Monday, July 15, 2024

New Student Debt Relief Plan Expected to help Latinos Immensely

Under President Joe Biden’s new student debt relief plan, about half of the Latino community will have their debts forgiven.

The Biden administration is canceling up to $10,000 in federal student loan debt and an extra $10,000 if the student is a Pell Grant recipient. In order to qualify for this act, the student must earn under $125,000 in income or under $250,000 if they are married. This act is expected to have a significant impact on the Latino community.

According to Excelencia in Education, one of the nation’s leading educational think tanks focused on Latino college completion, 51% of Latinos who began their education after 2012 borrowed funds to pay for their undergraduate or graduate education. They also predict that about half of the community will have their debts forgiven.

Carlos Vera, co-founder and executive director of Pay Our Interns and a college graduate, owes $40,000 in federal and $20,000 in private loans. “$20K will be very helpful,” said Vera. “That means long term, I’m paying less — and then the second thing is it makes me feel a little bit better about potentially like, you know, going to grad school, or doing other life decisions that I probably couldn’t beforehand.”

About 67% of Latino students have student debt, according to the education Data Initiative. Over 30% of Latinos put off marriage and having children because of their student debt.

Janet Murgía, president and CEO of UnidosUS, says, “Most Latinos in postsecondary education come from low-income households and are the first in their families to go to college, often at the cost of enormous financial sacrifices from them and their families.” According to a study that UnidosUS released, more than half of the low-income Latino communities in Arizona, Texas, and California have first-time Latino students who took out loans for their education.

According to Excelencia in Education, Latinos are more likely to default on their loans than their non-Latino white counterparts — 35% compared to 20%. Those with a bachelor’s degree still face a default rate two times higher than their white peers because of the difference in earnings among all bachelor’s degree graduates.

The Education Department is expected to release more information on the next steps eligible applicants can take.

NBC News