Some 172,000 student loan debt relief applications from Oklahomans have been approved and forwarded for discharge, federal officials say, but their status remains on hold pending the outcome of a legal battle.
The state numbers were part of data released this week for the first time by the Biden-Harris administration, which first announced its student debt forgiveness plan last August.
Applications were accepted for four weeks before being shut down by legal challenges. The Supreme Court is set to hear arguments in two related court cases in late February that could determine the effort’s fate.
Overall, 26 million people nationally either applied for one-time debt relief or had already provided sufficient information to be deemed eligible for relief, federal officials said.
Over 16 million of those applications were fully approved by the Department of Education and sent to loan servicers for discharge. Of those, borrowers from California and Texas stood to benefit the most, at over 1.4 million approved from each.
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In Oklahoma, a total of 270,000 people applied or were deemed automatically eligible for relief.
Among Oklahoma residents, about 12.3% have student loan debt and owe on average $31,525, according to educationdata.org.
The plan as announced would provide up to $20,000 in debt relief to over 40 million Americans.
“When we opened the application for this program in October, we saw tremendous excitement immediately. In fact, in the first weekend alone, 8 million people applied,” Bharat Ramamurti, deputy director of the National Economic Council, said during a media conference call Thursday.
“Unfortunately, less than a month after we published our application, court challenges brought on by Republican officials and special interests blocked us from accepting more applications or from discharging debt for those borrowers who have been fully approved.”
Nearly 90% of the benefits of the relief would go to people earning less than $75,000 per year, he said.
The pandemic-era debt payment pause will remain in effect through the end of June, followed by a 60-day transition period, Ramamurti said.
“That should give us enough time after the Supreme Court rules to transition to the next phase of all of this,” he said.
He said the administration has no backup plan if the court strikes down the plan.
“But our lawyers and our team are very confident in our legal authority here,” he said. “We have laid out our arguments in our brief to the Supreme Court. We’ll see what the other side has to say on that.”
Opponents of the plan have broadly challenged the executive branch’s power to cancel student loan debt en masse.
The administration contends a law passed after 9/11 gives the president the ability to forgive student loan debt in connection to national emergencies.
Ramamurti said: “We are fighting for the 40 million borrowers eligible and the tens of millions of borrowers who have already applied and should have already gotten the relief that they need.”
Video: With Biden plan in limbo, DOE proposes student loan changes
Following up on a plan from President Biden, the Education Department proposed changes to “reduce the cost of federal student loan payments.”
How student loan debt has increased over time
How student loan debt has increased over time
Some of the most common types of debt—a mortgage, an auto loan, and a credit card balance—are often necessary forms of debt people take on for everyday life, from covering household purchases and building good credit to attaining the American Dream of home ownership.
In the U.S., pursuing higher education has also often meant adding on another type of debt burden. Since The Great Recession, rising tuition at U.S. universities has contributed to student loans growing at rates unseen with other forms of personal debt. As of June 2022, the average student loan debt among consumers in the U.S. totaled $39,381, according to Experian. In 2012, U.S. consumers’ overall student loan debt surpassed the $1 trillion mark for the first time, and it’s continued its climb since.
To better understand how student loan debt has grown over time, Experian compiled data collected from student loan holders from across the country and government data dating back to 2009. The average loan balance used in the analysis represents the average debt among all student loan borrowers.
Historical data shows how average student loan debt balances have increased faster than inflation. In fact, student debt has also grown to equal more than credit card and auto loan balances combined.Â
Student loan debt is the biggest form of debt after mortgages
As of Q2 2021, the average student loan debt balance has grown by nearly 92% since 2009, according to Experian data. Student loan debt averages saw the biggest year-over-year increase from summer 2012 to summer 2013 when they jumped nearly 10%. For Americans who carry student loan debt, it averages nearly $40,000—second only to home mortgages when it comes to consumers’ average debt balance.
Student loan debt growth is outpacing inflation
According to the U.S. Bureau of Labor Statistics (BLS), the annual nationwide inflation rate in the U.S. hovered around 2%—and often fell below 2%—over the decade leading up to the COVID-19 pandemic. In 2021, the first full pandemic-era calendar year, the inflation rate spiked to 7%.
Since the summer of 2012, the average student loan balance has grown much more rapidly. Over the three-year period preceding 2012, the average student loan balance grew by just under $2,000. Since 2012, student debt rose steadily at a much faster rate than income.
Student loan debt is outpacing income
The median household income in the U.S. fell in the years following the financial crisis of 2008, and then saw modest year-over-year growth from 2015 to 2020, according to the U.S. Census Bureau.
Comparatively, the average student loan debt balance has increased at more than twice the rate of the median household income since 2009. By 2020, the median household income had grown from $49,777 to $67,521, or about 36%, not adjusting for inflation. Between 2009 and June 2022, the average student loan balance held by U.S. consumers grew about 92%, from $20,560 to $39,381.
Growing college costs adding to financial strain
For at least a decade, college tuition has become increasingly expensive, according to data from BLS and the U.S. Department of Education.
The rate at which the average student loan debt balance in the U.S. has increased actually slowed from 2020 to 2021, according to Experian data. This is largely due to a nationwide drop in college enrollment during the COVID-19 pandemic, which reduced the number of people who took out new loans.
The CARES Act, passed in March 2020, also affected loan balances when it set an emergency relief interest rate for federal student loans at 0%. The law also allows employers to make up to $5,250 in tax-free annual payments toward their employees’ student loans, which could have had an effect.
On August 24, 2022, the Biden administration announced a student debt relief plan to cancel $10,000 in student debt for individuals making less than $125,000 a year, or $250,000 for married couples. Pell Grant recipients will receive $20,000 in loan forgiveness. For all borrowers, the pause on federal loan repayment has been extended for more than two years now, with a final deadline of December 31, 2022.
This story originally appeared on Experian and was produced and distributed in partnership with Stacker Studio.
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