President Joe Biden's administration announced last week it is trying again to hand out billions in student loan cancellations, and most of the borrowers who will be affected are from the influential trio of California, Florida, and Texas.
The Biden administration released state-by-state data on student loan forgiveness on Tuesday, just days after the Department of Education notified 804,000 borrowers that their student loans would be automatically discharged over the coming weeks. The total amount sits at $39 billion.
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The Department of Education said an adjustment to calculating payments for income-driven repayment plans will mean borrowers who have made payments over the last 20-25 years will see their balances shrink. Now, the Education Department says payments will be counted for borrowers who made partial or late payments and deferred payments.
The changes to repayment come after the Supreme Court struck down Biden's plan to forgive up to $20,000 in student loans for all borrowers making less than $125,000. The administration had indicated it was searching for alternative measures to enact broader student loan relief, which will likely be a focal point of Biden's reelection campaign.
The $39 billion forgiveness plan has caused lawmakers and other officials to wonder whether it will face the same fate as the broad forgiveness plan. However, experts said because Congress already authorized loan forgiveness when it is connected to income-driven repayment plans in the 1990s, Biden's $39 billion relief plan is likely on sound footing.
Attorney Abby Shafroth, co-director of advocacy and director of the student loan borrower assistance program at the National Consumer Law Center, told CNBC the Biden administration is almost legally compelled to fix any situations in which forgiveness has not occurred due to administrative errors.
"This program is narrowly tailored to people who’ve been in repayment for decades already," Shafroth said.
Most student loan borrowers come from California and Texas, with both states counting more than 60,000 borrowers eligible for the forgiveness plan. Both states, as well as Florida and New York, have the most debt eligible for relief.
California
The Golden State has 61,890 borrowers who are eligible for student loan forgiveness. The state holds a blue trifecta, meaning both chambers of the legislature and the governor's office are held by Democrats.
Biden overwhelmingly won California in the 2020 election. By continuing to pitch student loan and debt forgiveness, the president is likely to solidify additional support for his 2024 reelection campaign.
Gov. Gavin Newsom (D-CA) has been supportive of student loan forgiveness. In March, he signed a series of budget bills that included an income tax exemption on forgiven federal student loans. Before this, California was one of seven states where residents could receive a tax bill for canceled student loans.
Under Biden's income-driven repayment plan adjustment, California residents have $2,958.80 million in eligible debt relief.
Florida
Florida has $3,036.80 million in eligible debt relief spread across 56,930 borrowers. The state, conversely to California, is a red trifecta.
Gov. Ron DeSantis (R-FL), who is running for president in 2024, is an outspoken critic of the Biden administration. He blasted the president's broader student loan forgiveness as "very unfair." Florida offers two state-specific student loan relief programs for nurses and lawyers.
The governor signed a letter, along with 21 other Republican governors, asking Biden to withdraw his student loan plan in September 2022.
While on the campaign trail, DeSantis said he would force universities to change their approach to preparing students for the workforce. Universities should have to pick up the tab for students who cannot pay their loans, the Florida governor proposed.
Texas
Gov. Greg Abbott (R-TX) and Texas's two senators came out against Biden's broader forgiveness plan as well. Under Biden's new $39 billion forgiveness plan, there are 63,730 Texans eligible for debt relief, worth a total of $3,091.80 million.
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Texas offers at least nine student loan forgiveness programs that are targeted toward specific professions, such as nurses, doctors, legal aid attorneys, teachers, and employees in the state attorney general's office.
Republicans in the Texas state legislature have introduced several bills in the current legislative session. Several of the proposals look to expand the existing policies and create new programs for math and science teachers, attorneys in rural areas, mental health professionals, and other workers.
To see the complete breakdown from the Department of Education, click here.