.

  • The cost of attending a four-year public or private college has nearly tripled since 1980, even after accounting for inflation, per the White House.

Why it matters: Black Americans tend to be impacted the most by student loan debt, and data shows Black women tend to have the highest student loan debt of any demographic, ABC News reports.

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

Details: Texans collectively owe more than $120 billion in student loans, an average of roughly $33,000 per borrower, according to the national Education Data Initiative. Roughly half of the state's 3.6 million borrowers are younger than 35.

Zoom in: UT Dallas and UT Arlington — with in-state undergraduate tuition under $14,000 — are among the cheapest universities in North Texas. Private schools like TCU and SMU have tuition over $50,000.

  • Census data shows 33% of Dallas County residents have at least a bachelor's degree. The median household income is $61,870, which is well within the federal government's threshold for getting some student loans forgiven.
Data: The Institute for College Access and Success; Chart: Erin Davis/Axios Visuals

How it works: Pell Grant recipients can have up to $20,000 of debt canceled and non-Pell Grant recipients can have up to $10,000 of debt canceled if their individual income is less than $125,000 or family income is less than $250,000, the White House said.

  • Repayments that were paused during the pandemic won't resume until January. The government is also creating a new income-driven repayment plan that it says will "substantially reduce" how much money low-income and middle-income borrowers put toward student loans each month.
  • Borrowers who work for nonprofits, the military, or federal, state, tribal or local governments may be eligible to have all of their student loans forgiven through the Public Service Loan Forgiveness program if they apply by Oct. 31.

What they're saying: Shareefah Mason, the dean of Dallas College's educator certification program and a Black woman with $70,000 in student loans, told ABC News that the changes will open many doors for minorities — including her students — who have historically lacked access to higher education.

  • "There needs to be a space created for them to make enough money to pay their student loans without having to sacrifice their ability to create generational wealth for their families," Mason said.

What's next: If the Department of Education has your income data already, you may automatically receive debt relief. If not, you will need to complete an application that will go live in the coming weeks.

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