LEXINGTON, Ky. — Some college students who took a break during the pandemic are returning, and now questioning how they will repay their student loan debt.

Some borrowers are looking toward the Biden administration for their new loan forgiveness plan. University of Kentucky student Alonzo McCoy is one. 

What You Need To Know

  • Colleges across Kentucky are giving students the option to either attend class in-person or online

  • Alonzo McCoy is a junior, equine science major at the University of Kentucky 

  • President Joe Biden announced the student loan forgiveness plan last week

  • The student loan repayment pause will end in December

After taking over a year off, McCoy, an equine science student, is returning to UK’s campus.

With the new student loan forgiveness plan being an option for some households, students in his shoes will have one less concern upon graduating. 

McCoy said that the loan solution could lessen his worries. 

“You’re not guaranteed a job right off the bat, but they expect for you to start paying a year after. So with a little bit of relief, it gives those that are graduating or those who are looking forward to graduating some room and comfort.”

President Joe Biden last week announced that his education department would move to forgive up to $10,000 in loans for any borrower making less than $125,000 per year, or $20,000 for Pell Grant recipients.

The White House also announced another key part of their loan relief effort that could aid future borrowers: reforms to the income-driven repayment plan system that would mean people making under a certain amount of money per year would end up paying less per month toward their undergraduate loans.

The changes would cap the monthly payment amount at 5% of a borrower’s income, plus cover any unpaid monthly interest so the balance doesn’t increase. Anyone who borrowed less than $12,000 will see the rest of their loans forgiven after ten years, as long as they make payments toward the plan.

First professor of economics at the University of Kentucky Ken Troske said the plan focuses on students who were affected by the pandemic and beyond. 

“It’s not going to affect students who presumably entered this year, so freshman even if they came in and took out a student loan, it’s not going to affect them.”

Students like McCoy, who started college in 2017 and previously received student loans, are eligible. 

The equine major said aside from the expenses, being back in-person full time has its challenges, but he will continue in-person until graduating. 

The Biden-Harris administration said they will release more details about the debt forgiveness in the coming weeks. 

The current student loan repayment pause is set to end on New Year’s Eve and resume Jan. 2023.