Student loan relief in Michigan could cost taxpayers $11 billion

Some 566,000 Michigan residents were ready to benefit from President Joe Biden’s student loan forgiveness scheme when it was struck down in federal court, according to the White House.

The Biden administration’s statement of Jan. 27 lamented the fact that tens of millions of Americans could have had their student loan debt paid for by taxpayers, if not for lawsuits and court intervention.

• Related reading: Biden’s student loan forgiveness scheme fails in federal court

The fate of the plan is in the hands of the U.S. Supreme Court. The court will hear oral arguments Feb. 28 in two related cases, Biden v. Nebraska and Department of Education v. Brown.

If the high court were to uphold the program, each person who qualifies could receive up to $20,000 in debt cancellation. The benefit is limited to individuals earning less than $125,000 per year.

In Michigan, 864,000 people applied for debt cancellation and were deemed automatically eligible for relief. Of those, the applications of 566,000 individuals were fully approved and sent to loan servicers for discharge.

The average student loan debt in Michigan is $36,116, according to the Education Data Initiative. If all of the 566,000 Michigan applicants received the maximum $20,000 in loan forgiveness, it would cost American taxpayers $11.3 billion. This is equal to roughly 15% of Michigan’s 2023 budget, which is $76 billion.