Cancellation of student loans will have an outsized impact in the Mountain West

September 9, 2022

Montana Lending

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A substantial percentage of people in the Mountain West area with student loans will see up to $20,000 in student loan debt forgiven after a recent announcement of the Biden administration.

Nearly 38% of Wyoming borrowers will be student loan free as a result of this forgiveness initiative, according to a recent analysis by Student Loan Hero, a student loan servicing company owned by Lending Tree.

This is the highest share in the country, and Nevada and Utah are not far behind.

President Joe Biden said last month he hoped to make it easier for the middle and working classes to build careers without a huge financial burden.

“The cost of education beyond high school has increased dramatically. The total cost to attend a four-year public university has tripled, almost tripled, in 40 years,” he said.

Most borrowers will get $10,000 forgiven, while Pell Grant recipients, which are given to low-income students, will get $20,000. Only people earning less than $125,000 a year, or $250,000 for married couples, are eligible.

Analysis shows that most Mountain West states have fewer people taking loans on average, and those students tend to choose less expensive schools. Therefore, canceling $10,000 of debt has a bigger impact and allows more people to go debt-free.

“That said, even in these states at the top of the list, the average debt is still high,” says Student Loan Hero. “For example, our Utah student loan analysis shows average balances between federal and private borrowers of $31,046. Our Nevada student loan data shows average balances of $32,402.”

Several Republican officials in the region were critical of Biden’s announcement, saying it’s a federal document that doesn’t address the high costs of education.

This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Nevada Public Radio, Boise State Public Radio in Idaho, KUNR in Nevada, the O’Connor Center for the Rocky Mountain West in Montana , KUNC in Colorado, KUNM in New Mexico, with support from affiliate stations throughout the region. Funding for the Mountain West News Bureau is provided in part by the public broadcasting company.

Copyright 2022 Wyoming Public Radio. To see more, visit Wyoming Public Radio.