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What you need to know about student loan forgiveness – The Journal of the Interior


Ailey Blystone has nearly $200,000 in student loans. The dental school graduate said she and her husband are grateful for President Joe Biden’s recent decision to forgive student loan debt.

“For us, it’s good,” Blystone said.

Biden announced that up to $10,000 in student loans would be forgiven for most borrowers and up to $20,000 for those who received Pell grants while in college. Pell grants are awarded to very low-income students.

Blystone’s husband, Weston Blystone, has less than $10,000 in debt and is therefore eligible to have his entire balance forgiven.

Husband and wife live in Elizabethtown. They recently returned to Kentucky after living for a time in California, where Blystone attended school.

Blystone said on the day of Biden’s announcement, she stayed on the line, waiting to hear what he would say.

“I kept refreshing it,” she said.

She said forgiveness is especially important for people like Weston’s father, who has been paying off his loans for more than 40 years and still has a balance.

According to the Kentucky Center for Economic Policy, 20,000 Kentuckians are past or near retirement age and owe federal student loans, with an average debt of $38,000.

According to the center’s report, there are likely more than 615,000 Kentuckians who are eligible to have some or all of their student loan debt forgiven.

The center says about 209,400 Kentuckians have less than $10,000 in student loans and therefore may be eligible for full amount forgiveness. The average amount of student debt for Kentuckians is $33,000.

Borrowers must qualify to receive the rebate. Singles must earn less than $125,000 and married couples must earn less than $250,000 together.

But some don’t party.

Elizabethtown’s Keith Decker said while he thought the student loan forgiveness was “a good thing”, he saw it as a downside.

“Who’s going to pay for this?” he said.

Decker didn’t go to college and therefore doesn’t have a student loan, but he said his great-niece went to college and paid off her loans herself.

“You better go to trade school,” Decker said.

Others nationwide have questioned the fairness of student loan forgiveness and the cost.

Like Decker, Donna Snider of Elizabethtown doesn’t have a student loan, but her grandson does. She said he was unable to graduate due to cost.

She said she sees forgiveness as a good thing and hopes it will allow her grandson to return to school.

William Campbell of Elizabethtown has paid off his student loans, but sees the pardon as a beneficial decision.

“I wish I had it,” he said. “People will be better off for it.”

Campbell graduated from college in 1985 and paid off her loans after serving in the military.

While the amounts pardoned by the Biden administration are a good first step, Blystone said she hopes more will be done, with the ultimate goal being that college in the United States is free, as it is. in many European countries.


Most borrowers will need to complete an application declaring their income to receive the rebate. The application should be available at the beginning of October. Borrowers can sign up to receive notifications about student loan cancellation, including when the application is ready, at

The US Department of Education said it could take about eight weeks after getting all the necessary information from a borrower until their debt is paid off.

The deadline to submit a pardon application will be December 31, 2023.


Although most canceled debt is considered income and taxed at the federal and state level, student loans canceled between 2021 and 2026 will not, thanks to a provision in the 2021 U.S. bailout. federal income tax student loan forgiveness.

Although some initial national reports indicated that Kentucky might tax canceled student loans, that is not the case, according to the Kentucky Department of Revenue.

Jill Midkiff, director of communications for the Kentucky Cabinet of Finance and Administration, said recent tax legislation exempts student loan forgiveness.

Part of House Bill 8, a controversial tax overhaul that passed earlier this year after the state legislature overruled Governor Andy Beshear’s veto, updates Kentucky’s tax code to track federal tax law at the end of 2021 for tax years beginning that year.

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Changes to the Department of Education’s income-based repayment plan were also included in the announcement. Borrowers earning less than 225% of the federal poverty level won’t have to make undergraduate student loan payments, and others won’t pay more than 5% of their income each month, up from 10%. Interest will not accrue, as long as those required to make payments do so monthly, and will not accrue for those who qualify for a $0 monthly payment.

Those with student loans who are unsure if they received a Pell grant can find out by logging into their student aid account at

Kelly McKinney, News Enterprise via Kentucky Today