Student loan borrowers get some relief; Nebraskans owe more more than $8 billion

LINCOLN, Neb. (KLKN) — Hundreds of thousands of Nebraskans are getting some long-awaited help with student loan debt.

The Biden administration announced on Wednesday that it is canceling up to $10,000 of federal loan debt for those who qualify.

An income cap will limit the forgiveness to people earning less than $125,000 a year and $250,000 for married couples.

According to LendingTree, Nebraskans owe $8.3 billion in student debt.

That number includes both federal and private student loans, affecting an estimated 300,000 borrowers statewide.

Our nation’s federal student debt tops $1.6 trillion, impacting more than 43 million Americans.

President Joe Biden says this will allow many to set their sights on a future once again.

“People can start to finally crawl out from under that mountain of debt to get on top of the rent and utilities to finally think about buying a home or starting a family or starting a business,” Biden said.

But those within the same income range who received a Pell grant, which are reserved for undergraduates with the most significant financial need, are set up to receive a total of $20,000 in debt forgiveness.

Some students from the University of Nebraska-Lincoln said this should have happened years ago for the hardworking generations who labored to pay it all back.

“It’s not my favorite idea, mainly because a lot of people have paid back their federal student loans, and they had to work really hard to do that,” UNL student Teagan Steinmeyer said. “While it would be great for me personally not to have my student loans anymore, I know people like my dad and my mom worked really hard to pay theirs back, so I feel like it would be just a tad unfair.”

Several students are positive about what this could mean as they step into the next stage of life.

“I was always under the assumption that as soon as I got a job in my industry, that most of my money right off the bat would be going into federal loans, and it probably would be for the foreseeable future,” Raychel Nelson said. “I mean a lot of people are in so much debt that they never get to the bottom of it. I even said something to my husband yesterday, like if this were to happen, that would be huge for us.”

The loan forgiveness plan is for money borrowed for school before July 1, 2022.

The Department of Education will release information in the coming weeks for those eligible to sign up for debt relief.

Cancellation could be automatic for some, if the department has access to your income information, but others will need to fill out a form.

The White House also announced that it is extending the pause in student loan repayment one last time.

Payments are now paused through the end of December and will resume in January. The extension of the pandemic-era payment pause comes just days ahead of when it was set to end on Aug. 31.