In late August, President Biden announced a sweeping student loan forgiveness plan that would erase up to $20,000 of debt for many borrowers. To learn more about how this debt forgiveness plan will impact Coloradans, KUNC’s Yoselin Meza Miranda spoke with Jason Gonzales from Chalkbeat Colorado. Gonzales reports on higher education and has been covering the student debt crisis.
KUNC: Jason, can you recap for us the details of Biden’s announcement?
GONZALES: Yeah. So, like you said, it's going to be $10,000 in student loan debt relief for people that earn less than $125,000 a year and less than $250,000 for joint filers. The administration will also cancel another additional $10,000 for graduates who had Pell Grants and were low-income at the time.
It's expected that about 43 million borrowers nationwide will likely benefit from this. Although it's unclear at this point how the Biden administration is going to roll this out and make this accessible for student loan borrowers.
KUNC: Here in Colorado it's estimated that more than 770,000 residents have student loan debt totaling about 29 billion dollars. You’ve reported for Chalkbeat on how crippling student debt can be for people of all ages and backgrounds in our state. What have you been hearing this week from people in response to the debt relief plan?
GONZALES: For some students, it's going to be life changing. For some students, it's going to be a drop in the bucket. You know, there are students out there who might have less than $20,000 of student loan debt. And, you know, this means that they can now think about long term savings, buying a house or just, you know, even the mental health aspect of having that debt hang over your head for years when you've been trying to pay that off.
But I've also talked to Coloradans who have $150,000 to $300,000 debt. And that's not a case of irresponsibility on their part. They might have come from backgrounds where they needed more to get through college. They maybe couldn't work during that time. They might have had to support family.
So for those that have that high of debt, this really isn't going to help them that much.
KUNC: You’ve been reporting on how student loan debt and loan forgiveness can impact borrowers of color differently than white borrowers. Can you tell me a little more?
GONZALES: Student loan borrowers who are Black and Hispanic have higher overall debt averages than those who are white. So this doesn't go as far for some of those students who are Black and Hispanic.
Although the Biden administration has really talked about equity and providing relief — and that's why those Pell Grant recipients are going to get more money overall — this doesn't really get into how much some of those students might have, especially when they've taken out more overall to get through and finish college.
KUNC: You cited a statistic in an article last week that said half of all Colorado students graduating college in 2020 held debt. What are some of the factors that are keeping this student debt crisis going?
GONZALES: At one point, Colorado was paying about 70% of all costs for students, and now it's shifted to where students are paying about 70% of the costs for higher education overall. So the burden is more on the student than it's ever been.
The question is, how is the Biden administration going to invest in those colleges that serve Black students and Hispanic students? But also, how are states and how are state lawmakers going to really look at how they can reinvest into higher education so the cost goes down for students overall? And until we get to that point where the state takes more of the burden once again, we're likely going to be having this conversation into the future.
Find reporting from Jason Gonzales and his coverage of the student debt crisis at https://co.chalkbeat.org/
This story was produced by KUNC’s Maxine Speier.
