Starting in August, about 25 million student loan borrowers nationwide will begin getting emails about next steps to forgiving their debt, the U.S. Department of Education announced Wednesday.
The emails are the next step in President Joe Biden's sweeping student debt forgiveness plan, which he announced in Madison in April . The president's latest push to forgive student debt comes after the Supreme Court blocked his initial plan in 2023.
In Wisconsin, more than 700,000 people owe student loans — 724,600, to be exact, according to latest federal data from March .
Here's how student loan debt in Wisconsin compares to the rest of the country and what you need to know about debt forgiveness.
What is the average student loan debt in Wisconsin?
As of May, average student loan debt in Wisconsin is $31,679 per person, according to the Education Data Initiative . More than half of student loan borrowers are under the age of 35.
That's notably less than the average federal student loan debt across the country, which is $37,853, the Education Data Initiative reported in July .
What is the total student loan debt in Wisconsin?
In total, Wisconsin residents owe $23.3 billion in student loan debt, according to the Education Data Initiative.
Though most borrowers in Wisconsin owe under $40,000, about 1.5% of Wisconsinites are in student loan debt upwards of $200,000.
Here's a breakdown of how much Wisconsin student borrowers owe, according to federal data from March .
- 110,00 borrowers owe less than $5,000.
- 122,300 borrowers owe between $5,000 and $10,000.
- 153,800 borrowers owe between $10,000 and $20,000.
- 171,400 borrowers owe between $20,000 and $40,000.
- 67,500 borrowers owe between $40,000 and $60,000.
- 39,200 borrowers owe between $60,000 and $80,000.
- 19,200 borrowers owe between $80,000 and $100,000.
- 29,600 borrowers owe between $100,000 and $200,000.
- 11,600 borrowers owe more than $200,000.
How does Wisconsin student loan debt compare to other states?
Compared to the rest of the country, Wisconsin's student debt appears to be pretty average.
The state came in at 25th, right in the middle of the pack, in a recent ranking of U.S. states with the worst student debt by WalletHub, a personal finance company.
The study weighted both student loan debts and student work opportunities to rank each state. Metrics included average student debt and the proportion of students borrowers in each state, as well student work opportunities and unemployment rates among young people.
Wisconsin ranked 23rd for student loan indebtedness and 26th for student work opportunities.
Source:
WalletHub What to know about getting student loan debts canceled
If you're hoping for some relief on your student debts, the next step is to keep an eye on your email.
Starting in August, the Department of Education will email "all borrowers with at least one outstanding federally held student loan to provide updates on potential student debt relief,” the department said Wednesday .
The emails will also provide information on how people can opt out if they do not want debt relief. People looking to opt out will have until August 30 to contact their loan servicer and will not be able to opt back in, according to the department. They will also be temporarily opted out of forgiveness due to enrollment in income-driven repayment plans until the department can automatically assess their eligibility for further benefits.
Eligible Americans will receive a follow-up email with additional information after the rules of eligibility and forgiveness are finalized in the fall.
“The rules that would provide this relief are not yet finalized, and the email does not guarantee specific borrowers will be eligible,” the department said.
Who will be eligible for student debt relief?
Though more than 40 million people owe student debt in the U.S., only about 25 million people will be eligible for debt relief under Biden's program.
According to the rules drafted in April, the Biden administration named four specific classes of borrowers who would be eligible for relief under the proposed plan. These include:
- Borrowers who owe more now than they did at the start of repayment. Borrowers would be eligible for relief if they have a current balance on certain types of Federal student loans that is greater than the balance of that loan when it entered repayment due to runaway interest. The Department estimates that this debt relief would impact nearly 23 million borrowers, the majority of whom are Pell Grant recipients.
- Borrowers who have been in repayment for decades. If a borrower with only undergraduate loans has been in repayment for more than 20 years (received on or before July 1, 2005), they would be eligible for this relief. Borrowers with at least one graduate loan who have been in repayment for more than 25 years (received on or before July 1, 2000) would also be eligible.
- Borrowers who are otherwise eligible for loan forgiveness but have not yet applied. If a borrower hasn’t successfully enrolled in an income-driven repayment (IDR) plan but would be eligible for immediate forgiveness, they would be eligible for relief. Borrowers who would be eligible for closed school discharge or other types of forgiveness opportunities but haven’t successfully applied would also be eligible for this relief.
- Borrowers who enrolled in low-financial value programs . If a borrower attended an institution that failed to provide sufficient financial value, or that failed one of the Department’s accountability standards for institutions, those borrowers would also be eligible for debt relief.
USA Today contributed to this report.
This article originally appeared on Milwaukee Journal Sentinel: What is the average student loan debt in Wisconsin and how borrowers could get relief through Biden plan
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