The White House announced this week that college graduates nationwide who received the Pell Grant might qualify for $20,000 in student loan forgiveness, and non-Pell Grant recipients may qualify for a $10,000 reduction in the amount they owe on student loans.
Past and current undergraduate students would qualify for the loan forgiveness, according to the press release. If a student were classified as dependent, their parent’s income would be considered.
A former Texas State University student, A’Naiya Vavis, told the Texas Tribune that with $20,000 in loan dismissal, the remainder of her student debt would be canceled.
“I’m very stunned and shocked. I didn’t expect to not have any student debt until at least my 30s just because of where I live and the high cost of living. Trying to budget for student loans has always been stressful. And now to have that off my plate is a big relief,” Vavis said.
The new White House plan also extended the pause on federal student loan payments until December 31, 2022. Payments were expected to resume in January 2023.
Texan Zach Wagner told CBS DWF he is not in favor of the forgiveness plan.
“Just grind hard in high school and go wherever it pays you the most to go,” he said. “Where is it coming from, right? The stimulus bill, 2020, all of that stuff added up, and now we are where we are. Why more? You know what I mean?”
U.S. taxpayers will assume the burden of the unpaid debt.
Texas residents who spoke to KVUE about President Biden’s plan had mixed feelings. While some would like to see more forgiveness, others felt the plan was unfair to some borrowers.
The U.S. Department of Education has estimated that around 8 million borrowers would automatically receive loan forgiveness. For those that will not automatically qualify, the Department will set up a way for borrowers to apply.
The plan will lower the loan debt for around 43 million borrowers, according to the White House press release. About 27 million of those borrowers received the Pell Grant.
Income-driven repayment options for undergraduate loans would also change. Payment amounts would be capped at 5% of a borrower’s discretionary income. In addition, improvements would be made to the Public Service Loan Forgiveness.
Students must meet income requirements to qualify. Individuals must have an income of less than $125,000, and married couples must earn $250,000 or less.
Not all Texans who can benefit from the Pell Grant have done so, according to a 2021 report from the National College Attainment Network. In Texas, there was $495,973,418 in unclaimed Pell Grant funds in 2021. States with similar unclaimed amounts included California ($561,300,185), New York ($205,135,415), and Florida ($304,321,657), according to the report.
