By Leada Gore,The Associated Press
More than 31% of Alabama residents who owe federal student loans would see that debt wiped out if the Biden administration moves forward with $10,000 in loan forgiveness, according to a new analysis.
An analysis by Lending Tree showed 1 in 3 borrowers nationwide could see all their federal student loans wiped away and an additional 20% of borrowers would have their balances cut by at least a half. The highest percentage was in Wyoming, where 38% would discharge all their federal student dent, followed by Nevada (36.6%) and Utah (36.4%).
Nationally, the $10,000 forgiveness plan would amount to $326.4 billion.
The analysis shows 31.5% of Alabamians with federal student loans – roughly 187,397 people – would have their debt cleared if the Biden plan proceeds.
“For deeply indebted borrowers, the impact might be minimal, but it could potentially free others — one in three eligible borrowers, in fact — from all their federal student debt,” the nationwide study states. “The difference lies in how much debt each borrower carries and what kind of student loans they have.”
Roughly 7% of all federal borrowers owe more than $100,000 in student loans. And, while direct federal loans are the most popular type, other federal student loans, such as FFEL and Perkins loan, as well as private student loans, would remain due in full, the analysis points out.
Direct federal loans would the only type covered by the emergency forbearance passed in response to the COVID-19 pandemic. Delays in payments have been extended six times with the most recent deadline of Aug. 31 just weeks away.
