How Biden’s student loan forgiveness plan could impact local graduates

CHARLOTTE — President Joe Biden said Wednesday that many Americans can have up to $10,000 in federal student loan debt forgiven. That amount increases to $20,000 if they qualified for Pell grants.

The decision from the Biden Administration includes an extension to the pause on loan repayments prompted by the coronavirus pandemic until the end of the year.

People with loan debt who make more than $125,000 individually or $250,000 as a household are not eligible for the debt cancellation, according to authorities.

According to the Federal Student Aid office, nearly 8 million borrowers may be able to receive debt forgiveness automatically, because the Department of Education already has their information.

In the coming weeks, the Biden Administration is expected to launch an application for borrowers to provide their income information if they aren’t sure they qualify. The application will be available before the repayment pause ends on Dec. 31.

Current students are only eligible for forgiveness on loans that originated before July 1, 2022.

The director of financial aid at UNC Charlotte says he would like to see even more help for students.

“I think more funding from the state, more state grant funding, increasing the Pell Grant, I think all these grants combined,” Bruce Blackmon said. “I don’t think there’s one magic bullet to solve the problem.”

Impact for local graduates

In North Carolina, there are 1.3 million borrowers and date shows they owe an average of $38,000. In South Carolina, 730,000 people borrowed money to pay for college, they owe an average of $39,000.

Channel 9 looked into the average debt for graduates in the local area.

U. S. News and World Report found that the average federal loan debt for UNC-Charlotte graduates tops $22,000. Davidson College graduates leave with an average of $19,000.

Wingate University, Queens University and Belmont Abbey College alums accumulate about $25,000 in debt.

These debt averages are far below the national debt balance, which is more than $37,000.

To search specific data for other schools, click here.

Amanda Ray knows firsthand how important loan forgiveness can be for a college graduate.

She got her degree in 2009 from Appalachian State University where the median federal loan debt is about $20,000.

Ray recently paid her debt through a loan-forgiveness program.

“The amount of student loan debt that I had was a barrier because it would keep me from being able to apply for mortgages, car loans and things like that,” Ray said.

Kristen Swanson got two degrees from Caldwell Community College. She said she walked away with no debt but said the loan forgiveness will help her sister.

“She’s more worried about the stress because it’s still looming over her head like most debts do,” Swanson said.

Terry Penland was getting his fifth-grade class ready for next week at Hildebran Elementary School.

At one point, Penland said he had tens of thousands of dollars of student loan debt, but qualified for public service loan forgiveness. Penland believes Wednesday’s announcement will help others with student debt.

“When you’re carrying a debt that is half or more than your annual salary, many banks are going to refuse to give you loans for vehicles and things like that,” Penland told Channel 9.

Federal student loan numbers, state by state

Map courtesy of ABC7

Anticipating the debt relief announcement

Before Wednesday’s official announcement, Channel 9 spoke with people expecting the president’s action.

Preston Pierson is a Charlotte resident who is juggling being a new dad, managing a family business and paying tens of thousands of dollars in student loan debt at the same time.

Pierson has a master’s degree in marketing and says his financial responsibilities are piling up.

“I think I’m paying about $250 a month, and I have $43,000 left,” he said.

Pierson also believes the decision could impact future generations to come.

“It allows a lot of opportunity for thinking of different things for them, planning for their future, planning for their student loan debt,” Pierson said.

Mike Pierce with the Student Borrower Protection Center agrees with Pierson.

“Rising debt produces fewer homeowners and more credit card debt, jeopardizes secure retirements, and drives intergenerational debt,” he said.

While the student loan forgiveness plan could decrease debt significantly, those against the plan say the government should focus on the root of the problem.

“That’s what we really need to do -- make college affordable -- not send $10,000 to people who, in many cases, have advanced degrees,” said Marc Goldwein, the senior vice president and policy director for the Committee for a Responsible Federal Budget.

(WATCH BELOW: Biden to speak on plan to eliminate $10K in student debt for some borrowers)

Almiya White

Almiya White, wsoctv.com

Almiya White is a reporter for WSOC-TV