Over 1.3 Million Arizonans Will Have Billions In Student Loans Paid For By Taxpayers

Over 1.3 Million Arizonans Will Have Billions In Student Loans Paid For By Taxpayers

By Corinne Murdock |

At least 1,365,700 Arizonans will have about $19.2 billion in student debts forgiven through President Joe Biden’s student loan forgiveness handout. Those numbers could be much higher, since the U.S. Department of Education (USDE) noted in a Tuesday press release that they were unable to pinpoint the home states of over 5.1 million individuals with student debts.

According to the USDE, Arizona has approximately 554,900 Pell Grant recipients and 810,800 other types of borrowers. Pell Grant recipients will have $20,000 of their student loans forgiven (approximately $11.1 billion), while other borrowers will have $10,000 forgiven (approximately $8.1 billion).

The Biden administration’s plan prioritizes those with lower income. Nearly 90 percent of student relief funds will go to those earning less than $75,000 a year. For Arizona, that’s about $17.2 billion of the student loans that will be forgiven. 

Those who earn over $125,000 a year ($250,000 for households) are excluded from student debt forgiveness. That means 10 percent of the student relief funds will go to those who earn between $75,000 and $125,000 a year. For Arizona, that accounts for about $1.9 billion of the student loans that will be forgiven.

The USDE explained in a Tuesday press release that lower income borrowers were prioritized in order to “narrow the racial wealth gap.” The DOE noted that nearly 71 percent of Black individuals and 65 percent of Latino individuals with student debt were Pell Grant recipients.

In all, the Biden administration estimates that over 40 million Americans would have some amount of student debt forgiven, with nearly 20 million having all of their student debt forgiven entirely. 

In addition to issuing mass student loan forgiveness, the Biden administration extended its moratorium on student debt payments until January 2023. 

Members of Congress were quick to point out that Biden’s declaration on Sunday that the pandemic is over meant that his continued suspension of student loan repayments, as well as his plan to issue billions in debt forgiveness, weren’t justifiable. 

Congresswoman Debbie Lesko (R-AZ-08) called Biden’s student loan forgiveness program an “unconstitutional […] debt scheme” that oversteps his executive authority. 

Those who made payments on their student debt over the course of the pandemic will receive a refund of any payments that brought their debt below the maximum relief amount — but only if they didn’t pay their loan off in full. 

The Biden administration claimed that the program will cost the country about $240 billion in lost revenue over the next decade, but private estimates are higher. The Penn Wharton Budget Model estimated that the program would cost between $605 billion and $1 trillion.

Regardless of the losses, the Biden administration expressed hope that the student debt forgiveness would result in greater economic activity elsewhere such as the housing market. 

Applications for the student loan forgiveness program close on December 31, 2023. 

FAQS ABOUT BIDEN’S STUDENT LOAN FORGIVENESS

Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.

New Survey Shows Strong Support For Tax Reform

New Survey Shows Strong Support For Tax Reform

A new survey showing that the vast majority of Arizonans support reducing the personal income tax rate was released this week by Americans for Prosperity-Arizona. Voters believe a tax reduction is important to spur economic growth and allow Arizonans to keep their own money, according to the survey.

According to the nonpartisan Tax Foundation, Arizona has one of the highest marginal income tax rates in the country. Arizona also has a nearly $4 billion surplus for the 2022 fiscal year.

Americans for Prosperity-Arizona (AFP-AZ) is supporting a plan that would reduce the state personal income tax rate to 2.5% for all taxpayers, except for the highest bracket who will pay 4.5%, beginning in 2023,

AFP says the topline results of the survey demonstrate the following:

• Nearly two-thirds of Arizona voters believe it is time to reduce the personal income tax to make it flatter and fairer.

• 66% of surveyed voters said it’s very important to allow Arizona families to keep more of their own money, in addition to 62% saying it’s very important to allow small businesses to pay less in taxes so they can use their own money to grow and create jobs.

• Ensuring Arizona remains competitive with nearby states who have no income tax was also another reason surveyed voters supported reducing the income tax rate, with 53% of surveyed individuals saying that’s a very important reason as they considered the proposal.

“While Washington is working to pass some of the largest tax hikes in history, our state leaders are taking a different approach by letting Arizonans keep more of what they earn. Government digging deeper into our pockets won’t help small businesses hire more workers or meet the needs of Arizona families,” says AFP-AZ State Director Stephen Shadegg.

“Arizonans support this this pro-growth plan that would cement our state as a leader on tax reform and ensure we remain competitive with nearby states who don’t have an income tax. We are connecting with Arizonans across the state to tell them about this plan and enable them to tell their legislators they need to act now. We look forward to igniting Arizona’s economic recovery by making our tax system simpler, fairer, and flatter,” concluded Shadegg.