DENVER — After months of internal debate, President Joe Biden is expected to announce $10,000 in student loan forgiveness for borrowers making less than $125,000 per year, according to the Associated Press. An extension on the pause on payments to January is also expected to be announced.
According to the Education Data Initiative, there are 774,000 student loan borrowers in Colorado, owing a little less than $37,000 each on average. In total, Colorado borrowers owe $28.5 billion in student loans. Research from Student Loan Hero shows that nearly a third of borrowers in the state would have their entire student loan debt eliminated with $10,000 of forgiveness.
“Of the ones left over, a little bit less than a third of the amount they owe would be leftover on average,” said Jacob Channel, senior economist at Student Loan Hero. “So, in that regard, I think that the economic impact is frankly kind of hard to overstate.”
Behind those numbers and dollar signs are real people — students and former students — whose opinions on student loan forgiveness vary as much as their areas of study. Caleb Silver, editor in chief of Investopedia, said while some have pushed the president for more forgiveness, the reported plan would still make a big difference for many borrowers.
“For those students or families that still owe student loans, the forgiveness of loans, even up to $10,000, will be very significant,” Silver said. “On the other hand, there’s a lot of Americans and American families that have paid back their loans, that have been paying back their loans for years. They probably don’t see this as being very fair.”
Earlier this year, Denver7 went 360 on the topic of student loan forgiveness to hear from Coloradans of various perspectives on this debate. You can read and watch some of their responses here.
Kyle Southern, associate vice president at the Institute for College Access and Success, said there are still many questions about how this reported forgiveness will work, particularly in regards to the reported income cap of $125,000. He said he hopes an announcement from the president will include more clarity on these important details. Whatever the details end up including, he said, a broader discussion of the costs of higher education and systemic inequality are needed.
“I think it's really important to think about this issue in terms of racial justice and record racial equity,” Southern said. “We know that because the average white household has wealth about ten times the average Black household, we know that because of the way that wage discrimination works in the labor force, more people of color have taken on more and more student debt. And so, at every level, we find how that makes it even more difficult to achieve financial stability and to start to grow wealth.”
Read President Biden's announcement.