365,600 Arkansans can get a break on student loans under the Biden plan
More than 350,000 Arkansans are eligible for at least some student loan debt forgiveness under a plan announced last month by President Joe Biden, according to state-by-state data released by the U.S. Department of Health on Tuesday. Education and the White House.
On the same day as the update, U.S. Sen. Tom Cotton, R-Ark., announced a bill that would require colleges to vouch for up to 50% of future federal student loans and 25 college vouchers. % of value of future defaults. loans.
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Cotton is among critics of Biden’s plan to cancel student loans, which the president announced Aug. 24.
According to federal government estimates released on Tuesday, 365,600 Arkansans would be eligible for assistance of up to $10,000, while 269,000 would be eligible for assistance of up to $20,000 because they were recipients of the grant. Pel.
Pell Grants are usually awarded by the United States Department of Education to undergraduate students with exceptional financial need who generally do not require repayment. People earning less than $125,000 a year are eligible, and nationwide nearly 90% of relief funds will go to those earning less than $75,000 a year.
That 365,600 figure “seems reasonable,” said Tony Williams, director of the Arkansas Student Loan Authority, a division of the Arkansas Department of Commerce. “It’s hard to say exactly which is accurate, but that number looks good.”
Williams estimates that 125,000 to 130,000 people in Arkansas have student debt of $10,000 or less, so they would have all of their student loan debt wiped out under the Biden plan.
Nationally, more than 43 million people have federal student loan debt in the United States, with an average debt of about $37,000 per borrower, according to the Education Data Initiative, a group that provides research and resources on higher education in the United States. Outstanding federal loan balance is approximately $1.6 trillion in the United States
“Overall, there is over $13 billion in student debt in Arkansas,” with borrowers averaging $33,000 in student debt, Williams said last month. “Students borrow about $600 million in federal loans in Arkansas each year.”
Of the 3,845 graduates of the University of Arkansas, Fayetteville Class of 2021, 1,750 students, or 46%, used federal loans, with an average amount borrowed of $20,961, according to the university. UA is by far the largest school in the state, with an estimated fall enrollment of nearly 31,000 this year.
Since Biden announced his plan last month, “we’ve had a higher than normal volume of calls asking for a loan forgiveness, but we have limited information we can share,” Williams said. “We have a pretty good understanding of what the plan will entail, but we don’t know all the details, so we’re asking people to be patient.”
The U.S. Department of Education said Tuesday it would release “in the coming weeks” additional details on how individuals across the country can benefit from the administration’s student debt relief plan, pointing to a website – StudentAid.gov/debtrelief – which would have more information.
Up to 8 million borrowers may be eligible to automatically receive relief because relevant income data is already available to the US Department of Education.
Others will need to apply, and the application page should go live early next month, according to the US Department of Education. To be notified when the application is open, the federal agency asked people to register online at https://www.ed.gov/subscriptions.
Once a borrower completes the application, they can expect relief within four to six weeks, and borrowers are encouraged to apply by November 15 in order to receive relief before the loan break expires. current payment at the end of this year, according to the US Department. education. However, the US Department of Education said it will continue to process applications as they come in, even after the break expires on December 31.
Borrowers who have elected to continue making payments during the current pause can also request refunds, according to the US Department of Education. Borrowers can get a refund without even asking if their payments have brought their loan balance below the maximum debt relief amount – $10,000 for all borrowers, $20,000 for debt relief recipients. Pell grant – and they can check their balance through their studentaid.gov account.
Those with debts above these thresholds, as well as those who have fully paid off their debts during the break, can request repayments by calling their specific loan providers and are encouraged to do so by December 31, according to the Ministry of Health. ‘Education. The Student Aid Accounts Dashboards contain this information for those who are unsure of their loan providers.
Cotton released information on its 2022 Student Loan Reform Act on Tuesday.
The bill would require any university — excluding religious and medical colleges — charging more than $20,000 a year for undergraduate tuition to phase out 50% of their administrative staff to qualify for future loans. students, according to a press release from the senator’s office.
The bill would penalize universities up to 25% of a borrower’s loan for each of their students who fail to repay their student loans, impose a 20% luxury tax on annual undergraduate tuition above $40,000 — again, excluding religious and medical colleges — with funds raised being used for workforce training, and requiring universities to “implement admissions policies and hiring practices that protect political and ideological diversity on campus,” among other stipulations.
“America has a student loan problem, but it’s not the problem Joe Biden wants you to believe. The real problem with student debt today is that the cost of tuition has skyrocketed, but the value of a college degree has plummeted,” Cotton said in a statement.
“What’s worse is that the federal government has created this problem by writing blank checks to colleges, with little effort to control the cost or quality of higher education. My College Reform Act of 2022 student loans would end this academic golden age, reduce tuition, and give colleges a much-needed reality check.”
The full text of the bill is available online at https://bit.ly/3UrYhDV.
Some higher education officials said they needed more time to review Cotton’s proposal to provide detailed feedback.
“We haven’t had time to fully review [Cotton’s] proposed bill,” but the University of Arkansas system “is proud and committed to keeping tuition as affordable and accessible to everyone as possible,” said Nate Hinkel, director of communications for the UA system.
UA-Fayetteville, the state’s largest public university, expressed a similar sentiment.
“[We] haven’t had time yet to review the details or consider possible unintended impacts” of the bill, said Mark Rushing, associate vice chancellor, academic relations, at UA-Fayetteville.