Governor Gretchen Whitmer called for celebration of the recent decision to forgive $10,000 in student loan debt for working class families. The decision should impact up to half of all Michiganders who still hold federal student loan debt, possibly cutting loans in half or forgiving them entirely. The pause on payments until the end of the year will also bring some relief to residents still struggling from 2 years of a pandemic caused by COVID-19.
“The decision to cancel $10,000 in student loan debt and $20,000 for Pell Grant recipients will make a real difference for 1.4 million Michiganders that have student loans, putting money back in their pockets,” said Governor Whitmer. “Nearly 700,000 Michiganders will have their debt cut in half or eliminated entirely, lifting a huge burden off their backs. People can use these savings to buy a home, start a business, get married, or start a family. I will work with anyone to keep lowering the cost of higher education and offering more paths for Michiganders to earn a higher education tuition-free, without going into debt in the first place.”
Michiganders earning less than $125,000 and married couples earning less than $250,000 will have $10,000 in student loan debt forgiven. Pell Grant recipients will have $20,000 in student debt forgiven. This decision is estimated to help up to 1.4 million Michiganders, particularly the 30 percent (around 420,000 people) who currently owe less than $10,000 and the nearly 50 percent (around 700,000 people) who owe less than $20,000. Additionally, the U.S. Department of Education has enacted a new rule that will ensure that borrowers on income-based repayment plans will pay no more than 5 percent of their discretionary monthly income on student loans instead of the normal 10 percent. This should cut out-of-pocket costs by half, saving residents hundreds of dollars a month. Alongside this federal endeavor, the Public Service Loan Forgiveness (PSLF) will offer additional forgiveness to those who work in public service positions after 10 years of employment and are current on their payments. As of June this year, 6,120 Michiganders have had $358 million in loans forgiven under the PSLF, with over 148,000 more Michiganders eligible due to the recent PSLF waiver.
Since taking office in 2019, Governor Whitmer has spent significant amounts of time making efforts across the aisle to make college more affordable through the expansion of tuition-free higher education and skills training for residents over 25, aspiring educators, and young students seeking degrees at the state’s public universities. She is responsible for establishing and funding the bipartisan Michigan Reconnect program, which has helped over 100,000 people find their paths toward tuition-free education or skills training. After the bipartisan budget that Governor Whitmer signed, Michigan was able to fund $10,000 scholarships for 2,500 future state educators every year, while offering school districts the funds for Grow Your Own Programs, which helps to train staff for teaching positions, free of charge.