CT’s $20K Student Loan Forbearance Program to Launch in 2025

Some student loan borrowers in Connecticut are eligible to receive up to $20,000 over four years in loan reimbursement under a new program launching on New Year’s Day.

Several state legislators gathered Wednesday at Southern Connecticut State University to applaud the upcoming launch of the Student Loan Repayment Program.

The SLRP requires the Office of Higher Education to reimburse eligible student loan repayments annually up to $5,000 per year for up to four years.

The program is designed to help all eligible applicants pay off their student loan debt. Dwayne Smith, interim president of SCSU, emphasized how this program will help Connecticut residents.

“As of September 2023, the total debt of borrowers is $1.6 trillion. Rising tuition costs, which have outpaced income growth, have placed increasing financial burdens on academics and their families,” he said. “As a proud first-generation college graduate, I deeply understand the resilience it takes to pursue a higher education while coping with significant financial challenges. These scientists carry not only their dreams, but also the hopes of their families and communities.”

To qualify for the program, applicants must: graduate from a public or private college or university in Connecticut with a bachelor’s or associate’s degree; have a professional license or certificate; or received a hardship waiver from OHE and left the college in good standing.

Conditions for a hardship waiver may include personal or family medical or financial circumstances that resulted in the student being unable to continue his or her education.

SLRP applicants must also have resided in Connecticut for at least five years, have an outstanding loan balance, have made payments on qualifying loans, and have 50 hours of volunteer work.

Application status also matters. Those filing federal taxes as single and unmarried must have a Connecticut adjusted gross income of $125,000 or less. Married applicants cannot have an income of more than $175,000.

Local lawmakers and the Biden administration have been trying to address rising student loan debt over the past few years.

Terrence Cheng, chancellor of Connecticut colleges and universities, spoke about his own struggles with student loan repayments and said he understands the struggles borrowers are going through.

“We understand that student loan debt is dragging you down. I personally remember these trials with my wife when we were still a young couple. And we tried to figure it all out. It’s a big load,” he said. “It harms your ability to buy a house, it harms your ability to buy a car, it harms your ability to think about starting a family.”

Plans to address the problem of student loan debt go beyond just reimbursement programs. “The board and I hope to freeze tuition at Connecticut universities for the next two years,” Cheng said.

While student loan debt has plagued the country, Connecticut has the fifth-highest student loan debt in the country, Cheng said.

According to the Education Data Initiative’s Student Loan Debt by State report, there are approximately 507,200 student borrowers in Connecticut, and they each have an average of $36,672 in student loan debt.

Lieutenant Governor Susan Bysiewicz expressed support for the program and said Gov. Ned Lamont is also proud to invest in the SLRP.

“In our state of just over 3 million people, 500,000 people have a significant amount of student debt, that’s one in six. And my husband and I, when we graduated from high school, (our debt) was twice as big as our mortgage payment, so we’re absolutely getting it,” Bysiewicz said.

Aidon McCray, a sophomore business management major at SCSU, said the program will help his uncertain future.

“Like many students, I am navigating the reality of student loans. The truth is, I don’t even know how much I’ll owe when I graduate. And that uncertainty is something I unfortunately share with countless other students,” McCray said.

McCray mentioned that many of his closest friends have to begin their higher education at local colleges because they cannot afford to attend CSCU or other public universities. As an entrepreneur, McCray restores custom shoes, but wonders how he will invest in his business if he is constantly weighed down by student loans.

“I have many dreams and aspirations. But these debts—which I haven’t even paid off yet—are already putting me in a bind, limiting what I think I can do because of the reality of this financial burden that awaits me,” he said.

Sydney Nelloms, assistant professor of sociology at SCSU, worries about the future of students like McCray and those she teaches.

“The SKSU faculty and I have the honor of working with bright and motivated students who represent the future of our society. But too often, I see the same students unfairly saddled with a crushing burden of student debt that will shadow them for decades after graduation,” Nelloms said.

“Student loans have become predatory for young people, these loans are marketed as an investment in their future, but the reality is often much more complex,” she said. “The likelihood of debt repayment for students without STEM degrees or other degrees that provide a higher return on their investment is unfortunately generally low. Those of us with social science, humanities and similar degrees struggle with this a lot.”

According to Rep. Eleni Kavros DeGraw, D-Avon, who chairs the Planning and Development Committee, passage of the SLRP was achieved through a bipartisan effort.

“When we first introduced this idea, people didn’t fully understand it. They kept saying, “Well, we’re already retaining our students. We don’t need another retention bill.” And I said this is not a retention bill, this is an economic participation bill,” she said.

“Because we crafted this bill in a bipartisan manner, we weren’t just a Democratic Party think tank trying to figure out how we were going to put it together,” she said. “We had many, many supportive Republican colleagues and co-sponsors of this bill, and that was important because at the state level, you can work together and sometimes it can be better than what we see every day in Washington.”

As for the program’s success, OHE and legislators are optimistic.

“They’re projecting about 100,000 people will apply,” said Rep. Corey Paris, a Stamford Democrat. “They have been inundated with calls and emails since we announced it. A lot of people have already done their community service beforehand.”

The SLRP will be available through the OHE CT Fellows Database. A link to the site will be available on the OHE website with instructions on how to apply.

This story first appeared in the Connecticut Mirror on November 20, 2024.