(The Center Square) – As Pennsylvania higher education institutions face a shortage of students, their former students will disproportionately benefit from student loan forgiveness.
A research brief from the Independent Fiscal Office estimates that almost two million Pennsylvania borrowers hold $69 billion student loan debt, and $21 billion would be forgiven. Another $1.8 billion would be forgiven through the expansion of the income-driven repayment program.
The commonwealth stands out in having more student debt than other states. Pennsylvania ranks 6th in total loan balances, the report noted, and 21st in average balance ($35,300).
Nationally, the report estimates about $469 billion in loans will be forgiven. However, costs could go up if income-driven repayment is expanded. IDR caps a borrower’s monthly payments related to their income and results in loan forgiveness after 20 to 25 years.
While Pennsylvania would see a significant percentage of loan debt forgiven, the benefits favor the middle and upper classes. About 65 percent of loan forgiveness benefits would go to borrowers earning more than $51,000.
The pause on student loan repayments, delayed for the seventh time, will cost the federal government $155 billion and is “extremely regressive,” according to the Committee for a Responsible Federal Budget, with the benefits going to the wealthy.
“The pause disproportionately benefits borrowers in higher-paid professions because people in those professions tend to borrow more,” the CRFB noted.
While student debt in Pennsylvania runs higher than in other states, the bigger issue for the state’s higher education system is attracting students, as The Center Square previously reported.
The State System of Higher Education has lost more than 20 percent of its students compared to a decade ago and combined institutions in response. In the latest state budget, it saw a significant funding increase to support a plan to attract more students and shore up the system.
Anthony Hennen is a reporter for The Center Square. Previously, he worked for Philadelphia Weekly and the James G. Martin Center for Academic Renewal. He is managing editor of Expatalachians, a journalism project focused on the Appalachian region.
This article was republished with permission from The Center Square.
Well, lets be honest, the “forgiveness” is the college loan debt forgiven by the U.S, tax sucker, I MEAN PAYER…without our permission, (memba’ “we the people?”), to do so. That debt still will exist.. Just keep adding it to our clown world tab!
Better would be an article discussing the legality of this student loan debt forgiveness. it should be done (fi done at all) by congressional legislation. The Executive branch’s authority to do so does not exist in my opinion.
Loan forgiveness is in the great American tradition of the the GI bill and the 2008 bank bailout. Perhaps we could pay for it by revoking the oil coal and gas annual subsidy of 50 billion each year. Just a thought.
GI Bill did not include loans – monies expended were grants, and authorized in the enabling legislation. The 2008 bank bailout was also codified in legislation. The student debt forgiveness needs legal authorization. Forgiving debt as proposed is effectively spending taxpayers dollars without the required authorization of congress. Propose the bill that will enable this to be done legally and compel all of those talking heads from Congress who show up on Sunday shows to actually vote it up or down.
They will vote the way they are “told” to vote. OR ELSE.
I think you you make very good points. I haven’t seen any Republican policy proposals like that, or any proposals at all. It would be good to challenge each representative to to take a vote. Even better to address the root causes of these high tuitions. Is there Republican legislation that I am unaware of?
No, it isn’t.
The GI Bill rewards the largely working class people who risked their lives to join the military.
Not spoiled brats who don’t want to pay their debts.
Having three recent college graduates the past three years, none of whom are in high paying fields, I do believe that, as a country we need to be more creative in how we can help these recent graduates afford this incredibly expensive world we live in. My oldest son who is 26 and entering his fourth year as a suburban school teacher will make about $54,000 this year. He is married, had his first child this year and his wife works part time and his home in their two bedroom apartment.
They have no car payments, and his student loan payments start in October. They can barely pay their bills, savings is impossible and receive about $400 per month from his parents and grandmother to make things work. They see no way they will ever afford their own house someday without a significant contribution from their parents. Sadly, this is what millions of younger couples are facing that are not making a lot of money. Perhaps, we can have FAFSA government loan system where these loans are interest free for ten years and maybe there is a slight reduction each year for keeping up with your payments. Remember that FAFSA loans only pay a part of your college education. We give massive tax breaks to real estate companies, oil companies, billions in farm subsidies and massive tax breaks from state governments when they try to lure companies to their states. So, we the people, are subsidizing all of these billions of dollars in giveaways to the wealthiest corporations including a recent 40% reduction in federal taxes for the richest companies in the world that didn’t even need these tax breaks. So I do believe that we can creatively, help in some way, our younger generation cope with their overwhelming bills.
Your kids should’ve been more responsible.
I make way less than them and couldn’t afford to go to college. I’m not paying a penny to them.
Also, your son falls into exactly who the article described as high earners. $51K a year is plenty.