Student loan forgiveness benefiting 120,000 Montanese | State and Region

September 21, 2022

Montana Loans

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The U.S. Department of Education estimates that 120,400 Montanese are eligible for some degree of student debt forgiveness under a plan announced by President Joe Biden last month.

A significant number of those who qualify, 78,600, were Pell Grant recipients, meaning they are eligible for the maximum $20,000 in debt forgiveness. Pell grants are awarded only to students with exceptional needs, most with household incomes below $30,000 per year, according to the DOE.

Non-Pell beneficiaries earning less than $125,000 a year could receive debt forgiveness of up to $10,000. Student loans are standard at Montana universities and colleges for full-time freshmen, about 80% of whom have borrowed money over the past decade. About 61% of college graduates in Montana have taken out loans, the average owed is about $27,290 for graduates who attended school as residents of the state.

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“It means more breathing room for millions of families,” James Kvaal, undersecretary of the Department for Education, said in a press call on Tuesday. “It means renters are pursuing their dream of home ownership. It means parents who thought they would pay off their student debt for the rest of their lives. can now save for their own children’s education.

The loan forgiveness was not viewed favorably by elected Montana Republicans. Governor Greg Gianforte joined other Republican governors in calling on Biden to drop the loan cancellation plan, calling the move a benefit to the “elites” in society at the expense of taxpayers.

U.S. Senator Steve Daines called the loan forgiveness “totally unfair, wildly irresponsible and clearly unconstitutional,” also calling the forgiveness a burden on the taxpayers of Montana on the day Biden’s plan was announced.

Kvaal said on Tuesday that the Department of Education expects the loan cancellation plan to be recognized by law as something Education Secretary Miguel Cardona can do to compensate for financial damage. of the pandemic.

“We have considered the question of the Secretary’s legal authority to carry out this action quite extensively. We looked at it from all angles. The Secretary clearly has the power to protect borrowers from financial harm resulting from the pandemic and we are fully confident that he has the power to do so,” Kvaal said.

Tuition and fees at Montana’s flagship universities were $7,500 per year in the 2021-2022 school year, according to the Montana University System. Small colleges cost less than $6,000. The state of Montana has frozen tuition in 14 of the past 15 years at two-year colleges to manage the cost of educating students. Smaller colleges have had tuition freezes in 11 of the past 15 years, while flagship schools in Missoula and Bozeman have had tuition freezes in nine of the past 15 years.