Editor’s note: The following is adapted from an Aug. 24 communication from Delaware State University President Tony Allen to the DSU community.
To the Delaware State University Community:
This week, President Joe Biden announced the most comprehensive, far-reaching student loan debt relief plan in American history. In addition to steps the Biden-Harris Administration has already taken to provide over $32 Billion in loan relief to 1.6 million borrowers, the new plan includes the following:
- Extending the federal student loan pause a final time through December 31, 2022 to provide borrowers a smooth transition back to repayment.
- Providing up to $20,000 in debt cancellation to Pell Grant recipients and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers who currently earn less than $125,000 per year or households currently earning less than $250,000 are eligible. The effort includes current students with loans. Loans must have been originated prior to July 1, 2022.
These actions are expected to help 43 million federal student loan borrowers with 90% of the relief going to borrowers earning less than $75,000 per year. A great majority of them will be recent college graduates. In his announcement, the President noted that, as a result of this program, the average Black borrower will see his or her balance cut nearly in half, and more than one in four will see their balance forgiven altogether. Similar projections are noted for Hispanic borrowers.
This is how the president’s action will directly affect the Delaware State University community: currently 63% of our undergraduates are fully Pell Grant-eligible, and they graduate with about $52,000 in federal student loan debt. Those students will see a nearly 40% reduction in their student loans. Another 30% of our undergraduates will receive about a 20% reduction in their repayment obligation.
Magnify that impact by the 325,000 currently-enrolled undergraduates and hundreds of thousands of recent grads at our 101 sister HBCUs around the nation, and you can begin to get a feel for exactly how significant this announcement is: just over the past ten years, this totals $15 Billion in debt relief for more than 1.1 million HBCU alumni.
The Biden-Harris announcement also initiated a major overhaul of the income-driven repayment option, which has the potential to reduce monthly payments by up to 80% for graduates with a family of four and an annual income of $77,000. It’s worth noting, too, through the Public Service Forgiveness Loan Program, that if you, as a borrower, have worked in public service (federal, state, local, tribal government or nonprofit organization) for 10 years or more, you may be eligible to have all your student debt canceled. You can find more details on that program here.
Today’s news makes Delaware State University even more affordable, especially when you add it to our commitment to the four-year, full-tuition INSPIRE scholarship (for any Delaware graduating high school senior with a 2.75 GPA and a commitment to public service); the digital learning initiative (providing all incoming Freshmen and transfers with an iPad or MacBook to reduce the cost of instructional materials and promote integrated digital learning); and raising tens of millions of additional scholarship support across a variety of disciplines and interest areas.
The Biden administration’s bold move is a grand accelerator to our efforts. We are truly grateful.
Tony Allen is president of Delaware State University.
