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What the federal student loan forgiveness plan means for borrowers in Ohio

Daniel Konik
Statehouse News Bureau
Students walking on college campus in Ohio.

Kalesha Scott, of Dayton, said the student loan forgiveness plan is good news.

She knows firsthand how difficult it can be to pay back student loans. The Central State University graduate is paying back loans of her own while working with other borrowers as part of her job at the Ohio Student Association, a statewide organization that advocates for students.

She said many of them graduate college, get a job, and find they can't make ends meet. And even if they do get a good-paying job, she said they often find they can't do things their loan-free peers can.

"People who are trying to get loans for homes, for cars, and different things like that, that are in the process of paying their student loans back, are a lot of times denied," Scott said.

Scott said up to now, student loan borrowers can often get some relief on their payments but it comes with a greater cost.

"People have to choose between paying rent and eating and paying back their student loan debt and in the grand scheme of things, having a place to live and food in our stomachs, was more important than paying back student loans at the time so that caused people to go into deferment and different things like that so it has been a plague on a lot of people's lives," Scott said.

President Joe Biden announced earlier today that many government loan borrowers will see some relief. His plan forgives $10,000 of undergraduate student debt and $20,000 for those who had pell grants. It also extended the pause on student debt repayment through the end of this year.

The U.S. Department of Education reports the average student loan balance in Ohio is $34,923. And it says there are 1,776,400 federal student loan borrowers in Ohio who altogether owe $62.6 billion.

Piet van Lier, senior researcher with Policy Matters Ohio, says Ohio ranks as second overall nationally in the percentage of residents who owe student loans. He said the loan forgiveness will help, but he said more needs to be done to make college affordable. He said Ohio isn't investing enough on the front end to make higher education affordable.

"What we've got to do is focus on how we make higher ed more affordable and accessible to everyone no matter where we live, what our zip code is, what our skin color is, what kind of money we have in the bank. If we believe in the power of education, we've got to put our public dollars and good will into public education, public higher education, especially as a public good that will really lift everyone as we lift our society up together," van Lier said.

As van Lier explained, a study his organization released in February 2020 shows minority students are more likely to have student loan debt and the problems that go along with it.

"Black and brown people who have gone into debt to cover education costs end up owing more. Often their debt increases even as they are paying it down and the racial wealth gap, it exacerbates that so this kind of debt relief will have a really big impact, particularly for lower-income and Black and brown communities," van Lier said.

But Logan Kolas, research fellow at The Buckeye Institute, said the student loan forgiveness plan is "an absolutely awful idea."

"I think we need to realize only 16% of Ohioans have student loan debt so really what you are doing is helping recent college graduates at the expense of everybody else," Kolas said.

Kolas said forgiving the debt encourages people to take on more student debt and gives colleges more incentive to raise tuitions.

"We should be doing more to address the price of college. That's the problem," Kolas said.

Kolas said this could be dangerous for the economy, especially right now because it could increase inflation so we don't want to be doing that right now.

According to afact sheet from the Biden administration, nearly 8 million borrowers may be eligible to "receive relief automatically" because of income data already available to the U.S. Department of Education. For others, an application will be made available before the pause on repayments is lifted at the end of the year.

Contact Jo Ingles at
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