MILWAUKEE — At the end of August, President Biden announced a new student loan forgiveness plan. Now, those who qualify are now preparing for what’s next.
Loans that qualify for forgiveness must be federal, undergraduate loans. The administration is canceling up to $10,000 for individuals making less than $125,000 a year, or married couples making less than $250,000 per year. That amount increases to $20,000 for Pell Grant recipients.
In Wisconsin, the total amount of student debt equals $23.1 billion, according to federal data compiled by UW- Madison’s SSTAR Lab.
And there are more than 700,000 people in the state who have student loan debt.
Kaitlyn Anderson is one of those people. She is an undergraduate student at the University of Wisconsin-Milwaukee, studying to become a social studies teacher.
“I still have three semesters to go before I’m done with my undergraduate,” she said. “I have to take out about $12,000 per semester.”
Anderson is paying for college herself. She works as a nanny and also takes out student loans. So far, she has $74,000 she will have to pay back after college.
“I set aside about $100 every paycheck into a savings account to use when I do graduate and start paying back my loans,” Anderson said.
What Anderson said concerns her the most is the low salary she’ll have as a teacher. She said she expects to make between $38,000 and $45,000.
“That $10,000 will help, but it won’t make much difference in the long run because I’m going to be paying these loans back for years,” she said. “I know teachers in their fifties who are still paying back their student loans.”
She recalled the months leading up to her freshman year. Anderson is a first-generation college student and applied without any help.
“Nobody really gives you direction when you take out student loans,” she said. “No one tells you how interest works, no one tells you how to take out loans, and it’s a fend for yourself kind of game.”
She knows $10,000 is a small dent in what she will have to repay, but she said she is still grateful for the help.
“It’s going to save me a few years of paying off loans so that maybe I can buy a house,” Anderson said.
To claim student loan relief, required documents must be filled out and submitted by Dec. 31. To be notified when the process opens, you can sign up at the Department of Education subscription page.
Mandatory student loan payments and interest accrual are set to resume on Jan. 1.