President Biden announced his administration will cancel up to $10,000 in federal student loan debt for those earning under $125,000 per year, or $250,000 per year for married couples who file taxes jointly.
Pell grant recipients or undergraduates with the most significant financial need, will be eligible for double that amount in loan forgiveness, according to the administration’s plan. The forgiveness is unlikely to extend to those with private or school loans.
Apart from extending the pause on loan repayments until the end of the year, the administration announced in April that pre-pandemic federal student loan defaulters will also automatically be put in good standing, offering those struggling with payments a fresh start.
About 47% of Washington college graduates had student loans as of 2020, and 16% hold private loans, according to The Institute of College Access and Success, an advocacy organization.
The state’s average debt load for college graduates, at $23,993 in 2020, is among the lowest nationally, according to the institute’s analysis of data from the Department of Education.
However, Washington also ranks in the bottom five nationally for Pell Grant recipients, meaning fewer college graduates in the state will be eligible for student debt forgiveness up to $20,000.
College graduates from public institutions may benefit more from Biden’s loan forgiveness program than those from private non-profit institutions, according to self-reported data from 15 Washington colleges that awarded the most number of bachelor degrees in 2020.
A greater share of graduates from private colleges have student debt and private student loans than their counterparts from public institutions.
In 2020, the median student debt in Washington for a public college graduate was $22,466. For private college graduates, it was $28,659.
Among the 15 colleges, Northwest University had the most number of graduates with student loans in 2020 and the highest percentage with private debt. Over 80% of its graduates owed an average student debt of $26,964.
Pacific Lutheran University followed after, with more than two-thirds of its graduates holding an average debt size of $25,761.
Walla Walla University and the University of Puget Sound reported the largest student debt load of over $30,000 for more than half its graduates.