DENVER (KDVR) — Colorado’s student loan borrowers are about to get a pressure valve for monthly payments.
President Joe Biden announced Wednesday that up to $20,000 in student debt will be forgiven for federal student loan borrowers. Borrowers will not be required to make monthly payments until 2023, which is a continuation of the freeze that began at the onset of the COVID pandemic.
The forgiveness program has some guide rails. Borrowers must make less than $125,000 in order to qualify for forgiveness. Those who received a federal Pell Grant for their undergraduate loans are eligible for up to $20,000 in forgiveness, while those who didn’t qualify are eligible for $10,000 in forgiveness.
Most student borrowers have more than $10,000 of federal debt nationwide and in Colorado.
In Colorado, there are 771,000 federal student loan borrowers with debt levels that range from less than $5,000 to more than $200,000, according to U.S. Department of Education records of the federal government’s federal loan portfolio. Collectively, Colorado borrowers owe $26.3 billion and have an average debt of $36,126, the nation’s 17th-highest.
The forgiveness program will, in theory, totally wipe out the student debt of hundreds thousands of borrowers.
There are 231,000 borrowers in Colorado who owe less than $10,000. Another 154,100 owe between $10,000 and $20,000. Some of these borrowers could potentially have their entire debt absolved, assuming they meet Pell Grant criteria.
Half of borrowers, however, owe more than $20,000.
Over 22% of Colorado borrowers owe between $20,000 and $40,000. Another 10% owe between $40,000 and $60,000. Six percent owe between $60,000 and $80,000, and 3% owe between $80,000 and $100,000 and $200,000. Eight percent of borrowers owe more than $100,000.