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LEXINGTON, Ky. (FOX 56) — Kentuckians are looking at billions in student loan debt relief after the White House announced its student loan forgiveness plan.

On Wednesday, President Joe Biden said he would be canceling some student debt for millions of Americans, delivering on a campaign promise ahead of the November midterm elections.

“We will forgive 10,000 dollars in outstanding federal student loans. In addition, students from low-income families with Pell grants will have their debt reduced by $20,000. Both of these targeted actions are for people who need it the most. Most working-class people, who work especially during the pandemic, making under $125,000 a year. You make more than that, you don’t qualify. Ninety-five percent of the borrowers can benefit from these actions. That’s 43 million people,” Biden said.

Data from the Department of Education shows nearly 8 million borrowers may qualify for student relief automatically.

A WalletHub study showed that, at the end of the first quarter of 2022, total outstanding college loan debt amounted to around $1.61 trillion. With a population of nearly 43.4 million borrowers, that amounts to roughly $37,000 per borrower.

An April 2021 study from KyPolicy found similar results and broke down the numbers for Kentucky.

“Around 616,000 Kentucky residents have outstanding federal student loans, roughly 18% of all Kentuckians over the age of 18. That share is slightly higher than the national percentage of borrowers. The total principal and interest balance on those loans is $20.5 billion, roughly $33,300 per borrower. Most borrowers owe less than $50,000. The median amount owed is around $18,000. Still, more than 125,000 Kentucky residents owe more than $50,000 in federal student loan debt.”

Kentucky Center for Economic Policy

On May 17, KyPolicy reaffirmed its stance, calling for student debt relief and a positive commitment to education.

“States like Kentucky then pulled back on funding universities and community colleges through public dollars, using the money instead for tax cuts to corporations and the wealthy and letting loan debt fill the gap,” author Jason Bailey wrote. “In Kentucky, the legislature has cut state funding for higher education by 1/3 just since 2008.”

Biden said more details from the Department of Education will be coming in weeks with how to apply for this new forgiveness plan.

How will the relief impact Kentuckians?

A study from LendingTree found that about 33.3% of Kentucky borrowers, about 186,873 people, would have their debt wiped away completely.

According to Education Data Initiative, about 93,712 students in Kentucky receive the Pell grant every year. The National Center for Education Statistics reported that in the 2019-2020 academic year 35.6% of students received the Pell grant.

A similar number of recipients were reported over from 2008 to 2020 meaning those students would likely qualify for the $20,000 in student loan relief.