Student Loan Decision Will Impact Hundreds of Thousands of Kentuckians
Monday, July 3, 2023
The U.S. Supreme Court's decision to block President Biden's one-time, $400 billion student debt relief plan will affect hundreds of thousands of people in the Commonwealth.
According to the White House, more than 300,000 Kentuckians had applied or were automatically eligible for debt relief before the Department of Education stopped accepting applications due to legal challenges.
Jason Bailey, executive director of the Kentucky Center for Economic Policy, said nearly one in five Kentucky adults has student loan debt. He pointed out the decision is the biggest setback for low-income people, who stood to benefit most from the plan, and Black Kentuckians, who are more likely to have student debt due to lower family wealth.
"And carrying that -- for years, sometimes decades -- inhibits people's ability to buy a home, to start a business, to save for retirement," Bailey outlined. "Or to just have the financial flexibility that they need to have a good quality of life."
According to a Kentucky Center for Economic Policy report in 2021, around 616,000 Kentuckians have student debt, with an average amount of more than $33,000.
Under the now-canceled plan, around 200,000 Kentuckians with $10,000 or less in student loans and making under $125,000 a year would have had their debt canceled entirely.
Bailey predicted with inflation and high gas prices, more Kentuckians will face additional hardship, especially those who never completed their college degree, or who whose wages are not growing or remain low.
"It's a huge disappointment and potentially a drag on our economy moving forward," Bailey contended.
Nationwide, household student-loan debt has ballooned from nearly $500 billion to $1.7 trillion over the past 15 years.
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