More than 271,000 Tennesseans will have their student loans canceled under Biden plan

More than 271,000 Tennesseans will likely have their student loans completely forgiven following President Joe Biden’s decision to cancel a portion of student loan debt.

Biden announced Wednesday the federal government will forgive $10,000 in student loan debt per borrower, plus another $10,000 in debt relief to Pell Grant recipients.

More than 862,000 people carry federal student loan debt in Tennessee, and the average borrower has about $36,418, just below the nation’s average, according to data compiled by the Education Data Initiative. The outstanding collective federal loan balance in Tennessee is about $31.4 billion.

About 32% of Tennessee borrowers owe less than $10,000, according to federal data. Another 20% owe $10,000 to $20,000 in student debt, and the rest owe more than $20,000.

Biden spelled out the basics of the plan in a speech from the White House:

In Tennessee, the median household income was $54,833 in 2021.

Students walk across the pedestrian bridge Wednesday on the first day of the fall semester at the University of Tennessee in Knoxville. Students returned to classes on the day President Joe Biden announced loan debt relief.

Updates: Biden will forgive up to $20,000 in student loan debt and extend payment pause

Biden also extended the moratorium on federal student loan payments that was implemented during the coronavirus pandemic through Dec. 31. The cumulative federal student loan debt is $1.6 trillion and rising for more than 45 million borrowers.

University of Tennessee at Knoxville Chancellor Donde Plowman told Knox News anything that benefits students is a step in the right direction.

“I need to learn more about which students that applies to, but one of the things we’re proud of here is that our student debt is below the national average,” Plowman said. “Anything to help our students we’re happy about.”

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Abigail Bacci, a fifth-year supply chain management student at UT, took out a loan at the beginning of her first year, but has paid for school through scholarships since.

“As somebody that has a loan, I’ll gladly take a little bit off. I’d be happy to not pay. But I think it’s tough if … you faced going to college only funded through loans, you took a different path … and maybe you would have gone to school or pursued a different path if you knew this was ahead of you. For those people, I think I’m a little bit sad,” she said.

Part of the push to provide student debt relief comes from the reality of the rising cost of higher education. Biden said the total cost of both four-year public and four-year private college has nearly tripled in 40 years but the federal Pell Grant program has not kept up.

Get the details: ‘Debt and no degree’: Biden cancels as much as $20K in student loan debt

“That ticket has become too expensive for too many Americans,” Biden said. “The burden is so heavy that even if you graduate, you might not have the ticket that graduating college once offered.”

To have any burden of that debt lifted could help borrowers feel like they can move forward in their lives, University of Tennessee at Knoxville Professor Robert Kelchen told Knox News back in June.

“The impact of student debt is that it’s money students can’t spend on something else,” Kelchen said. “It can mean people may choose to delay buying a car or a house. They may delay things like getting married or having kids because those are also expensive.”

Becca Wright: Higher education reporter at Knox NewsInstagram | Twitter | Email | 865-466-3731Enjoy exclusive content and premium perks while supporting strong local journalism. To get started, visit knoxnews.com/subscribe.

This article originally appeared on Knoxville News Sentinel: Thousands of Tennesseans will have student loans canceled under Biden plan