Will Biden’s College Debt Cancellation Plan Help Missourians? – Newstalk KZRG
JEFFERSON CITY, Mo. — The average amount a Missouri student borrows to pay for college is about $35,000, according to the Department of Education.
In August, President Joe Biden announced that 43 million Americans would have their student loan debt erased under his remission plan. Missouri is exactly the average student loan debt, with an overall average of $35,889.
“For so many people, this is life changing,” said US Education Secretary Miguel Cardona. “We know that the pandemic has 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 2022 Education Data Initiative, 833,000 Missourians owe money for their college education. That’s about 13.5% of all residents. Under Biden’s plan, Americans earning less than $125,000 a year will see up to $10,000 forgiven on their federal loans. Pell Grant recipients will receive up to $20,000.
“Everyone knows tuition has gotten out of control,” Cardona said. “We take care of that. We increase accountability, we prosecute those who have taken advantage of students.
Missouri Sen. Josh Hawley said the president was abusing his power by canceling student loans.
“I don’t think the president has the number one authority or the number two right to take the money out of hard-working Missourians and give it to some of the wealthiest people in the country because it’s is what’s going on here,” Hawley said. “People who benefit are disproportionately in the top 10-20% earners in the United States.”
The Institute for College Access and Success shows that graduates of St. Louis College of Pharmacy and Missouri Valley College in Marshall, two private schools, walk away with the highest debts in the state at $62,085 and $49,000 . College graduates from the University of Missouri-Columbia walk away with $28,457 and follow just behind Missouri State University at Springfield with $27,075. The lowest average student loan debt in Missouri is Linn State Technical College at $1,800.
” Who pays ? Hawley said. “Workers in Missouri are paying for this, 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 for illegally repaying these student loans.”
Attorney General Eric Schmitt, who is the Republican nominee in the U.S. Senate race to replace Sen. Roy Blunt, has previously said he is considering legal challenges against Biden’s plan.
Cardona said that under this loan forgiveness program, 90% of the money for debt relief goes to Americans earning less than $75,000.
“We help ordinary Americans trying to make ends meet, the middle class and those who have fallen on hard times,” Cardona said. “I would say to the senator, look at the facts and it’s hard to argue. People will now be able to get back on their feet, buy a house, contribute to the economy and yes, it will get people back to school.
Additionally, under the plan, Biden caps the number of years a public servant like a nurse, teacher or police officer has until the loan is fully forgiven. It reduces monthly repayment rates for undergraduate loans to 5% of the borrower’s monthly income.
“We can do that, so they don’t pay anything for a month, and then the interest doesn’t accrue, so they don’t get buried in interest over time,” Cardona said. “If you’ve made loan payments for 10 years and served the public for more than 10 years, you should now be in full loan forgiveness.”
Of the state’s 833,000 borrowers, half are under 35 and only 15.5% will see full loan forgiveness. About 22% of Missouri residents owe between $20,000 and $40,000. About 1.8% owe more than $200,000.
“We use the authority we have to help ordinary Americans get back on their feet and get on with their lives,” Cardona said.
Cardona said the president’s administration is considering reimbursing Americans who paid off their federal college loans during the pandemic.
In addition to the loan forgiveness, the administration also extended the loan payment pause through December 2022. Cardona said the US Department of Education has information on about eight million borrowers. He expects the loan forgiveness process to begin next month.