The Biden administration is expected to forgive over $300 million worth of student loan debt for thousands of borrowers in Connecticut.
Following the Supreme Court’s recent decision to strike down President Joe Biden’s ambitious student loan relief plan, the administration announced recently implementation of a plan to forgive student loans on a much smaller scale in an effort to deliver one of the president’s campaign promises.
The new plan comes through the Biden-Harris administration’s fixes to the income-driven repayment plans, which has resulted in an adjusted count of the number of monthly payments borrowers who have had loans for 20 or 25 years have made that qualify toward loan forgiveness.
This will result in over 800,000 borrowers nationwide receiving a total of $39 billion in debt relief.
The administration also released a state-by-state breakdown which projects 7,230 Connecticut residents will receive more than $309 million in debt relief.
“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” said U.S. Secretary of Education Miguel Cardona in a press release. “By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve, just as we have done for public servants, students who were cheated by their colleges, and borrowers with permanent disabilities, including veterans. This Administration will not stop fighting to level the playing field in higher education.”
According to a 2022 report from the Office of Fiscal Analysis and Office of Legislative Research, 15% of Connecticut residents have student loans, with over 500,000 borrowers possessing an average loan debt of $35,681 each. This equates to a total of around $19.3 billion of student loan debt.
Connecticut ranks fifth in the nation for largest debt among the undergraduate class of 2020 — averaging around $35,853.
Connecticut’s local government has also done some work in trying to bring aid to the thousands of borrowers that reside in the state. As part of this year’s state budget, $12 million has been set aside for two years for the implementation of a pilot program that will reimburse qualified residents up to $20,000 for student loan repayments, or $5,000 per year for four years.
To qualify for this state sponsored relief, candidates must be current Connecticut residents, have lived in the state for the past five years, attended a vocational school or college in Connecticut, have an annual income under $125,000 for an individual and $175,000 for couples, and complete 50 hours of community service.
“This program hits states like Connecticut….harder than other states because we have one of the highest percentages of people with college and graduate degrees,” said Lt. Gov. Susan Bysiewicz. “The higher the education attainment, the harder we’re hit by this decision because we are an education economy.”
“It will mean that it will help over 7,000 people be able to invest in buying a new home, invest in their kid’s education. There are so many things that those student debtors would get from being able to put their money elsewhere,” she added.
“Receiving student loan relief would not only help my family financially, but also emotionally,” said David Cao, a recent UConn graduate who now works as a paraeducator at Windsor High School. “Being one of five children who have all gone through college, taking student loans was a necessity even with both parents working long hours…. receiving forgiveness on student loans, even if it was a small fraction, would be a tremendous help.”
About 321,000 Connecticut residents applied for aid under Biden’s previous student loan forgiveness program. Of that number, 208,000 had been fully approved to have their debts discharged.