Aug 24, 2022 - News

What student loan forgiveness means for Arizona

Federal student loan debt owed by borrowers in Arizona, by age group
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

President Biden announced a student loan forgiveness plan that could cancel as much as $20,000 in debt for borrowers, which will provide financial relief for nearly 900,000 Arizonans.

Driving the news: Biden's plan will forgive up to $20,000 in debt for Pell Grant recipients and up to $10,000 in federal student loan debt for borrowers who earn less than $125,000 a year, Axios' Sophia Cai and Erin Doherty report.

  • Biden also extended the moratorium on student loan repayments, which was set to expire on Aug. 31, to Dec. 31.

What they're saying: Cesar Aguilar, executive director of the Arizona Students Association, says he would've liked to see Biden's plan go further but described it as "good news," telling Axios that he hopes it sets the stage for bolder moves in the future.

  • "I've been organizing in the student movement for a very long time and I think this is a good first start," Aguilar said.

By the numbers: About 887,100 Arizonans, or 12.4% of the state, have student loan debt, and the average individual owes $35,396, according to the Education Data Initiative.

  • That puts Arizona 23rd nationally for average debt per individual.
  • Arizonans owe a cumulative $31.4 billion in student loan debt.

Democratic U.S. Sen. Mark Kelly, who's up for re-election in November, supports Biden's plan. "The reality is college costs too much, and the federal government should not be profiting off of young graduates," he said in a statement to Axios.

  • Kelly said he's glad the plan is "more targeted" than other proposals that would cancel all student loan debt.

Yes, but: Blake Masters, Kelly's Republican opponent, vehemently opposed the plan. "Robbing Peter to pay Paul is socialism and not the American way. Sadly, Joe Biden and Mark Kelly continue the Venezuela-ification of America," he told Axios in a statement.

Be smart: The issue has forced the Biden administration to balance an attempt to appeal to younger and minority voters ahead of the midterms with the risk of adding to rampant inflation, thereby giving Republicans another talking point ahead of elections.

Between the lines: The Department of Education lacks income data for most Americans with student debt, so implementing the cancellation under an income cap means the agency will either have to ask borrowers to attest that they fall below the income limit or borrowers will have to apply — a process that could be lengthy.

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