On Wednesday, President Joe Biden unveiled a proposal that would cancel up to $20,000 in federal student loan debt. This plan will benefit thousands of students in Michigan.
Single borrowers who make less than $125,000 and married borrowers who file taxes jointly and make less than $250,000 are eligible for the $10,000 debt cancellation. Individuals who received a Pell Grant may qualify for an additional $10,000 debt cancellation.
Federal loans taken out prior to June 30, 2022, are the only ones that qualify for forgiveness.
“Here’s what my administration is going to do to provide more breathing room for people so they are less burdened by student debt,” Biden said during an Aug. 24 press briefing.
Melanie Mulder, the assistant director of financial aid, encourages students and alumni to visit the official federal website for loan forgiveness for detailed information about eligibility. To find out if a student has received a Pell Grant, select the Pell Grant tab on the federal website’s dashboard.
College Factual states that an average of 66% of incoming Ferris freshman take out at least one loan. U.S. News reports that the “median federal loan debt among borrowers who completed their undergraduate degree [at Ferris] is $21,491.” In the year 2020, 73% of Ferris’ graduating seniors had borrowed either federal or private loans during their undergraduate years.
According to federal data, Michigan has 1.4 million borrowers with student loan debt, totaling $51.3 billion. According to Gov. Gretchen Whitmer’s administration, about 700,000 people who have federal student loans will have their debt reduced in half or eliminated entirely.
“People can utilize their money to establish a business, a home, a family or a marriage,” Whitmer said. “I would work with anyone to maintain lowering the cost of higher education and giving more paths for Michiganders to pursue a higher education tuition-free, without entering into debt in the first place.”
After eight extensions, federal student loan payments have been suspended for a total of two years. Each extension increased the pressure placed on Biden to act and address the $1.7 trillion student debt crisis. On Aug. 31, the current payment suspension was supposed to end, but it has now been extended to Dec. 31.
According to federal data, nearly 238,000 Michigan borrowers have debts totaling less than $10,000, and nearly 425,000 Michigan borrowers have debts totaling less than $20,000. These borrowers carry around 12% of the state’s total student debt, and they collectively represent half of the state’s student borrowers.
According to the White House, nearly eight million Americans will automatically be relieved of their college debt. The U.S. Department of Education anticipates releasing an application for the remaining borrowers in the upcoming weeks.
Low and middle-income borrowers will incur less expense as a result of the recently announced adjustments to income-driven repayment arrangements.
Ferris State students may be in luck. As many students aren’t sure how they can pay for college Biden’s proposed plan would help a lot of us in the future. For more financial aid resources, visit the “Need More Money” tab on ferris.edu/finaid.