By Senator Lena C. Taylor
The ink wasn’t even dry on my column last week, when the U.S. Department of Education made a major change to the student loan forgiveness eligibility rules. Shortly after pressing send, my email was flooded with stories about the six Republican controlled states that were suing the Biden administration to stop their plan to provide millions of Americans student loan debt relief. In case you were wondering, the states joining in on the Arkansas lawsuit are Iowa, Kansas, Missouri, Nebraska and South Carolina.
Just to recap, President Biden’s forgiveness program would cancel $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income, and $20,000 for those who received Pell Grants.
Under Biden’s initial plan, roughly 95% of Iowans holding student loan debt would have been eligible for some type of relief. In Arkansas, the plan would have helped over 350,000 of their residents. Further, the Springfield News-Leader reported that “The Show-Me State is home to 833,400 student borrowers, according to 2022 data from the Education Data Initiative, roughly equivalent to 13.5% of total residents. They hold a cumulative $29.5 billion in loan debt, and the average debt per borrower in the state sits at $35,397. So, you have to ask why would Republicans push back on Biden’s plan?
A sticking point surrounds who technically owns some of this debt and who would stand to lose money. Four million borrowers have what is known as Federal Family Education Loans (FFEL), which are privately held loans. If the debt were forgiven on these loans, banks/businesses would bear the brunt of the loss. Perkins loans also present a problem for debt forgiveness. The Biden administration decided to get out in front of the lawsuit and recently announced that borrowers with some FFEL and Perkins loans will no longer be eligible for debt cancellation. But if you have these loans, you know that they also were ineligible for the pandemic student loan payment pause, as well.
Many observers note that Republicans reasons for the pushback included complaints about harm to the state coffers, executive overreach, and some even talked about the harm caused by a tax liability that could accompany the amount forgiven.
However, the divisive and typical “us against them” Republican rhetoric could not be missed either. Arkansas Attorney General Leslie Rutledge said in an interview that “It’s patently unfair to saddle hard-working Americans with the loan debt of those who chose to go to college”. I guess folks who go to college are not “hard-working”. We have to get away from the narrative that there are losers and winners, when we help our fellow Americans.
To keep up with the changes, visit https://www.ed.gov/. You can also sign up to be notified when the student loan debt cancellation process has officially opened, at https://www.ed.gov/subscriptions. You’ll have until Dec. 31, 2023 to apply, if nothing else changes.