Affluent, Middle-Class New Hampshire Student Loan Borrowers Get Relief

NEW HAMPSHIRE — Thousands of dollars in student loan debt will be canceled for millions of borrowers in the Granite State and other states under a long-awaited federal plan announced by President Joe Biden.

The federal government plans to forgive $10,000 in student loan debt for borrowers in New Hampshire making $125,000 or families earning $250,000 a year or less, Biden said in a statement posted to Twitter. Biden formally announced the plan from the White House on Wednesday.

An additional $10,000 of forgiveness will go toward borrowers who received Pell Grants for college, which typically go to people from lower-income backgrounds.

The amount is the largest forgiveness of federal student loans per person in history, according to a report by The Hill.

“In keeping with my campaign promise, my Administration is announcing a plan to give working and middle-class families breathing room as they prepare to resume federal student loan payments in January 2023,” Biden said on Twitter.

Under the new plan, payments on federal undergraduate loans can be capped at 5 percent of a borrower’s monthly income.

Biden also directed officials to extend an existing pause on federal student loan payments until Dec. 31. The pause, implemented to provide significant financial relief to those affected by the coronavirus pandemic, went into effect in May 2020 and was extended several times under the Trump and Biden presidencies. It was scheduled to expire on Aug. 31.

As of 2021, nearly 166 million borrowers owe a collective $1.59 trillion to student loans, more than Americans owe on their auto loans or credit card balances, according to credit reporting agency Experian’s most recent State of Student Loan Debt report.

The average balance per borrower increased slightly in 2021 to $39,487, up nearly $700 from 2020, according to Experian.

A New Hampshire borrower owes less than the average student borrower. Here’s a look at how student loan debt is affecting borrowers in New Hampshire, according to the Education Data Initiative:

• $6.5 billion in student loan debt belongs to state residents.
• $34,085 is the average student loan debt.
• 190,700 student borrowers live in New Hampshire.
• 59.3% of them are under the age of 35.
• 13.8% of state residents have student loan debt.
• Among the state’s indebted student borrowers, 15.9% owe less than $5,000.
• 24.5% owe $20,000 to $40,000 (average $28,266).
• 1.8% owe more than $200,000.

U.S. Sen. Maggie Hassan (D-NH), in a statement, said while she did not support canceling "all student debt" but, instead supported targeted relief, the proposal was a balanced approach she could support.

"The rising cost of higher education has led to greater and greater debt for far too many Granite Staters," she said. "I will continue to work to make higher education and job training programs more affordable and ensure that our young people and economy are not held back by student debt."

Hassan, her press office said, had pushed to increase the maximum Pell Grant award by $400, the largest increase in more than a decade. She also introduced legislation to double the Pell Grant and to ensure affordable, simple income-based repayment plans for all federal student loan borrowers and allow borrowers to refinance at lower rates.

U.S. Rep. Ann McLane Kuster (D-NH) also supported the plan.

“While the steps announced by the Biden administration today to address student loan debt represent positive progress to deliver some relief to low-income and middle-class families, more must be done to make education affordable and ensure student loan debt isn’t financially debilitating millions of Americans and weakening our economy," she said. “Student loan debt has been financially devastating for many Granite Staters — especially for the nearly 40 percent of student loan borrowers who are on the hook paying for an education they didn’t complete. For those who did graduate and hold degrees, many are not making a living wage."

Kuster said, for some, a traditional four-year education is not the path, and she had worked to expand access to more forms of education, including skills training, workforce development, and apprenticeship programs which are crucial to solving the workforce shortage.

According to the latest Census data, the median household income in the state is about $78,000, with per capita income coming in at more than $41,000.

This means the plan gives student debt relief to some of the highest wage earners in the Granite State.

About half of all student debt in the United States, according to CNBC, is owed by people who are working on graduate degrees and will probably have future earnings much higher than people with associate's or bachelor's degrees or no degrees at all.

Patch asked U.S. Sens. Jeanne Shaheen, U.S. Reps. Chris Pappas, Hassan, and Kuster why some of the highest wage earners in the nation were getting student debt relief, funded by taxpayers, by many who paid their school loans previously or did not take out school loans. We also asked whether the beneficiaries would be paying taxes on what is essentially a $10,000 monetary gift to some Americans.

None of them responded to the questions.

At post time, only one Republican candidate for U.S. Senate challenging Hassan, Don Bolduc, responded to the student debt relief.

“The Biden bailout for college loans that will no doubt enthusiastically be supported by Sen. Hassan represents more than a regressive tax on Granite Staters who opted not to go college: it’s another $300 billion of spending that will further fuel our inflationary woes," he said. "From the semiconductor bailout to the army of new IRS agents in the so-called Inflation Reduction Act, Senator Hassan’s votes have piled an astounding $1.3 trillion dollars in government spending in the last month alone. If you want to change Washington, it starts by retiring Sen. Hassan.”

An August survey conducted by the credit monitoring company ScoreSence revealed only 14 percent of U.S. borrowers with federal student loans on pause could afford the payments with no issues when the forbearance period ends. The survey also revealed that 42 percent of borrowers aren't sure how they will add loan payments back into their budget.

The Biden administration has so far taken a piecemeal approach to student loan forgiveness. In August, the administration canceled $3.9 billion in federal student debt for more than 200,000 borrowers who attended the for-profit ITT Technical Institute. In June, the Department of Education promised to erase $5.8 billion in debt related to Corinthian Colleges.

The Associated Press reported that targeted cancellation for specific groups of borrowers, the Biden administration had previously approved nearly $32 billion in student debt for 1.6 million borrowers.

In recent months, Democrats have increasingly called for Biden to cancel a significant portion of student loan debt. Some Democrats, including Senate Majority Leader Chuck Schumer and Sen. Elizabeth Warren of Massachusetts, have called on the president to forgive $50,000 per borrower.