Nearly 9 percent of Utah residents will benefit from student loan forgiveness

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Published Sunday, September 25, 2022
by Kim Jarrett

(The Center Square) - Nearly 9 percent of Utah residents will receive student loan forgiveness under a plan introduced by President Joe Biden.

Biden announced he would forgive $10,000 in student debt to people who make less than $125,000 or couples who make less than $250,000 in 2020 or 2021. Borrowers who received a Pell Grant would be forgiven $20,000.

According to a fact sheet released by the White House this week, 282,700 Utahns will receive $10,000 in forgiveness, or 8.6 percent of the total population, based on numbers from the U.S. Census Bureau. Of those 282,700, 206,300 will receive $20,000 because they were Pell Grant recipients.

Utahns had $324,280 in student loan debt in 2021, according to the Federal Reserve Bank of New York.

The Biden administration hailed the plan as a way to narrow what is called the "racial wealth gap."

"Nearly 90 percent 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 percent of incomes in the United States," the administration said in its fact sheet.

Student loan payments were paused during the pandemic. Biden extended the payment moratorium until January of 2023.

Republicans have opposed the forgiveness plan. Utah Governor Spencer Cox co-authored a letter to the Biden administration with 21 other Republican governors.

"Only 16-17 percent of Americans have federal student loan debt, and yet, your plan will require their debts be redistributed and paid by the vast majority of taxpayers," the governors wrote in their letter. "Shifting the burden of debt from the wealthy to working Americans has a regressive impact that harms lower income families. Borrowers with the most debt, such as $50,000 or more, almost exclusively have graduate degrees, meaning hourly workers will pay off the master's and doctorate degrees of high salaried lawyers, doctors, and professors."

Members of Utah's congressional delegation also opposed the plan. Republican Rep. Burgess Owens called it "unconstitutional."

"Every person who agreed to a student loan did so with the full and transparent commitment to pay the money back," Owens said. "Transferring that debt to hardworking families and creating an offramp for responsibility is deceiving public policy with abysmal economic implications. It's also a slap in the face to millions of Americans who worked hard to pay off their loans."

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