Student loan borrowers at a rally in front of The White House on Aug. 25, 2022. (Photo by Paul Morigi/Getty Images for We the 45m)
More than two-thirds of Nevadans eligible for student debt relief are Pell Grant recipients, according to estimates released by The White House.
President Joe Biden, who had faced calls by Democratic lawmakers and policy groups to address the student debt crisis, announced late August he will cancel up to $20,000 in federal student debt for Pell Grant borrowers and up to $10,000 for individuals earning less than $125,000 a year, or $250,000 as a household.
The Biden-Harris Administration released a statewide breakdown Tuesday of those who could benefit from student loan forgiveness that estimated 315,800 borrowers in Nevada could be eligible. Of those, 216,900 are Pell Grant recipients.
During a press call to highlight the numbers, Massachusetts Democratic Rep. Ayanna Pressley called relief, in particular the Pell Grant component, “a racial justice issue.”
“By canceling $20,000 in student debt for our Pell recipients, we really start to get into the racial justice component of this crisis,” she said. “Our Black and brown students have to borrow at much higher rates because of policies in this country that have historically denied our families the chance to build generational wealth.”
She called the steps taken by the administration a historic move that “will set those borrowers on a pathway to generational wealth and the promise of a stronger economic position for their children and our children’s children.”
Biden’s August announcement on student loans extended the pause on repayments, which have received several pauses since the start of the Covid-19 pandemic in 2020, until Dec. 31.
The plan also revamps income-driven repayment plans so borrowers no longer pay more than 5% of their income on undergraduate loans and guarantees no borrower earning less than 225% of the federal poverty level, which is equivalent to making $15 an hour, will have to make a monthly payment.
Applications for loan forgiveness are expected to be online starting in October.
An estimated 40 million borrowers nationwide could be eligible to benefit from the proposal and nearly 20 million are expected to have their remaining balances discharged.
The plan has a range of criticism from Republicans and even some Democrats, including U.S. Sen. Catherine Cortez Masto who told The Nevada Independent she didn’t agree with the action.
In a statement, U.S. Rep. Mark Amodei accused the administration of undermining voter intelligence, asking: “What lengths will this administration go to for a few votes?”
During the press call. U.S. Sen. Elizabeth Warren said this was about providing relief to middle class Americans. She added that whether she is at the store or at the airport, she comes across countless people with stories about being saddled with student debt.
“Many times somewhere in the middle of one of these stories someone starts to cry,” she said. “For those who aren’t dealing with student loan debt right now, it may be hard to see just how soul crushing this debt can be. People are frightened by what it means for their futures and ashamed of what it says about their pasts. Student debt is a burden they carry every single day.
Some conservative groups have warned they plan to launch lawsuits to challenge the decision.
James Kvaal, U.S. Under Secretary of Education, told reporters Tuesday they have looked at this issue from every angle: “We’re quite confident the (Secretary of Education) has the authority to carry this out.”
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