Story at a glance
- About 90 percent of the expected aid goes to Americans earning less than $75,000 a year.
- States with relatively large populations, such as California and Texas, have the most borrowers who meet the criteria for forgiveness.
- The Department of Education recommends filing for an exemption before November 15 before federal loan repayments restart in January.
The White House on Tuesday released a state breakdown of borrowers affected by President Biden’s student debt forgiveness plan, which could completely eliminate the student debt of 20 million borrowers.
About 90 percent of the expected aid goes to Americans earning less than $75,000 a year, according to a White House factsheet. The Biden administration rolled out plans in August to forgive up to $10,000 for federal borrowers earning less than $125,000, and up to $20,000 for borrowers who meet the income criteria and received a Pell Grant while in college.
Biden’s plan could affect more than 40 million total borrowers in all 50 states if all eligible applicants apply online in early October. The Department of Education recommends filing for relief before November 15 before federal loan repayments resume in January.
States with relatively large populations, such as California and Texas, have the most borrowers who meet the criteria for forgiveness. More than 3.5 million student loan holders in California are eligible for up to $10,000 each in loan forgiveness — more than 2.3 million have received Pell Grants.
In Texas, more than 3.3 million borrowers could see up to $10,000 removed from their balances, while just over 2.3 million former Pell Grant recipients are eligible for up to $20,000.
Wyoming has the fewest borrowers eligible for student debt forgiveness, where more than 31,000 of its approximately 50,000 debt holders can receive up to $20,000.
Mississippi has the highest percentage of Pell Grant recipients benefiting at 76 percent: 316,400 out of 417,200. Meanwhile, about 74 percent of borrowers in New Mexico could see up to $20,000 of their loans disappear.
Arkansas, Utah and Idaho round out the top five states with the highest percentage of their eligible borrowers who may see up to $20,000 wiped from their student debt balances.
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The government said the greater forgiveness for Pell Grant recipients could help narrow the racial wealth gap, as nearly 71% of black and 65 percent of Latino students who receive Pell Grant are recipients.
Pell scholarships, which have a maximum reimbursement of $6,895 per academic year, are typically awarded to undergraduate students in severe financial need. For the current academic year, the number increased in March.
Education Minister Miguel Cardona said on: social media Tuesday said the $400 Pell Grant increase “cuts college costs by 70 percent” for students attending historically black colleges and universities.