White House: 920K Minnesotans, Dakotans would benefit from $14.5B in student loan forgiveness
Data released by the Biden administration indicates as many as 42.3 million borrowers could have a total of $685 billion in student loans forgiven, assuming all eligible borrowers receive the full amount.
WASHINGTON — More than 900,000 borrowers in Minnesota and the Dakotas could benefit from roughly $14.5 billion in student loan forgiveness before the year’s end, according to new data released by the White House.
In a Tuesday, Sept. 20, news conference, lawmakers and government officials outlined more specific details on how many Americans could be affected by President Joe Biden’s loan forgiveness initiative, which would provide up to $10,000 in forgiveness to non-Pell Grant recipients and double that to those who received a Pell Grant.
According to data provided in the news conference, nearly 730,000 Minnesotans — roughly 13% of the state’s population — would see relief, over half of whom received a Pell grant. Nearly 82,000 borrowers in North Dakota and 110,000 in South Dakotan would be eligible for forgiveness, 60% of whom also received Pell grants.
Combining the three states, and assuming all eligible borrowers were granted forgiveness, 920,800 borrowers could see an estimated $14.5 billion in forgiveness. That figure serves as just a fraction of the $685 billion in potential forgiveness possible across 42.3 million borrowers — 20 million of whom would have their balance owed completely forgiven.
An August report published by the Wharton School of the University of Pennsylvania estimated the actual cost at approximately $300 billion, as not all borrowers will receive the full amount available to them.
Selecting a state below will show the number of eligible borrowers and amount of possible forgiveness.
Who is eligible for forgiveness?
While only individuals making $125,000 or less will be eligible for student loan forgiveness, the majority of forgiveness will benefit individuals earning under $75,000 annually.
“Nearly 90% of relief dollars will go to those earning less than $75,000 per year — and no relief will go to any individual or household in the top 5% of incomes in the United States,” a fact sheet released by the White House reads.
The fact sheet adds that by targeting relief to borrowers with the highest economic needs, the racial wealth gap will be narrowed, as nearly 71% of Black undergraduate borrowers and 65% of Latino undergraduate borrowers are Pell grant recipients.
Officials expect forgiveness issued by year’s end
Though Biden’s initial announcement of his student loan forgiveness plan came in August, many Americans have questioned when relief may finally reach them.
Carmel Martin, White House deputy assistant to the President for economic mobility, said that currently, the Biden administration plans to have a “simple” application form available online by early October, with relief hitting Americans’ loan accounts before the year’s end.
Though potential legal challenges from state officials and other parties have led to speculation that Biden’s loan forgiveness initiative would fail in the courts, James Kvaal, under secretary of the Department of Education, said Education Secretary Miguel Cardona is “quite confident” the initiative will carry on.
“The secretary has clear authority to protect borrowers from financial harm resulting from the pandemic, and we’re quite confident that we have the authority to carry out this task,” Kvaal said.
Officials said the eligible borrowers should keep their eyes on the official Federal Student Aid website for any additional information.