ALBUQUERQUE, N.M. (KRQE) – Millions of students are slated to see their dues reduced after the Biden administration’s announcement that the federal government will be canceling some student debt. Not everyone will see relief, but data shows that many New Mexicans are likely eligible.
The President’s plan to cancel debt will not affect private loans. Only federal loans are eligible.
In New Mexico, there are more than 226,000 students or former students with outstanding federal loan debt, data from the U.S. Department of Education shows. In total, they owe $7.8 billion.
On average, each New Mexico student loan borrower owes a little over $34,406. That’s about 10% less than the national average, according to the New Mexico Higher Education Department.
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New Mexico ranks relatively low in terms of average federal student loan debt. Data from U.S. Department of Education.
That sets New Mexico as the 30th state in terms of average federal student loan debt. At the top of the list is Washington, D.C. There, borrowers have an average of just over $55,500 in federal loan debt.
Texas’ borrowers, on average, have less federal student loan debt than New Mexico, data shows. The average borrower in the Lone Star State has $33.442 in federal loan debt.
Borrowers in Colorado and Arizona both have a higher average amount of federal debt than New Mexico. In Arizona, $35.730 is the average balance due. In Colorado, the average is over $37,000.
The Biden administration’s plan is to focus debt relief on low-income borrowers. Pell Grant (need-based grant) recipients will receive $20,000 in forgiveness and most other federal borrowers will receive $10,000. But there’s an earnings cap. Households must earn less than $125,000 annually to qualify.
While not every New Mexican with student loan debt will get forgiveness, New Mexico expects to see relief for some students. “The Biden administration’s decision to forgive up to $20,000 in outstanding student loan debt will provide much-needed relief to working families,” New Mexico Higher Education Secretary Stephanie M. Rodriguez said in a news release.
In Wednesday’s announcement, the U.S. Department of Education said further details will be announced in the coming weeks. Borrowers will need to fill out an application, officials said, which will be available before the student loan payment pause ends on December 31.
Student loan payments have been on pause since March 2020 at the beginning of the COVID-19 pandemic. The moratorium has been extended several times and was originally set to expire on Aug. 31.