Student Loan Forgiveness Would Have Big Impact at UWM

During the 2020 presidential campaign, student-loan forgiveness was a hot topic. But what is student-loan forgiveness?

“From my understanding the state is going to wipe away all my student debt or reduce it by 10 or 15%,” said Chris Michalski, a junior who is majoring in linguistics. “I think the total amount I’d receive would be a percentage of my total accumulated debt.”

“That’s when they void your student loans,” said Cristina Santamaria, a senior with a marketing major. “I think it would be a dollar amount. I couldn’t tell you how much they would forgive, but if I had to estimate I think $25,000 or so.”

“I don’t think of it as complete forgiveness where nothing is owed,” said junior Andrew Hickok, an atmospheric sciences major, “but maybe an extension on what is owed or some relief on the amount.”

While all three students are on the right track, so far the specifics of the final plan haven’t been revealed.

“The wide-scale forgiveness being talked about, until it happens and the final details are shared, we really don’t know how it would be implemented,” said Tim Opgenorth, director – department of financial aid, student employment, and military education benefits at UWM via email. “There is much debate in Washington if such action is allowed by the president, if it requires Congress, and if there would be lawsuits resulting from any action.”

So while students are in “wait and see” mode, there is some good news. While normally students need to begin repaying loans six months after they leave school or drop below half-time enrollment (generally fewer than six credits), as a result of Covid, repayment has been paused. Since March 2020, and now extended until August 2022, absolutely no repayment is required. And, another extension beyond August is possible. 

While this temporary pause has helped, the hope is that it will be replaced by permanent relief. At UWM specifically, and nationally, there is a lot of student loan debt dragging down recent grads.

“At UWM, the average loan balance was around $35,000 for students graduating between July 1, 2020 to June 30, 2021,” said Opgenorth via email. “This looks at students who started at UWM as freshmen and does not look at transfer or graduate students. About 70% of students are recipients of student loans.”

Nationally, 45 million students had at least one outstanding student loan in 2021 and average loan amounts have increased $8,000 since 2016.

The most likely scenario coming out the student-loan forgiveness debate is that President Biden will deliver on the $10,000 per student forgiveness he introduced during his 2020 presidential campaign, but the $50,000 per student forgivingness that other Democrats have asked for will probably not become reality.

But $10,000 would be a welcome windfall for any new graduate trying to get started.

“Well that would be ideal obviously,” said Santamaria. “I think for anybody going into their first job and new life with less debt would be great, but I just don’t know if it’s feasible. I guess we’ll see.”