Gov. Michelle Lujan Grisham and the New Mexico Higher Education Department applauded the Biden Administration’s decision on Wednesday to provide federal student debt relief to New Mexico borrowers and extend the pause on student loan payments through Dec. 31, 2022.
“New Mexico is home to the most expansive tuition-free college program in the country for students going to college today, but many New Mexicans in the workforce never had access to this benefit,” said Lujan Grisham. “The Biden Administration’s announcement will put millions of dollars back in the pockets of New Mexico families, retroactively extending affordable higher education to New Mexicans who went to school before today’s programs were available and building upon our state’s nationally leading efforts to make higher education accessible to all.”
“Today in New Mexico, students from all walks of life can pursue tuition-free college and career training up to a bachelor’s degree with the Opportunity and Lottery Scholarships, but many students who went to school years ago or continued their education are carrying burdensome debt, limiting their ability to provide for their families and contribute to our economy,” Higher Education Secretary Stephanie M. Rodriguez said.
The Biden administration announced that borrowers who received Pell Grants while in school will receive $20,000 in federal loan forgiveness and most other borrowers will receive $10,000. The forgiveness applies to individuals earning less than $125,000 annually or $250,000 for married couples and heads of household.
Pell Grants are awarded to undergraduate students whose families demonstrate limited ability to pay for college. Pell Grants pay between $650 and $6,495 for eligible students during the 2022-2023 school year. According to the National Center for Education Statistics, around one third of New Mexico students received Pell Grants last year.
The administration also announced an income-based loan repayment program for undergraduate borrowers that allows them to cap payments at 5 percent of their monthly income. The previous repayment program capped payments at 10 percent of a borrower’s monthly income.
The New Mexico Higher Education Department has provided millions of dollars of student debt relief under the Lujan Grisham administration for thousands of licensed teachers, nurses and other healthcare professionals through its loan repayment programs. The agency also administers loan for service programs that provide financial support for students pursuing undergraduate and professional degrees in the areas of healthcare, veterinary medicine or education and who commit to working in high-need communities in New Mexico for at least three years. These programs have seen a record number of applicants in the past few years and the Department is requesting funding increases for the coming year to meet current needs.
A total of 228,000 New Mexico borrowers hold $7.8 billion dollars in student loan debt with the average borrower owing just over $34,000. The average loan debt owed by New Mexico borrowers is about ten percent lower than the national average.
The U.S. Department of Education has provided more information about the program on its website and will share additional details about how borrowers can claim this relief in the coming weeks. The New Mexico Higher Education Department will also make this information available via its website and social media channels as it becomes available on hed.state.nm.us.