(The Center Square) – North Carolina is 10th among states for the number of student loans expected to receive relief, and also total amount of relief, under a new federal loan forgiveness plan.
The U.S. Department of Education recently released data by state on the number of borrowers eligible for automatic loan relief under changes to Income-Driven Repayment plans implemented by the Biden administration.
The changes follow a 6-3 U.S. Supreme Court decision in June that blocked Biden’s initial plan to erase an estimated $430 billion in federal student loan debt through the HEROES Act. Reaction to the president’s end-around drew criticism.
Nationwide, the Department of Education expects to automatically discharge $39 billion in student loans for 804,000 borrowers in the coming weeks by including qualifying payments made under the Income-Driven Repayment plans “that should have moved borrowers closer to forgiveness” but “were not accurately accounted for,” according to the department.
“Borrowers are eligible for forgiveness if they have accumulated the equivalent of either 20 or 25 years of qualifying months depending on their loan type and IDR plan,” a release says.
The U.S. Department of Education says 24,870 North Carolina borrowers are approved for an IDR discharge under the payment count adjustment, translating into $1.135 billion in relief.
The number of eligible borrowers in the Old North State is 10th nationally, behind Texas (63,730), California (61,890), Florida (56,930), New York (42,070), Georgia (38,590), Ohio (37,070), Pennsylvania (29,840), Illinois (28,450) and Michigan (26,980).
In monetary relief, North Carolina is 10th behind Texas and Florida (each, $3 billion), California ($2.9 billion), Georgia ($2.1 billion), New York ($1.9 billion), Ohio ($1.7 billion), Illinois and Pennsylvania (each, $1.3 billion), and Michigan ($1.2 billion).
The student loan relief from changes to the Income-Driven Repayment plans is on top of previous forgiveness of $77.5 billion to more than 2.4 million borrowers in three groups. It includes $45 billion for 653,800 public servants through Public Service Loan Forgiveness; $10.5 billion for 491,000 borrowers with a disability; and $22 billion for nearly 1.3 million borrowers who were cheated by their schools, had schools close, or are covered by court settlements.
Notices to borrowers eligible for the automatic relief through Income-Driven Repayment plans went out in mid-July. The Education Department plans to continue to notify borrowers who reach the applicable forgiveness thresholds of 240 or 300 qualifying monthly payments every two months until next year, when all borrowers who are not yet eligible will have their payment counts updated, according to the Education Department.
