How does Biden’s student loan plan forgiveness affect Illinois borrowers? What to know
The White House has not yet announced an official decision regarding student loan forgiveness as of Tuesday afternoon, but the Washington Post reports the administration is likely to forgive $10,000 in federal loans per eligible borrower.
The forgiveness may be limited to borrowers who make less than $125,000 or $150,000 per year, or joint-filers making under $250,000 or $300,000, according to previous White House discussions reported on by the Washington Post. Privately managed federal and private student loans will likely be exempt from forgiveness.
U.S. Education Secretary Miguel Cardona said on NBC’s Meet the Press Sunday the official federal student loan announcement would come out “within the next week or so.”
A June study from online lending firm LendingTree found a third of U.S. borrowers could see all their federal loans forgiven under a $10,000 plan, with an additional 21% clearing at least half their balances. The LendingTree article cited U.S. Department of Education data, which are current as of Dec. 31, 2021.
More than 7% of the nation’s borrowers owe at least $100,000 in federal student loans, and Illinois ranked 8th in the country for the number of borrowers owing $100,000. LendingTree said 8.5% of Illinois borrowers owe at least $100,000 in federal student loans, or 130,069 individuals.
The state ranked 37th in the nation for how much borrowers will benefit from forgiveness, as 31.3% of people are likely to be forgiven of all their federal student loans. Nearly 480,000 Illinois borrowers fall into that category, but many others will remain saddled with federal loans.
From 2019 to 2020, 57% of Illinois college graduates had student loan debt, according to The Institute for College Access & Success, a nonprofit organization. TICAS said the average debt load for Illinois graduates was $28,552, more than twice what the U.S. Department of Education is expected to forgive.
While most Illinois college graduates have federal loans, 22% of the student debt in the state was non-federal debt, the TICAS report said. The study also said 10% of Illinois college graduates had private student debt, with an average burden of $32,338.
A list of average graduate debt for several public and private Illinois colleges is available from TICAS.
Does the state of Illinois offer any forgiveness?
Illinois borrowers in certain professions are eligible for existing state forgiveness programs, such as the Illinois Teachers Loan Repayment Program and Nurse Educator Loan Repayment Program.
These field-specific programs are administered by the Illinois Student Assistance Commission, an official agency of the state government.
Application requirements vary by program. Those applying for the Illinois Teachers Loan Repayment Program must meet all the following qualifications to be eligible:
U.S. citizen or eligible non-resident
Resident of Illinois
Be a borrower who has had an amount of their educational loans forgiven under federal programs
Have a balance remaining on eligible student loans
Have fulfilled a five-year teaching obligation in an Illinois elementary or secondary institution designated as a low-income school
Information about more Illinois loan forgiveness programs is available online.
This story was originally published August 23, 2022 at 3:37 PM.
