As many as 232,100 borrowers in Nebraska could qualify for student loan forgiveness under a program announced by the Biden administration last month, including an estimated 136,000 borrowers who received Pell grants.
The White House released state-by-state figures Tuesday estimating how many people could potentially benefit from the student loan debt forgiveness program announced in August.
The Biden administration said it was canceling up to $20,000 in student loan debt for those who received Pell grants, and up to $10,000 for other borrowers, if those individuals earn less than $125,000 per year.
In all, 94.5% of the roughly 245,600 Nebraskans who have student loan debt would be eligible for some level of forgiveness according to the estimates, which combine data from the U.S. Department of Education and the U.S. Census Bureau.
People are also reading…
Carmel Martin, a deputy assistant to President Biden for economic mobility, told reporters the debt forgiveness is part of a three-part plan to “provide more breathing room” for borrowers, particularly as they continue to recover from the economic strains of the COVID-19 pandemic.
“This relief is targeted to borrowers with the highest economic need,” Martin said.
Roughly 90% of the debt forgiveness will go toward individuals earning less than $75,000 annually, with no relief going to any borrowers who are in the top 5% of household incomes in the U.S.
Martin said Biden’s plan to cap interest rates on student loans and cut red tape for borrowers hoping to qualify for public service loan forgiveness round out his administration’s first steps toward addressing student loan debt.
The Education Department is aiming to launch an application website for student loan debt relief in October, said Deputy Undersecretary for Education James Kvaal, but borrowers can sign up for more information and notifications at StudentAid.gov/debtrelief.
Once the website to apply for debt relief goes live, qualifying borrowers could expect to see their student loans forgiven or reduced beginning as early as January 2023, coinciding with the end of a freeze on federally backed student loan payments.
Kvaal said the Education Department does not expect legal challenges to the program — Republican politicians and business groups have promised to sue — would be successful.
“We have looked at the issue of (Secretary of Education Miguel Cardona’s) legal authority quite extensively,” Kvaal said. “And we believe the secretary has clear authority to protect borrowers from financial harm resulting from the pandemic.”
A 25-page memo from the Justice Department, released Aug. 23, notes: “Prior secretaries have exercised the same authority to categorically waive statutory and regulatory obligations for borrowers … who suffered economic hardship as a result of a national emergency.”
Democratic lawmakers who took part in the call with reporters Tuesday hailed the Biden administration’s program as providing a leg up to an estimated 40 million Americans who hail from every corner of every state.
Sen. Elizabeth Warren, who made student loan debt forgiveness a major piece of her unsuccessful 2020 presidential campaign, said she hears stories about what such a move would do “when I’m anywhere in Massachusetts.”
“For those who aren’t dealing with student loan debt right now, it may be hard to see just how soul crushing this debt can be,” Warren said. “People are frightened by what it might mean for their futures and ashamed of what it says about their past.”
Canceling student loan debt will help “millions of families” save to buy a home or a small business, or help couples decide to start a family, Warren said, which will help “middle-class and working-class Americans born into families that couldn’t afford to pay (for college) out of pocket.”
No Republicans took part in Tuesday’s media call, which took place over Zoom. Nebraska politicians have blasted the plan as a $330 billion boondoggle since it was announced.
Sen. Ben Sasse called the debt forgiveness plan a scheme that “forces blue-collar workers to subsidize white-collar graduate students,” while NU Regent Jim Pillen, the Republican candidate for governor, claimed forgiving student debt was “Big Government Socialism.”
Earlier this month, answering questions from students at a Turning Point USA event at the University of Nebraska at Kearney, Gov. Pete Ricketts called the plan “unfair to the people who are paying off their loans.”
Ricketts later joined 21 other governors bashing the plan in a letter to Biden.
Martin said “many Americans are supportive of making student loan debt more manageable,” and said forgiving the debt of millions of borrowers will not have any impact on a $1 trillion deficit reduction forecast for next year — a figure Republicans dispute.
Kvaal, who heard from University of Nebraska-Lincoln students concerned about the cost of attending college as well as the specter of taking on student loan debt last week, said the debt crisis did not happen overnight but is the result of decades of state disinvestment in higher education.
Reducing the debt burden is one step toward building a higher-education system that is more affordable, equitable and inclusive, he said.