(The Center Square) – New York’s Democratic U.S. Sen. Chuck Schumer said more than 10% of New Yorkers will receive some relief from President Joe Biden’s student loan forgiveness program announced last week.
- By Steve Bittenbender | The Center Square contributor
- 1 hr ago
- Republished with Permission: The Roosevelt Island Daily News
And nearly half of those residents impacted will get their debts erased completely.
Schumer, the majority leader in the U.S. Senate, also called on processors for the federally backed student loans to ramp up their staffing so those eligible can get approved as quickly as possible.
In all, more than $16.5 billion in student loan debt is set to be canceled. That’s roughly 17.6% of all the federal student loan debt incurred by New Yorkers, according to a statement Schumer released Sunday.
The Senate leader said the relief can’t come quickly enough because those who took on the loans have been ensnared in “a boondoggle system” and trapped by “unfair interest compounding” on their payments.
“That’s why we need the service providers to be ready to answer questions from the millions of New Yorkers who are eligible for this debt cancellation,” Schumer said.
According to the Biden administration, individuals who received Pell Grants will have $20,000 of their federal loan debt canceled. Other individuals whose income is less than $125,000 (or $250,000 for married couples) can receive up to $10,000 in relief.
In New York, Schumer said nearly 2.3 million New Yorkers will qualify for some relief. That’s nearly all of the state residents who have some type of federal student loan debt. Of those affected, 1.1 million will have their balances forgiven.
According to federal data, the average amount owed by a New York borrower is $38,400.
Schumer also noted that a provision in the American Rescue Plan passed last year will make the total amount forgiven to recipients tax-free.
While there have been vocal critics of the move, Schumer added that the student loan forgiveness and other initiatives taken to address debt for postsecondary education and training will create residual positive economic impacts.
“This action, along with the pause on federal student loan payments, interest, and collections, will improve borrowers’ economic security, allowing them to invest in their families, save for emergencies, and pay down other debt,” he said.
Nationally, the White House has pegged the program’s cost at $24 billion annually for 10 years. However, a study released Friday by the Penn Wharton Budget Model expects the cost to be substantially higher.
“We estimate that President Biden’s proposed student loan debt cancellation alone will cost between $469 billion to $519 billion over the 10-year budget window, depending on whether existing and new students are included,” the nonpartisan fiscal policy research institute stated.