Student Loans Forgiveness
77,065 State Students Eligible
Source: CT Mirror, Education Data Initiative, Experian
President Joe Biden announced on Wednesday he’ll forgive $10,000 in federal student loan debt for those who make a certain income — and $20,000 for Pell Grant recipients — as well as extend the pause on loan repayments, providing relief for thousands of borrowers in Connecticut. Most recipients are from families who earn less than $60,000 a year and require greater financial assistance to attend school.
In Connecticut, 13.8% of its residents have student loan debt. There are 497,700 borrowers that have about $17.5 billion in student debt, according to the Education Data Initiative. The average debt for borrowers in the state is $35,162, with more than half of borrowers under the age of 35.
There are eligibility restrictions based on income. It will apply to individuals who earned less than $125,000 a year during the pandemic, or under $250,000 for married couples who jointly file taxes.
Biden said his administration will also extend the freeze on student loan repayments and interest accrual for another four months, until December 31st. The moratorium has been in place since the beginning of the pandemic in March 2020 and was poised to lift at the end of this month. Wednesday’s decision is the fifth and final extension.
Students who have undergraduate school loans can cap their repayments at 5% of their monthly income, which is half of the rate of most current plans.
More than 45 million people across the U.S. hold a total of about $1.6 trillion in student loan debt. However, even for those who are eligible for loan forgiveness, it would only be a fraction of what they still owe.
The U.S. Department of Education said the application to receive this relief will be available some time before the federal student loan repayments resume in January 2023, the relief won’t be treated as taxable income.
Some members of Connecticut’s congressional delegation have been working on the issue of addressing student loan debt for years. Rep. Joe Courtney, D-2nd District, has a bill that would allow borrowers who have public student loans to refinance them to an interest rate of 0% through the end of 2024.
“I have heard from constituents who cannot afford to buy homes, start families, or buy their basic necessities because of crushing student loan debt, and that is why I have called on the president to take this action,” Rep. John Larson, D-1st District, said in a statement. He’s a co-sponsor of Courtney’s bill.
Connecticut residents have an average student loan debt notably higher than the national average, according to the Education Data Initiative:
Pledge to Advance Connecticut (PACT) was established by the legislature in 2019 to provide free tuition for students attending all twelve community colleges. PACT bridges the tuition gap students may have after receiving scholarships and other financial aid – and funds were allocated for this critical program in our new state budget.
PACT is a last-dollar scholarship, meaning grants cover any expenses remaining after students have exhausted federal, state and institutional financial aid opportunities. In fact, even students who have all their tuition and fees covered by financial aid are eligible for at least $250 per semester.
We are fulfilling our promise of tuition-free community college because everyone deserves a quality education that can put students on the path to success.
Funds for this academic year were closed on July 15th 2022, but 2022-2023 graduates should add this information to their college planning. Don’t delay! Funds are available on a first come, first served basis.
To qualify for PACT, applicants must meet the following requirements:
- Be a graduate of a public or private Connecticut high school (GED and home-schooled students qualify).
- Be a first-time college student (those who participated in dual enrollment programs while in high school are not excluded).
- Complete the FAFSA and accept all awards.
- Attend community college full-time (12 or more credits per semester).
- Enroll in classes for first come, first served consideration.
- Participate in a degree or credit-bearing certificate program.
- Once enrolled, remain in good academic standing.
Students from all financial backgrounds are eligible.
For more information, click here:
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