How many in Charlotte will qualify for student loan forgiveness? One NC expert weighs in
President Joe Biden announced on Wednesday that his administration will forgive $10,000 in accumulated federal student loan debt for most American borrowers.
He also said that up to $20,000 will be forgiven for Pell Grant recipients.
The plan includes an income cap of $125,000 for those seeking debt forgiveness. According to the United States Department of Education, married couples or heads of households making under $250,000 annually are also eligible.
Biden’s plan to eliminate student loan debt, or at least a portion of it, is a significant step forward for more than 48 million American borrowers across the nation.
Will Koster, a national student loan expert and certified financial planner with Spaugh Dameron Tenny in Charlotte, told The Charlotte Observer that millions of Americans will reap the benefits of Biden’s plan.
“It is estimated that about one-third of U.S. households will have their student loan debt completely forgiven,” Koster said. “The announcement specifically targets low to middle-income households with the implementation of income caps in order to receive the $10,000 or $20,000 forgiveness.”
But how many Charlotteans will stand to benefit from student loan forgiveness?
According to LendingTree, an online lending marketplace headquartered in Charlotte, North Carolina borrowers of federal and private student loans hold an average balance of $36,293, just a few hundred dollars short of the national average of $36,689.
For borrowers living in Mecklenburg County, however, that average lands somewhere around $37,600.
The Center for Responsible Lending says that there are 1.3 million borrowers in North Carolina who owe a collective amount of $48 billion, the Observer reported.
Biden’s plan will alleviate a large portion of debt for a significant amount of Charlotte-Mecklenburg residents, according to most recent U.S. Census Bureau data and criteria outlined by the U.S. Department of Education.
More than 47% of married couples in Charlotte have an annual income of less than $100,000, while nearly 82% of single workers in the city make less than $100,000 a year.
According to the U.S. Census Bureau, the median household income from 2016 to 2020 was $65,359 and the median income for non-families was $48,539.
“This announcement is big step forward for Charlotte borrowers,” Koster told the Observer. “It will provide immediate relief with the reduction of borrowers’ student loan balances and also helps borrowers who will still have remaining student loan debt plan for payments to resume in January 2023.”
The U.S. Department of Education also stated in the Wednesday announcement that North Carolina borrowers who work for non-profit organizations, the military, or local, state and federal government could be eligible to receive debt forgiveness for all of their student loans through the Public Service Loan Forgiveness program.
However, temporary changes that waive certain eligibility criteria for the pre-existing program will expire on Oct. 31.
This story was originally published August 24, 2022 at 2:01 PM.
