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According to the Education Data Initiative, federal student loan debt in the United States averages $29 billion per state, with the District of Columbia having the highest individual average ($54,945) and the highest percentage of indebted residents at 17.2%.
Mississippi, although it falls toward the middle with an average of $36,902 per borrower, has the fourth-highest per capita rate of student borrowers, 14.8%, following Ohio, Georgia and D.C.
View the data:
The Biden administration opened applications for federal student loan forgiveness this week, with a cap of $10,000 to $20,000 per borrower, according to Higher Education Reporter Molly Minta.
READ MORE: Biden’s student loan forgiveness application officially opened on Monday. Here’s how to apply
Minta also reports that loan forgiveness, billed as an attempt at addressing the country’s racial wealth gap, could greatly benefit Black borrowers in Mississippi, who have higher undergraduate debt than other races and more loans taken out during 2017-18 than the average Black borrower across the U.S.
However, Minta also reported in September that a state tax provision could make Mississippians eligible for debt forgiveness responsible for up to $1,000 in state income taxes in 2023.
“Under guidance from the Internal Revenue Service,” Minta writes, “student loan servicers are not providing 1099-Cs – the tax form needed for filing debt cancellation – to borrowers or to state tax departments.
This means that many Mississippians will likely never receive the proper form to file student debt relief on their taxes. And while the Department of Revenue said it may send bills to those who try to skirt the additional tax, without 1099-Cs, it likely has no way of knowing if a Mississippian actually received student debt relief.
‘That’s the big question, right?’ said Angela Gonzales, a tax manager based in Gulfport who specializes in student loan taxation. ‘If you received student loan forgiveness, there’s gonna be no transactions through your bank history, no tax documents. So how far are they going to look into this?'”
READ MORE: Mississippi plans to tax student debt relief. But Paycheck Protection Program loans are tax exempt.
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by Nigel Dent, Mississippi Today
October 22, 2022
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Nigel Dent, a native of Natchez, is Mississippi Today’s audience journalist. He works as a member of the audience team to engage with readers, create audience-centered resources and distribute Mississippi Today’s news across various digital platforms, including social media and newsletter products.
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