Over 8.5 million Midwesterners eligible for student loan forgiveness

Over 8.5 million residents across 12 Midwest states are eligible to have up to $20,000 in student loan debt forgiven, according to a fact sheet released by the White House late last month.

The loan forgiveness, announced in August, is targeted at low- and middle-income borrowers. Around 90% of the relief will go to those making less than $75,000 annually, and eligibility is capped at $125,000 per year for individuals or $250,000 annually for combined households. Pell Grant recipients, usually those from lower-income households, are eligible for up to $20,000 in forgiveness, while all others are eligible for up to $10,000.

Read below for a state-by-state breakdown of the numbers, and what local lawmakers have been saying.

Illinois

Nearly 1.5 million borrowers are eligible in Illinois, over half of them for the $20,000 due to Pell Grant recipients.

Sen. Dick Durbin (D-IL) in a press release called the move a “crucial step” enabling borrowers in his state — who owe an average of $38,526 after graduation — to “fully participate in our economy.”

Indiana

An estimated 856,400 Indiana residents are eligible to have at least $10,000 of their loans forgiven, but they shouldn’t celebrate yet. The Indy Star reported this month that Indiana will tax forgiven debt as part of taxpayer’s income. It’s due to a provision in the 2021 budget removing the federal exemption for canceled student loans.

Iowa

Iowa has 408,700 borrowers eligible for loan forgiveness.

Support was somewhat muted from Iowa’s lone Democratic legislator in Washington. Rep. Cindy Axne told KMAland she didn’t “look at this as a long term or permanent fix in any way, share [sic] or form.” Axne said she would have figured out how to make it “a better opportunity across the board for everybody by lower the cost of school and fixing the student loan rate in general.”

Iowa Gov. Kim Reynolds (R) said in a press release that Biden’s loan forgiveness would encourage higher tuition rates and more student borrowing while driving inflation higher. She signed onto a letter with 21 other governors opposing the debt forgiveness.

Kansas

The White House estimates 360,900 Kansans are eligible for at least $10,000, and nearly two-thirds of them are Pell Grant recipients.

As previously reported by Heartland Signal, Kansas Attorney General and gubernatorial candidate Derek Schmidt lashed out on social media shortly after Biden announced the debt forgiveness plan.

“Forgiving student loans is unfair to students who have paid off their loans; unfair to students who have chosen less expensive community college options; unfair to taxpayers,” Schmidt tweeted.

But Schmidt chose to ignore the husband of his running mate, Katie Sawyer, had over $40,000 in federal loans from the Paycheck Protection Plan forgiven last year.

Michigan

Over 1.3 million borrowers in Michigan are eligible for loan forgiveness, over 10% of the state’s population.

Michigan Republicans, predictably, bashed the measure, claiming it would increase inflation and was unfair to those who had already paid their student debt back or didn’t have any to begin with, The Detroit News reported.

Gov. Gretchen Whitmer (D) said in a press release nearly 700,000 Michiganders will have their debt cut in half or eliminated, “lifting a huge burden off their backs.”

Minnesota

An estimated 729,700 Minnesotans are eligible, and law makers have expressed interest in ensuring forgiven loans aren’t taxed.

Currently, Minnesota is one of a handful of states, including Indiana, that would tax forgiven loans as income, potentially leading to some residents paying upwards of $1,000 in additional state income tax, the Duluth News Tribune reported.

DFL state Senators Ann Rest and Kar Dziedzic said in a press release they intend to put forward legislation as soon as possible to prevent that from happening. “We are going to ensure that student loan debt reduction doesn’t get taxed in Minnesota — period,” Rest said.

And despite his party’s misgivings around loan forgiveness, leader of the Republican-controlled state senate, Jeremy Miller, told the Tribune “It’s something we can take a look at when we are back in session.”

Missouri

The White House estimates that 777,300 Missouri residents are eligible for relief, and over 500,000 are Pell Grant recipients.

Missouri’s attorney general, Eric Schmitt (R) — who earlier this year bragged he was the one who made Missouri the first state to ban abortion following the Supreme Court’s Dobbs ruling — called the student loan forgiveness “the Biden administration’s abuse of power and assault on working-class Americans,” the Washington Examiner reported. Schmitt’s office is looking for legal options to stop the forgiveness, he said.

Nebraska

Around 232,100 Nebraskans qualify, which is 94.5% of all Nebraskans who have student debt, the Lincoln Journal Star reported.

Sen. Ben Sasse (R) said in a statement that debt forgiveness would “force blue collar workers to subsidize white collar graduate students.” He claimed most debt is held by those with graduate degrees. Meanwhile, Congressman Don Bacon (R) said it was “’robin-hood’ in reverse where the working man and woman is paying for the wealthiest in our society.”

Gov. Pete Ricketts (R) also signed the open letter calling on Biden to “withdraw your student loan plan immediately.”

North Dakota

North Dakota had the fewest eligible residents in the Midwest with 82,000.

Republican Gov. Doug Burgum followed the standard party line. In a statement, he said the plan was unfair and would incentivize higher tuitions and drive-up inflation.

The issue came up in a debate between candidates for North Dakota’s lone house seat late last month, the Grand Forks Herald reported. Republican incumbent Kelly Armstrong said the plan wouldn’t help borrowers who help the most. His challenger, Cara Mund, an independent, called it “a Band-Aid to the true issue.” She wants Congress to focus on interest rates for student loans.

Ohio

Ohio had the most eligible residents in the Midwest with nearly 1.7 million Ohioans, over one million of whom are Pell Grant recipients.

Rep. Tim Ryan (D) appeared to change course from his previous position on the issue when he responded to the forgiveness plan. Ryan said in a statement that he knew the costs of education are too high because he’s paying off his own family’s loans, but “waiving debt for those already on a trajectory to financial security sends the wrong message to the millions of Ohioans without a degree working just as hard to make ends meet,” the Associated Press reported.

It’s a marked change from the stance he voiced in 2018, when he called on Congress to bring down student debt. “If we can bail out the banks who did everything wrong, we can help out the students who did everything right,” Ryan said. He also voted in 2020 for the HEROES Act, which would have canceled thousands in debt for some “economically distressed” borrowers.

Campaign spokesperson Izzi Levy told the AP that Ryan believed Biden’s executive order when too far without address issue of rising education costs.

South Dakota

The White House estimates109,100 people in South Dakota are eligible to have their debt canceled.

In a Senate floor speech earlier this month, Sen. John Thune (R) quoted a tweet from Obama-era economic adviser Jason Furman. It compared the debt forgiveness to “pouring roughly (a) half-a-trillion dollars of gasoline on the inflationary fire that is already burning.”

Wisconsin

Around 685,100 Wisconsin residents are eligible for loan forgiveness.

Sen. Tammy Baldwin (D) called Biden’s action on the student debt crisis “a welcome relief for so many working families in Wisconsin.” Democratic Gov. Tony Evers said in a series of tweets that being higher education had changed his life. “It’s why I believe education should be accessible, affordable, and therefore attainable.”

Sen. Ron Johnson (R), of course, had a quite a different take. “Grossly unfair to families who didn’t send their kids to college or managed to pay off their student debt,” he said. “Democrats have become the party of the elite.

Johnson has an accounting degree from the University of Minnesota and was previously enrolled in a graduate program there.