Education Department reveals states with highest number of student loan borrowers for Biden’s loan forgiveness plan.
President Biden’s Student Loan Forgiveness Plan Targets California, Florida, and Texas
Last week, President Joe Biden’s administration made a renewed effort to provide billions in student loan cancellations, with the majority of affected borrowers residing in the influential states of California, Florida, and Texas.
The Biden administration recently released state-specific data on student loan forgiveness, following the Department of Education’s notification to 804,000 borrowers that their student loans would be automatically discharged, totaling $39 billion.
Adjustments to Repayment Plans
The Department of Education announced changes to calculating payments for income-driven repayment plans. These adjustments will result in reduced balances for borrowers who have made payments over the past 20-25 years. Additionally, the Education Department will now consider partial or late payments and deferred payments towards the repayment process.
These repayment changes come after the Supreme Court rejected Biden’s plan to forgive up to $20,000 in student loans for borrowers earning less than $125,000. As a result, the administration is exploring alternative measures to implement broader student loan relief, which is expected to be a key focus of Biden’s reelection campaign.
Concerns and Legal Standing
The $39 billion forgiveness plan has raised questions among lawmakers and officials regarding its fate, similar to the broader forgiveness plan. However, experts suggest that since Congress already authorized loan forgiveness in connection with income-driven repayment plans in the 1990s, Biden’s relief plan is likely on solid legal footing.
Attorney Abby Shafroth, co-director of advocacy and director of the student loan borrower assistance program at the National Consumer Law Center, emphasized that the Biden administration is legally obligated to rectify any instances where forgiveness has not occurred due to administrative errors.
“This program is specifically designed for individuals who have been in repayment for decades,” Shafroth stated.
State Breakdown: California
California has the highest number of eligible borrowers for student loan forgiveness, with 61,890 individuals. As a blue trifecta state, where Democrats hold both chambers of the legislature and the governor’s office, California strongly supported President Biden in the 2020 election. By continuing to advocate for student loan forgiveness, Biden is likely to gain additional support for his 2024 reelection campaign.
Governor Gavin Newsom (D-CA) has been a proponent of student loan forgiveness. In March, he signed budget bills that included an income tax exemption for forgiven federal student loans. Prior to this, California was one of seven states where residents could face a tax bill for canceled student loans. Under Biden’s adjusted income-driven repayment plan, California residents are eligible for $2,958.80 million in debt relief.
State Breakdown: Florida
Florida has 56,930 borrowers eligible for student loan forgiveness, amounting to $3,036.80 million in debt relief. As a red trifecta state, Florida stands in contrast to California’s political landscape.
Governor Ron DeSantis (R-FL), who is running for president in 2024, has been a vocal critic of the Biden administration’s broader student loan forgiveness plan, deeming it “very unfair.” Florida offers two state-specific student loan relief programs for nurses and lawyers.
In September 2022, Governor DeSantis joined 21 other Republican governors in signing a letter urging President Biden to withdraw his student loan plan. During his campaign, DeSantis proposed holding universities accountable for students unable to repay their loans.
State Breakdown: Texas
Texas, another state with a red trifecta, has 63,730 eligible borrowers for debt relief under Biden’s $39 billion forgiveness plan, totaling $3,091.80 million.
Texas offers nine student loan forgiveness programs targeting specific professions, including nurses, doctors, legal aid attorneys, teachers, and employees in the state attorney general’s office.
Republican lawmakers in the Texas state legislature have introduced several bills during the current session, aiming to expand existing policies and create new programs for math and science teachers, attorneys in rural areas, mental health professionals, and other workers.
For a comprehensive breakdown from the Department of Education, click here.
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