Student loan cancellation could impact thousands at Clarksville's Austin Peay State University

Thousands of Austin Peay State University students could soon find themselves closer to debt free status after President Joe Biden's decision to cancel a portion of student loan debt earlier this week.

The local students are among more than 271,000 Tennesseans that will likely have their student loans completely forgiven as part of the president's new plan.

Typically, Austin Peay graduates have around $21,500 in debt, according to US News & World Report. The report said about 68% of graduating students borrow money to pay for school.

The federal government will forgive $10,000 in student loan debt per borrower, plus another $10,000 in debt relief to Pell Grant recipients, Biden announced Wednesday.

"We're all just trying to figure out how this affects our students and our alumni," Austin Peay State University's Director of Communications Charles Booth said Thursday. "And we're looking at the federal website and looking at the federal student loan repayment website, and they've been moving kind of slowly because everybody's getting on, so we're still trying to figure out what all this means."

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There were at least 3,048 graduates at Austin Peay in 2016 alone, Booth said, and thousands more of the university's alumni could benefit from Biden's announcement.

More than 862,000 people carry federal student loan debt in Tennessee, and the average borrower owes about $36,418, just below the nation's average, according to data compiled by the Education Data Initiative.

The outstanding collective federal loan balance in Tennessee is about $31.4 billion.

About 32% of Tennessee borrowers owe less than $10,000, according to federal data. Another 20% owe $10,000 to $20,000 in student debt, and the rest owe more than $20,000.

Biden spelled out the basics of the plan in a speech from the White House Wednesday:

• Pell Grant recipients will have $20,000 in student loans forgiven.

• Non-Pell Grant recipients will have $10,000 in student loans forgiven.

• The debt cancellation is limited to borrowers with an individual income of less than $125,000 ($250,000 for married couples).

In Tennessee, the median household income was $54,833 in 2021.

Biden also extended the moratorium on federal student loan payments that was implemented during the coronavirus pandemic through Dec. 31.

The cumulative federal student loan debt is $1.6 trillion and rising for more than 45 million borrowers.

University of Tennessee at Knoxville Chancellor Donde Plowman told Knox News anything that benefits students is a step in the right direction.

"I need to learn more about which students that applies to, but one of the things we're proud of here is that our student debt is below the national average," Plowman said. "Anything to help our students we're happy about."

Abigail Bacci, a fifth-year supply chain management student at UT, took out a loan at the beginning of her first year, but has paid for school through scholarships since.

"As somebody that has a loan, I'll gladly take a little bit off. I'd be happy to not pay. But I think it's tough if ... you faced going to college only funded through loans, you took a different path ... and maybe you would have gone to school or pursued a different path if you knew this was ahead of you. For those people, I think I'm a little bit sad," she said.

Part of the push to provide student debt relief comes from the reality of the rising cost of higher education. Biden said the total cost of both four-year public and four-year private college has nearly tripled in 40 years but the federal Pell Grant program has not kept up.

“That ticket has become too expensive for too many Americans," Biden said. "The burden is so heavy that even if you graduate, you might not have the ticket that graduating college once offered."

To have any burden of that debt lifted could help borrowers feel like they can move forward in their lives, University of Tennessee at Knoxville Professor Robert Kelchen told Knox News back in June.

"The impact of student debt is that it's money students can't spend on something else," Kelchen said. "It can mean people may choose to delay buying a car or a house. They may delay things like getting married or having kids because those are also expensive."

Knoxville News Sentinel staff contributed to this report.

Reach reporter Craig Shoup by email at cshoup@gannett.com and on Twitter @Craig_Shoup. To support his work, sign up for a digital subscription to TheLeafChronicle.com.

This article originally appeared on Clarksville Leaf-Chronicle: Student loan forgiveness to benefit Clarksville's Austin Peay grads